The short answer is no.  This is because while you are in bankruptcy you should not be incurring new debt without court permission.  Most of the time a credit card will not issue a card to someone who is in an active bankruptcy case, because they do not want to violate the bankruptcy code and face sanctions from the bankruptcy court.  Furthermore any cards that a debtor has prior to filing the case will be discharged in the bankruptcy case, except under rare exceptions.  Therefore the debtor will not be able to continue to use their cards.

The entire point of a bankruptcy case is to get a fresh start and to get rid of the debt and allowing a debtor to continue to incur debt while in the bankruptcy case complicates and frustrates this goal.  When preparing to file a bankruptcy case a debtor must take a look at their finances and make sure that they are living within their means and question why they would have a need to continue to spend on credit.

If you have any questions about bankruptcy, contact the attorneys at Fears Nachawati today. Call 1.866.705.7584 or send an email to fears@fnlawfirm.com for a free consultation.

Increasingly, national retailers are adopting a new way to pay employees: payroll cards. In the last several years, some national employers like Walgreen’s, McDonald’s and Wal-Mart have begun paying employees with payroll cards instead of cash or check.

 

Similar to debit cards, payroll cards have many of the benefits of other A.T.M.-compatible cards. Like debit cards, payroll cards may be used to purchase items online. Employees can check their account balance with a few clicks of a mouse or touches on a screen. And by holding digital currency rather than a check, unbanked employees avoid the fees of a check cashing service.

 

Of course, as with debit cards, payroll cards have detriments, too. If a cardholder uses an out-of-network A.T.M., they may face a different set of fees. Also, payroll cards can be inconvenient for people who need ready cash for a variety of purposes; it can be difficult to know how much to withdraw at the A.T.M.

 

But what is most important at the moment is not just the virtues and drawbacks of payroll cards. It’s whether these employers received the consent of their employees before dramatically altering the way they compensated their workers. That’s the question that some state attorneys general want to answer. It’s a question you may want to answer, too.

 

If you’re facing financial distress in part because of the difficulties of managing your payroll card, you may consider discussing that with an attorney from the dedicated firm of Fears Nachawati. With years of experiencing handling consumer claims and consumer bankruptcies, we’re prepared to help you consider whether you have valuable claims with respect to your payroll card. Let us advise you. Contact us today for your free consultation.

The widely used credit card, Capitol One, has made the phrase, “What’s in Your Wallet?” one of the most famous marketing taglines in American business history. For an up-and-coming consumer financial services firm, Capitol One’s question gently asked consumers to reexamine their financial life and focus on the issue of whether they were getting the deal they deserved from their credit card company.

 

For individuals and families preparing for bankruptcy, this question is important, too. In the months after bankruptcy, your access to credit will likely be limited. High-interest, low-balance credit cards may be your only place to find financing. Prudent people may tell you that a credit card is the last thing you need. In fact, for many families, high-interest debt is precisely why they’re in the fix that they’re in.

 

Ironic as it might seem, a credit card may be just what the financial doctor ordered. In the immediate aftermath of your bankruptcy, your credit score will tell one story to a lending institution: “Don’t trust this person with a loan!” By signing up for a credit card and making timely, full payments, you’ll start to change that story. Creditors will see your regular payments and responsible use of credit.

 

Will you pay for this strategy with higher interest rates? You bet. And if you can’t control your spending, this strategy can be extremely dangerous. On the other hand, if you really have turned a corner in your personal, business, and financial life, this approach may ensure that you get the credit you need to rebuild your credit score.

 

Ready to talk about other strategies to improve your financial life after bankruptcy? Talk to the professionals at the law firm of Fears Nachawati today. With years of experience, we know how to give you the advice you need.

Filing for personal bankruptcy doesn’t take place in a vacuum. Phone calls and home visits from debt collectors, piles of unpaid credit card bills, and painful, personal rejections from bank lenders often precede a debtor’s decision to file bankruptcy.

