If you are looking for an Omaha bankruptcy attorney, call the attorneys at McGuire & Hepperlen to set up a free consultation. We have offices conveniently located in Omaha and Lincoln, and we have flexible hours that work around your schedule. Our Omaha bankruptcy attorneys can even schedule a free consultation with you on Saturdays, as well as evenings.
A free consultation will normally take about 30-45 minutes, and will consist of a review of your financial situation and whether Chapter 7 bankruptcy or Chapter 13 bankruptcy is right for you.
We will provide quality legal advice in a non-judgmental atmosphere. To schedule an appointment with our Omaha and Lincoln bankruptcy attorneys, call McGuire & Hepperlen today at (402) 965-0775.
When a bankruptcy is filed, a debtor must list all of the assets that they own on the date their case is filed. These assets include: cash, bank accounts, retirement accounts and 401(k)s, household goods and furniture, jewelry, clothes, guns, vehicles, potential inheritances, claims against third parties, and many other categories. Whether or not a person can keep their property in bankruptcy depends on the value of the asset and whether it can be exempted by a state exemption law. Many of the assets listed above may have specific exemptions that cover all or part of their value. Some assets may not fall under a particular exemption and would be considered “non-exempt.”
If a person files a Chapter 7 bankruptcy, their property must be exempt under bankruptcy exemptions in order to keep it. Otherwise, property that is not exempt or only partially exempt can be claimed by the Chapter 7 Trustee and sold-off, with the resulting proceeds going to the Debtor’s creditors.
A debtor can file a Chapter 13 bankruptcy to keep their property, even if it would be considered non-exempt. However, the value of the non-exempt assets will have to be paid over to the creditors through the Chapter 13 repayment plan. Therefore, the more non-exempt assets a Chapter 13 debtor has, the more they have to pay back to their unsecured creditors through their repayment plan.
Now that we are in the midst of tax season, it is important to consider the timing of when to file bankruptcy. If you file your 2011 taxes and receive the refunds prior to filing a bankruptcy, you may keep your refunds (provided that the amount in your bank account on the date of filing is within the exemption limits). If, however, you file your bankruptcy before you have received the tax refunds, then you are limited to keeping the amount of the refund that is within the bankruptcy exemption limits. For example, in Nebraska a single individual is entitled to a $2,500 exemption that can be used to cover the value of bank account balances, miscellaneous property or tax refunds. A married couple is entitled to a $5,000 exemption.
Here is an example:
Let’s say a single individual files bankruptcy, and on the date of the bankruptcy filing that person is entitled to get a $3,000 tax refund, but has not received it yet. That person could exempt $2,500 of that refund under their exemption, but would have to turn over $500 to the Trustee. The alternative is for the individual to wait to file the bankruptcy until after they have received the tax refunds and have less than $2,500 of it left in their bank account.
Whatever you do, make sure you don’t pay family members more than $500 of the refund, because any payments to family members of over $500 within a year of filing bankruptcy would be considered a preference payment. Additionally, you would not want to pay ordinary creditors more than $500 within 90 days of filing bankruptcy, since this too would be a preference payment.
Filing a bankruptcy will affect your credit. However, for most people contemplating bankruptcy, their credit score has already suffered due to the circumstances that have caused them to consider bankruptcy in the first place. Generally a bankruptcy will show-up on a credit report for 7-10 years after it has been discharged. Debts that have been discharged through bankruptcy would show as “Discharged in Chapter 7 or Chapter 13 bankruptcy.” One benefit of filing a bankruptcy is that it will provide a clean slate to clear off the negative treatment that comes with high balances, late payments, and accounts in collections. Depending on your circumstances, your credit score can improve within a year or two of getting a discharge. If a debt is “reaffirmed” in a bankruptcy (e.g., a car loan that is kept) and you continue to pay on that debt after a bankruptcy, the creditor must continue to report your payments after bankruptcy in order for the report to be accurate. By keeping a secured debt such as car or house, this will be one way to improve your credit score more quickly. You can also get an unsecured credit card with a small credit limit or a secured credit card. If you make small purchases and pay them off on time and in full each month, you will have positive treatment on your credit report that will help you to rebuild your score. It is possible to obtain a loan for things like vehicles after bankruptcy; however, the terms you will get will depend on your credit score.
One issue that can sometimes arise following a bankruptcy is that some debts on a credit report may be inaccurately listed and will not be reflected as “discharged in bankruptcy.” This happens when a credit report is not updated after the bankruptcy discharge. Even though the debt has been discharged in the bankruptcy and there is no legal obligation to pay it, the credit report may not reflect the fact that it was discharged. At McGuire & Hepperlen LLP, we send a letter to our clients at the time of their discharge recommending that they review their credit report for inaccuracies and we provide the address of all three credit bureaus so that our clients can write a letter to the credit bureaus asking for their credit report to be updated.
Under the Fair Credit Reporting Act, inaccurate credit reports can be corrected. The Fair Credit Reporting Act allows a person to challenge the accuracy of credit reports and furnish proof to be considered in making corrections. You have the right to one free credit report each year, and you can apply for that free credit report from each of the three major credit bureaus: Equifax, Experian, and TransUnion.
To dispute inaccurate credit information, you must contact the credit reporting agency with information showing the inaccuracy and they have 30 days to investigate. You should also contact the information provider (creditor).
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