Debunking 7 Notorious Bankruptcy Myths

Published on: 23 July 2018 Last Updated on: 08 August 2019

Bankruptcy is a serious step in anyone’s life and can have serious consequences. However, in many cases, bankruptcy is the only way out for some and can bring about the much-needed change as it helps them get rid of old debts. Understanding how bankruptcy affects you is key when deciding whether to file for bankruptcy with the help of experienced attorneys such as the BK Lawyers.

People often turn to familiar people who have been through the same thing or try to find answers regarding bankruptcy on the internet. And while in some cases this might provide the answers they seek, in others, it may bring a lot of misinformation.

There’s no reason to turn to unreliable sources for advice when in most cases bankruptcy attorneys don’t charge the initial consultation during which they can provide answers to all the questions you may have about the process. Therefore, we recommend consulting an experienced attorney before consulting the internet.

To help you better understand bankruptcy, we are going to debunk some of the most common myths.

You Can’t Travel Overseas after Filing :

Many people believe filing for bankruptcy prevents you from traveling overseas. However, the truth is that a trustee will let you travel overseas as long as you make the required payments and provide the required information. You’ll also need to provide financial information regarding the trip, for example, who’s financing it, where you’re traveling, etc.

Filing for Bankruptcy Costs a Lot :

As we mentioned, the initial bankruptcy consultation is usually free. Reliable sources you can consult about bankruptcy include trustees, insolvency experts, and AFSA.

You’ll Love Everything :

One of the most common myths is that filing for bankruptcy means you’ll lose all your assets in order to pay off your debt. Depending on the debt, you may be allowed to keep a lot of assets including your household items, furniture, and appliances. You may keep a significant portion of your balance to cover the costs of living.

In some cases, you may be allowed to keep your vehicles to a certain value, as well as tools of the trade. However, most people worry about losing their home. And even if your home has to be sold to cover your debts, you may arrange to purchase it from the bankruptcy trustee.

Your Earning Will be Limited :

There are no limits to your earning when you file for bankruptcy. However, if you earn more than a certain level you’ll need to make some contributions every year during the period of bankruptcy.

The Debts you leave off the Bankruptcy Form are Not Included :

When filing for bankruptcy you need to submit a form listing all your assets and debts. This form is called a Statement of Affairs form. Leaving information out of this form is considered an offense for which you may be criminally prosecuted.

While you need to fill out the form as precisely as possible, leaving out a debt unintentionally will not affect whether that debt will be included in the bankruptcy.

You Have to File for Bankruptcy if You Can’t Pay Your Debts :

There are other ways to cover your debts, but in most cases, bankruptcy is the most effective one. Bankruptcy has a minimal impact on your finances if you’re not able to cover your debts through selling assets and earnings. IF you have a higher income or have reasons to avoid bankruptcy (if you’re a CEO) you can refinance your home, arrange a debt agreement or make informal arrangements to cover the debt.

You’ll Never Get a Loan Again :

While your bankruptcy is recorded in the credit report seven years after filing and it’s recorded in the NPII, there are still ways to help people with bankruptcy get back on their feet. Credit providers are willing to assist individuals who filed for bankruptcy to get a loan despite that.

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Bankruptcy Means Test: Why It Matters?