 

When the stress is this high and the issues are this complicated, it’s helpful to have an attorney who has experience with the questions and answers, laws and facts, and hopes and fears associated with your personal bankruptcy. Specifically, some of the common issues that an experienced professional at Fears Nachawati can help you address are what deadlines you may face, what state and federal laws apply to your case, whether your home can be saved from foreclosure, and what will happen to your personal assets.

 

Our experienced professionals can advise you as to whether Chapter 13 is available to you and your family, whether Chapter 7 or Chapter 13 best addresses your concerns, and how you can move from financial insolvency to financial stability. The choices are yours and the options are many. Fortunately, we’re prepared to explain what’s possible. 

Why do consumer debtors file Chapter 7 or Chapter 13 bankruptcy protection? If you think the answer is financial irresponsibility, compulsive spending, or even insolvency, you’d be wrong in more cases than not. The biggest driver of personal bankruptcy is the unexpected: unplanned job loss, unanticipated illness, and rapidly deteriorating relationships when end in divorce.

 

Unemployment isn’t like it used to be. Since the financial crisis of 2008, more Americans have experienced periods of unemployment than at any time in the nation’s history. In 2012, the Bureau of Labor Statistics announced that 5.2 million Americans had been unemployed for longer than six months. Moreover, finding jobs for which you’re qualified is tougher than normal. In fact, things have been so different from what used to be “normal” for so long that a new term has developed: the new normal.

 

Even if you have a job now, prolonged unemployment can have a lasting legacy. Accumulated debts, particularly on high-interest financial vehicles such as credit cards or payday loans, may grow even as you make the payments you can. Like standing in quicksand, you may feel like you’re sinking further and further into debt. If this sounds like you, it may be time to throw up your hands, exercise your rights, and declare bankruptcy.

 

Likewise, medical bills can be similarly crushing. Over the last several years, real wages have remained relatively stagnant while medical costs have risen steadily. In 2010, for instance, Americans spent $2.6 trillion on health care, up from a mere $256 billion just thirty years prior. Costs have gotten so high that the Center for Disease Control has estimated that in 2011 20 percent of American families missed payments on their health care debts. If this starts to happen, bankruptcy may be the necessary evil you need.

 

When is the right time to take the plunge and declare personal bankruptcy? It’s hard to know. Fortunately, the attorneys at Fears Nachawati can help you answer this important question. Moreover, if you conclude that it’s time to get started making your way through bankruptcy and toward a new financial life, we can help you get started immediately. Your free consultation is just a phone call or email away. Contact us today.

For American consumers, there’s some good news with respect to their debt levels. In the second quarter of 2012, Americans continued to reduce their credit card debt, down to just $672 billion or 22 percent from 2008 highs. Credit card debt is one of the most dangerous forms of lending for debtors because of its high interest rates, floating rates, and hidden charges and penalties.

 

The lending picture isn’t uniformly rosy, however. Across the country, car loans have increased significantly, and in Dallas, key housing indicators suggest a softening housing market. Nationally, debt related to automobile purchases increased by $13 billion in the last quarter, up to $750 billion, as consumers fulfilled postponed needs. While automobile purchases suggest consumer confidence and represent more of an investment than pure consumption, greater personal debt during a soft recovery can be dangerous.

 

Likewise, in Dallas, housing – the largest single source of consumer debt per capita – has fallen off of late. For instance, the last month has shown a decline in average listing price and number of listings. Additionally, one-bedroom residences, precisely the homes that struggling debtors are most likely to own, have fallen 16.5% in average value during the last year. As home values decline, struggling debtors lose their last major store of value and may be forced to confront a dire financial picture.

 

In general, debtors don’t fall into financial distress over night. Likewise, it’s wrong for consumers to think that they’ll solve their financial problems quickly either. What you need whether you’re considering bankruptcy or trying to avoid it is a plan. The dedicated and experienced attorneys at the law firm of Fears Nachawati know how to advise clients like you and can offer you the advice and recommendations you need. Call us for your free consultation today.

