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Top Reasons to Wait Before Filing for Bankruptcy

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Time on clock stopped by nail, delay concept

If you’re thinking about bankruptcy, the timing of your filing can affect your case. There are certain scenarios when it’s better to wait before you file, so you can discharge more debts and keep more property. A bankruptcy lawyer at Groce & DeArmon can help you determine the best time to file. Today’s blog features some common reasons to postpone filing for bankruptcy. 

You Moved to a New State With Good Exemptions

Each state has exemptions that debtors can use to keep as much of their property as possible. Every state lists different exemptions. If you’ve recently moved to a new state, the immunities may be better for you than the ones of your old state. However, enough time has to pass before you can take advantage of the exceptions in your new state. Consider waiting to file for bankruptcy until you establish permanent residency in the new state. 

Related Post: Bankruptcy Exemptions in Missouri    

You Started a Lower Paying Job

You must pass the means test to qualify for chapter 7 bankruptcy. This test reviews your average earnings over the six months before you file. It’ll be easier for you to pass the means test with a lower income. If you recently took a job for less money, your means test average income reduces each month that you wait to file for bankruptcy. So, in this situation, delaying your bankruptcy filing can help you pass the chapter 7 means test.

You Anticipate More Debt Soon

You can only wipe out debt that exists before you file. If you expect to take on medical debt for an upcoming surgery or credit card debt to repair an appliance in your home, it’s best to wait to file until after you incur that debt. Since you can only receive a chapter 7 discharge once every eight years, you don’t want to file right away even though you’re going through a hard time.    

Related Post: What to Expect Before Filing for Bankruptcy in Missouri

Request a Consultation With a Bankruptcy Lawyer

The experienced lawyers at Groce & DeArmon specialize in chapter 7 and chapter 13 bankruptcy cases. If you’re faced with unaffordable debt, this is a strenuous burden. We can help you make a fresh start. You can request a free consultation on our website or call our law office at (417) 862-3706. 

Groce & DeArmon Address Bankruptcy & Medical Debt

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File folders with past due medical bills

Medical bills can be a heavy burden for individuals and their families. If you or a loved one faces overwhelming medical debt, you may consider filing for bankruptcy. In reality, overdue medical bills are a common reason for personal bankruptcies. Today, the bankruptcy attorneys at Groce & DeArmon discuss bankruptcy and medical debt. Read on to learn how you can wipe out medical debt in chapter 7 and chapter 13 bankruptcy. 

Related Post: How Does Bankruptcy Affect Medical Bills? 

What to Know Before You File 

There are some things you should be aware of before you file for bankruptcy. First, you can eliminate medical debt in both chapter 7 or chapter 13 bankruptcy. In a chapter 7 bankruptcy case, medical debt is treated as a nonpriority unsecured debt — it’s not secured by a piece of property. This means that your medical debts won’t receive priority, assuming the trustee can make payments to your creditors. If you’re battling substantial amounts of medical debt, a chapter 7 bankruptcy might be your best option to find relief.

You Can Get Rid of Other Debts, Too

If you file a case to discharge the medical debt, you’ll also get rid of other general unsecured debts. Medical debt is considered the same as credit card debt, personal loans, old utility bills, and money borrowed from friends or family.

You Must Still Qualify 

There’s no limit to how much medical debt you can wipe out in a chapter 7 case. That’s right, any medical bills that you put on your credit card will be discharged. However, you must still qualify, meaning that your income has to be low enough for you to pass the means test. So, the type of bankruptcy you file will depend on whether you meet the qualification requirements and what makes sense for your situation.    

What to Do When You File

When you file a case, you must list all your debts, personal property, and real estate. Even if your spouse doesn’t file for bankruptcy with you, you’re required to reveal all your family income and expenses. You’ll also disclose other financial details, including your marital status, recent property transfers, and recent debt payments. 

Related Post: An Overview of Student Loans and Bankruptcy 

Groce & DeArmon Can Help 

If you’re faced with medical debt, you’re not alone. Contact our bankruptcy attorneys to learn more about your options. You can also learn more about filing for bankruptcy on our website, or call (417) 862-3706 to see how we can help.

What Not to Do Before Filing for Bankruptcy

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Bankruptcy resources - the do's and don'ts

The process of filing for bankruptcy can be confusing and stress inducing. Because of this, many people misunderstand and mishandle the process, resulting in irrational or even unlawful choices that can result in anything from dismissal to criminal charges. In today’s blog, bankruptcy attorneys Groce & DeArmon explain what not to do before filing for bankruptcy to keep you informed and to help protect you from getting in trouble.

Don’t Lie About Assets

You are required by law to provide complete and accurate information about your financial situation. Knowingly misrepresenting your information is a criminal offense that can be punishable by fines or imprisonment. It is also important to include all pertinent information, because the bankruptcy court may dismiss your case if it is not complete.

Don’t Run Up Your Credit Card Debt

Credit used within 90 days of filing for bankruptcy usually will not be included in your bankruptcy debts. Furthermore, if a creditor has reason to believe that you ran up your cards before filing, it will challenge your case, and you may end up having to pay your credit card debt in full.