Bankruptcy means a test is done to determine who can file for chapter 7 bankruptcy. The means test considers everything while determining your current position to pay your debt to the creditors. It goes through your income, expenditure, assets, and family members. The means test was designed to reduce the number of debtors willing to get their debts erased. It has been seen that most of the debtors who have applied for the means test have passed. Those people who cannot qualify for chapter 7 or want to keep their assets to themselves can apply for chapter 13 bankruptcy. How Chapter 7 Bankruptcy Works? Applying for chapter 7 can be an expensive and lengthy process. The means test helps the government clarify who is eligible for chapter 7. The Means Test has two parts. Both parts are designed to see through your income and assets and determine the current financial standing. You have to apply for the Means Test only for the primary consumer debts like medical debt or credit card debts. You do not have to apply for this test if your debt is related to business loans. First Part The part of the Means Test determines whether your house income is below the state's median income. The means test starts gathering information about your income, expenses, and assets. These data are mostly collected from the past six months. However, there have been cases where this six months time duration can be changed. After all the reports, if it is being found out that your income is below the median income, you will qualify the Means Test. In a report made by the US government in 2013, more than 12% of the debtors were able to qualify the Means test in the first stage. Second Part The second part consists of going through all your expenses. These expenses consist of everything you pay for, starting from paying your utility bills, grocery bills to the travel expenses and education expenses. Out of all the expenses, only the allowable expenses are considered to be used by you. Other expenses that are not necessary are used to pay off your debts. While you document the list of expenses, be thorough about the things you add to the list. Remember, those expenses will decide whether your petition will be accepted or not. Allowable expenses are based on the local and national standards used by the IRS. The national list covers items like food and clothing, and local items cover housing expenses and car payments. You need to work carefully to ensure that all your expenses are thoroughly documented. What's Next After You Qualify for the Means Test? Passing the means test means you have the green light to apply a petition for chapter 7 bankruptcy. Once your petition is accepted, most of the unsecured debts will be forgiven. That does not mean that this will be the best route for you. There are also chapter 13 bankruptcy that might give more advantage over chapter 7 in many cases. Chapter 13 will help you put a hold on all your debts, mortgages, overdue loans, and bank taxes. What Will Happen After You Fail The Test? Once you fail the Means Test, there are no more appeals for a certain period. You can apply for the chapter, or you can wait for the cooldown time to apply again for the means test. We have already mentioned that the Means Test goes through all your financial income and expenditure in the last six months. That means, after a failed attempt at the Means Test, you can apply again after six months. However, if you do not intend to apply for the Means Test again in the future, you will be restricted to chapter 13 and will have to pay off your debt based on the chapter 13 provision. The Bottom Line Is it really hard to apply for a loan after bankruptcy? Well, you can say more than hard; it is more complex. You first need to qualify the Means Test, and then only you can apply for chapter 7. It is better to have an attorney while you are managing legal documentation. Read Also: 8 Simple Tips To Pay Off Your Loans Faster 5 Must-Have Long-Term Goals for A Secure Future What are the types of debt that can be discharged in bankruptcy? Using Short-Term Loans to Help Rebuild Your Credit Score

Most Common Merchant Account Issues Explained

Whether you are just considering the prospect of setting up an online store or looking for ways to enhance your efficiency as an existing business on the web, knowing what problems you are likely to come across as a merchant account owner will help your decision-making on the way. This article will be useful for anyone daunted by the possibility of creating and running a high-risk merchant account. Here, we explore four frequently occurring problems with bank accounts for credit card payment and how to avoid and/or fix them. What Is Considered High-Risk? The degree of risk associated with your merchant account is largely determined by what kind of goods and services you offer. This is part of a common classification used by banks and other financial institutions to work out the most fitting approach for their corporate customers. Traditionally, businesses in agriculture and gardening, education, drop shipping, SMM, babysitting, and other similar areas are labeled relatively safe and enjoy favorable treatment by banks. However, this doesn’t mean they won’t suffer from fraudulent transactions, chargebacks, and more documentation that they can manage when they go online. Contrary to these activities, the following areas are believed to be high-risk: betting forex brokerage booking online dating adult goods and services food sales pharmaceutical sales. If your prospective or existing business belongs to one of the categories on the above list, it means you have a greater than average chance of facing fraudulent activity and other risks that are typical of online payments. Fortunately, though, there are solutions to relieve the hazards for both you and your customers. High Fees and Restrictions on the Part of the Bank As mentioned above, financial institutions seem reluctant to partner with companies in high-risk sectors such as forex brokers. This is not to say that such a partnership is impossible. Instead, you are more likely than not to be charged high fees for the cooperation, which might drain your revenue and are often combined with further restrictive practices. For instance, banks often limit the total transaction amount per unit of time, causing many startup owners to either switch to costlier plans or start multiple accounts. Credit Card Fraud One of the merchant’s biggest fears, fraudsters have many opportunities to rob your business of its honest earnings. Payment card fraud comes in numerous forms, with new practices being developed every moment. This applies to low- and high-risk businesses, although the latter might need more serious measures to protect themselves and their clients from online scams. Common solutions include layered user authentication and payment verification systems as well as dynamic restrictions to exclude certain countries, banks, or partner companies from potential transactions. Overwhelming Documentation Financial institutions will most probably ask you for extensive reports to prove your credibility as a partner. This is especially true if your business has been classified as high-risk. In this case, it is vital to keep a clear and complete record of your activities under the specific requirements of the banks and/or payment providers that you are willing to work with. Too Many Chargebacks Frequent requests for chargebacks, or refunds, can damage your reputation as a business, undermining customer trust and the banks’ willingness to cooperate. The disputes that often arise in such cases tend to be costly to process, too. One way to minimize chargebacks is to provide accurate and clear descriptions of your goods and services, always meet your delivery deadlines, and ensure your overall customer service is decent. However, it is also advisable to incorporate automatic chargeback prevention tools that will identify high-risk transactions and deal with the problem before a dispute is initiated. An All-Round Solution to Manage All the Risks at Once While navigating the difficult landscape can be confusing, especially with little experience in the field, business owners do have a choice. Intelligent payment gateways such as Maxpay offer automation as well as flexibility. Consider investing in an online payment product that will enhance your payment security and prevent overwhelming chargeback numbers without taking too much time to set up and manage. What you are likely to get is a smooth, trouble-free merchant account. Read Also: How New POS Technology is Advancing Merchant Processing How To Know If Your Health Insurance Covers Visits To The Chiropractor