A credit card balance is like snow at the top of a mountain. A good amount of snow is pretty and fun to ski. Likewise, a credit card balance often means that you purchased items that you could not presently afford – often “fun” expenses. However, too much snow can cause an avalanche. Too much credit is equally as dangerous as just one missed payment can damage your credit. Wait too long to pay and the credit card company can close your account, declare the debt defaulted, and raise your interest rate (often to 28% or more!). If you are still unable to pay your credit card debt, you can look forward to harassing telephone calls, third party collectors, and finally a lawsuit.

When you receive a summons to appear in court you have four options: (1) do nothing; (2) defend the law suit; (3) negotiate a settlement; or (4) file a bankruptcy. Doing nothing is obviously a bad choice. When you fail to appear in court the judge will enter a judgment against you for the full amount of the debt, plus interest, plus fees. Your wages are then subject to garnishment and the money in your bank account may be seized. A judgment is a public record that will remain on your credit report for at least seven (7) years.

Hiring an attorney to defend a credit card lawsuit is usually not cost-effective because it may cost several thousand dollars in legal fees to contest a debt of just a few thousand dollars. Additionally, if you actually owe the money, there is a good chance you will lose the lawsuit.

Even if you are represented by an attorney, it is very difficult to negotiate a settlement once a lawsuit is filed. That is because the work for the creditor is already done and money is already spent to obtain a judgment. A judgment is a legal hammer that will force you to pay your debt. Why would the creditor stop the lawsuit for less than full payment?

The final option, bankruptcy, is a legal shield. Bankruptcy immediately stops the lawsuit and prevents the entry of a judgment. Once the individual’s obligation to pay the debt is discharged by the bankruptcy court, the lawsuit must be dismissed and cannot be refilled. Filing bankruptcy prevents almost all future lawsuits from being filed and can discharge the obligation to pay most court judgments.

If you have been sued by a credit card company, discuss your situation with an experienced bankruptcy attorney. There are many options for dealing with your financial difficulty, and a bankruptcy attorney can help you select the best course of action for you and your family.
 

In marriage, “two become one.” It is a beautiful sentiment that also has legal implications. Married couples often enjoy better legal protections than unmarried people. However, when a couple obtains unsecured credit together, like in the case of joint credit cards, the legal status of the marriage does not offer any unique protections.

A joint credit card is generally a bad idea. If there is a default on a joint credit card, the credit card company can pursue either individual or joint assets. The company can sue both husband and wife, and can collect from property owed by the husband and/or wife. On the other hand, if the credit card is just in the husband’s name, the bank cannot get at property that is not in his name – and vice-versa for the wife.

During a divorce the family law court will divide marital debts and order the individual parties to pay an assigned share of the debts. For instance, a family court may order husband to pay a joint credit card debt. If the husband fails to pay the joint credit card debt, the family court can hold him in contempt of court, which can include money sanctions or even jail until he complies with the order. In many cases the court can order the defaulting party to pay a kind of restitution to the other party (often called a “hold harmless” clause in the divorce action).

While the family court has the power to direct the divorcing couple to pay an unsecured credit card, it does not have the power to alter the original credit agreement with the credit card company. The family court order does not apply to the credit card company because the card company was not party to the divorce proceedings. This joint contract is still fully enforceable, and if the debt is not paid as agreed, the card company can collect 100% of the debt from either or both parties.

Default on a joint credit card debt after divorce may lead to bankruptcy. Discharge of a marital debt is tricky and requires the assistance of an experienced bankruptcy attorney. In basic terms, one party can discharge a joint credit card debt if the debt is not “in the nature of support.” Credit card debts are not generally viewed as support obligations, so the next inquiry is whether there is a hold harmless clause in the divorce decree. If so, the credit card debt could be determined non-dischargeable during a Chapter 7 bankruptcy case, but can be discharged in a Chapter 13 case.

Discharging joint credit card debt after a divorce can get complicated and can lead to litigation with your ex-spouse during your bankruptcy case. The best advice is to have the matter fully examined by an experienced bankruptcy attorney before filing. Your attorney can assess your situation and give you a legal opinion as the dischargeability of the debt.
 

A Chapter 7 bankruptcy case can discharge many financial obligations, including credit card debts. A Chapter 7 discharge means that the credit card company is permanently prohibited from trying to collect from you. The debt is unenforceable against you, and you are not required to pay income taxes on the discharged debt.

Credit cards are classified as "unsecured debts," the lowest category of debts during bankruptcy. Other common unsecured debts are medical bills and signature loans. The payment of an unsecured debt is not guaranteed by a pledge of property (e.g. a car loan). Consequently, when an unsecured debt is discharged in a Chapter 7 bankruptcy, the creditor typically receives nothing.

Discharging a credit card debt in a Chapter 7 bankruptcy case comes down to one simple rule: was the debt incurred honestly? The Chapter 7 bankruptcy laws favor discharging credit card debt and giving the honest debtor a fresh start. However, the law balances the scale by withholding the discharge when the debtor is less than honest.

First, a credit card that is not listed in your Chapter 7 bankruptcy case is often excluded from your discharge. This is especially true if you continue to use the card during or after filing bankruptcy. The additional charges made after filing bankruptcy cannot be discharged, and becomes good evidence of an intent to conceal the credit card from the court and the bankruptcy filing from the creditor.

Second, if you go on a spending spree with our credit card immediately before filing bankruptcy, those charges are presumed non-dischargeable. This rule includes "luxury purchases" of more than $600 made within 90 days of the bankruptcy, as well as charges made on your card that you have no intention of repaying. The best advice is to stop using your credit card before you file bankruptcy.

Third, if you take cash advances totalling $875 within 70 days prior to filing bankruptcy, the debt is presumed non-dischargeable.

Fourth, a false statement to the credit card company on your application could be used to deny discharge of the debt. While credit card companies seldom use this tactic, if there is plain evidence of fraud (e.g. your yearly income was $20,000, but you claimed it was $200,000), the credit card company may file an adversarial action during your case and seek to deny your discharge.

Discharging credit card debt is usually a simple matter in a Chapter 7 bankruptcy case. It is very important to answer your attorney’s questions honestly and fully in order to receive the best advice. Your attorney can often avoid problems when they are revealed in advance, and can get you the relief you need.

 

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The saying goes, “You can’t take it with you.” However, when it comes to credit card debt, in many cases you can. When a credit card belongs to one person only, the debt also belongs to one person only. Whether that debt must be paid or passed along to another person after your death depends on a couple of factors.

If you die with outstanding credit card debt, the first question is whether there is enough money in your estate to pay the credit card company. State laws direct the administrator or executor of your estate to pay certain bills first. Anything left after paying creditors will be paid according to your will or in accordance with state law if you die without a will. Non-probate transfers like life insurance and payable on death accounts (especially retirement accounts and bank accounts) are not part of your estate after death. Credit card companies typically cannot reach money that is not part of the decedent’s estate.

Generally, if your estate does not have enough money to pay your credit card debt, the card company gets nothing. However, in some cases the credit card company may have some options to get paid. First, if the debt was jointly owned, the survivor is now responsible for the debt. For instance, if you and your spouse were jointly obligated on the debt, your spouse is now 100% obligated to pay. This rule does not apply to authorized users on your account.

Second, if you live in a community property state, assets that are accumulated during your marriage are considered joint property, and, in some cases, so are the debts. The states of Alaska, Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are community property states and a surviving spouse may be obligated to pay your credit card debts. Credit card debt will not pass onto other family members or friends.

Bankruptcy will discharge your credit card debts so that neither your estate nor your spouse will be affected. A dead person cannot file bankruptcy, but, once the bankruptcy is filed, the debtor can still receive a discharge after death. If you have concerns about burdening your loved ones with debt after your death, speak with an experienced attorney and discuss how the federal bankruptcy laws can help.
 

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