A Lender’s Guide to Improving the Borrower Experience: 6 Tips & Tricks

Virtually everyone will need a loan at some point in their life, whether it’s finding a home, a car, a business, or a passion project. The ubiquity of loans in today’s market means that lending is as stable as it is competitive. So as a lender, you’ll always be looking for that extra advantage over your competition and focusing on improving borrower experiences. Borrowing is often a complicated and stressful experience for consumers. If you can make your lending process as painless as possible, you’ll be able to draw higher caliber clients. As the adage goes, you catch more flies with honey than vinegar, and your loan business could be the next honeypot. Here are six tips and tricks for enhancing your borrowers’ experience and closing more deals. 6 Tips To Improve The Borrower’s Experiences Borrower experiences and the good impression of your services are bringing more consumers to your business. Consumer connections are like a chain system: one single consumer’s good feedback brings back at least two more clients for your business. Here are the six easy tips to improve your borrower’s experiences. 1. Enlist A Mobile Notary A mobile notary makes the loan signing process a cakewalk. Mobile notary services find the closest mobile notary near you and send them to your office. By using this service, you and your client can avoid those frantic lunch-hour runs to the notary public’s office. These notaries carry a two-fold benefit: they cut back on your borrower’s stress and make your agreements more legally secure. These clearances on the legal issues are directly improving borrower impression for your business. 2. Build A Close Working Relationship With Clients Work at building a good relationship with your clients. Ask about your clients’ lives and make sure you go the extra mile in understanding their needs. Doing that will help them feel more comfortable about taking a loan from your institution. Most financial institutions come equipped with a dull and business-like atmosphere. You leave a better impression if your customers feel like they’re people rather than numbers. Your borrower and clients will come back to do more business with you, and they’ll also be comfortable enough to refer their friends and family. 3. Have An Uncomplicated Application Process Cumbersome is often the name of the game when it comes to loan approval and collections processes. However, you can change the narrative by creating a less complicated procedure for your borrower. Create a list of necessary documents and other necessary steps for the approval of loans. Then create a straightforward system that your clients can follow. If customers can survive a meeting with you without needing their financial dictionary, it’s sure to leave an excellent impression. 4. Use Online Loan Applications One way to improve the borrower experience is to use online platforms. Having to queue in an office and filling forms is a turn-off for most people. Your clients should not have to come to a physical office before they gain access to top-notch service. Create a website or application that allows online loan applications. Your online platform should allow virtual payments and account access. 5. Have A Precise Payment Plan As a financial institution, you have to dot your Is and cross your Ts. It would help if you made the loan application and collection process as straightforward as possible. Your clients should also understand the payment plan, whether weekly, bi-weekly, monthly, or yearly payments. Communicating clearly and effectively will create a lasting relationship between yourself and your borrowers. 6. Have An Open Communication System Clients experience a lot of uncertainties when they want to take out a loan. Consumers want to know the organization's policies, interest rates, and other specific information. Always be transparent with every lead so that clients know what to expect and never feel cheated. Be available to answer questions, give advice, and provide any explanation they may need to improve the experiences of your borrower. Parting Shot The growth and longevity of every business depend on its clients. A gold-standard borrower experience is a water you use on your blooming client relationships. More you focus on building up the relationship with your clients. You can make positively massive growth in your business. Read Also: Insurance Business: What Startups Need To Know 6 Things You Should Know Before Starting A Business 7 Important Advice for Start-Ups and Entrepreneurs

Debunking 7 Notorious Bankruptcy Myths

You Can’t Travel Overseas after Filing :

Filing for Bankruptcy Costs a Lot :

You’ll Love Everything :

Your Earning Will be Limited :

The Debts you leave off the Bankruptcy Form are Not Included :

You Have to File for Bankruptcy if You Can’t Pay Your Debts :

You’ll Never Get a Loan Again :

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Related

Bankruptcy Means Test: Why It Matters?

Most Common Merchant Account Issues Explained

A Lender’s Guide to Improving the Borrower Experience: 6 Tips & Tricks

Debunking 7 Notorious Bankruptcy Myths

You Can’t Travel Overseas after Filing :

Filing for Bankruptcy Costs a Lot :

You’ll Love Everything :

Your Earning Will be Limited :

The Debts you leave off the Bankruptcy Form are Not Included :

You Have to File for Bankruptcy if You Can’t Pay Your Debts :

You’ll Never Get a Loan Again :

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5 Ways to Become a Profitable Landlord

Hiring a Blockchain Developer

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

Leave a Reply

Popular

Follow Us

Recent

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