Don’t Take On New Debt

Just like running up credit card debt, it is extremely irresponsible to take on new debt before you file for bankruptcy. This means no new car loans, no new student loans, and no payday loans. The responsible thing to do is stop all use of credit as soon as you decide on bankruptcy.

Don’t Pay Off Your Creditors

Paying off a creditor after you have decided to go bankrupt is not allowed. If you do this, it may be determined that you are favoring one creditor over another and could hinder your chances at completing bankruptcy.

Don’t Drain Your Retirement

Draining your 401(k) or retirement accounts to stash away money or use it to pay off creditors is risky business. Not only is it not allowed to pay off creditors before bankruptcy, but money in retirement accounts are exempt from bankruptcy and cannot be taken by creditors.

Don’t Transfer Assets to Family or Friends

Giving your possessions or assets away to friends or family with the intention of getting it back later is dishonest and can result in the denial of discharges. If you do sell property prior to bankruptcy in order to pay living expenses, this is allowed but must be supported with an explanation.

Do Consult a Professional Bankruptcy Attorney

Bankruptcy law is very complicated and easy to misinterpret, and there are many moving parts that can go undetected. This is why it is extremely important to hire and consult with a trusted and experienced bankruptcy attorney who can help you through the process. At Groce & DeArmon, our bankruptcy lawyers have over 30 years of experience to help determine if bankruptcy is right for you and help complete your case. If you are interested in Chapter 7 or Chapter 13 bankruptcy, you can start by scheduling a free consultation. Call us at 417-862-3706 or visit us online to learn more.

Related Post: When to Seek Legal Aid for Bankruptcy

Common Mistakes Made During Bankruptcy Protection Proceedings

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Couple looking at their finances

Filing for bankruptcy is often a lengthy and exhausting process. Bankruptcy is a complicated situation with a lot of moving parts. It can be easy to let things fall through the cracks, especially if you don’t have the right legal representation for bankruptcy protection. Today, Groce & DeArmon, P.C. take a look at some common mistakes made during the bankruptcy protection process and how the right legal representation can fix them.

Not Being Completely Transparent

The most common mistake made by people looking for bankruptcy protection is not being completely honest and transparent during the filing process. And for most people who aren’t completely transparent, they don’t do it intentionally or with malicious intent. Rather, they make a mistake or feel the pressure of their debt and leave things off the filing.

When seeking bankruptcy protection, it’s important that you are completely honest about your financial status. Providing the correct information ensures that you are properly qualified for the right chapter and avoid any potential fraud issues.

Related Post: What Is Bankruptcy Litigation?

Trying To Avoid Bankruptcy Protection With Credit Cards

Many people who are in debt, especially those who are in debt on their home or car, look to alleviate the problem through credit cards. While credit cards are a short-term solution to your debt problem, using them will rack up even more debt that will be impossible to pay in the long run. If you are thinking about seeking bankruptcy protection but think that a credit card is a better option, you need to speak to a bankruptcy attorney before taking out any form of credit.

Not Consulting An Attorney

There are a lot of things that you can do on your own to avoid bankruptcy protection. Your spending habits and budgeting ability can play a major role in avoiding the need for a bankruptcy filing. However, once you reach the point where bankruptcy is the only option, it is vital that you speak to an attorney. These filings are complicated, and mistakes can have substantial costs. Having a trained bankruptcy attorney on your side and working on your behalf will ensure that you get the most out of your filing.

Related Post: Common Reasons for a Bankruptcy Dismissal

Contact Groce & DeArmon, P.C. For More Information

If you are filing for bankruptcy protection, you will want to avoid making these costly mistakes. That will be easier with the help of an attorney. For more information and assistance, get in touch with Groce & DeArmon, P.C. at (417) 862-3706 or contact us online for more information today.

Bankruptcy Attorney: Signs It’s Time to Declare Bankruptcy

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Filing for bankruptcy is a huge decision, but for many, it is the only way to pay off their creditors. The process can be intimidating and your decision to file can have a lasting impact on your credit, but luckily, it offers the opportunity to start over with a clean slate. As bankruptcy attorneys, Groce & DeArmon, P.C. has helped hundreds of people file bankruptcy and prepare their case for court. Here, we discuss a few signs that it is time to declare bankruptcy.

Lawsuits with Debt Collectors

If you fail to make payments on your debt, it may be turned over to a collection agency. Receiving a phone call from a collection agency is one of the first signs that you should declare bankruptcy. Failing to pay the collection agency can result in a lawsuit, and if you lose your case, you may end up owing even more in legal fees. If you do not have a plan to pay back the collection agency, it may be time to contact a bankruptcy attorney.

Garnished Wages

In some jurisdictions, debt collectors can garnish your wages. This means that a portion of your paycheck is given to the debt collector until the debt is paid off in full. Generally, your employer is legally obligated to comply. If your wages are being garnished, you can protect yourself with an automatic stay by filing bankruptcy. Although you will have to go through the process of bankruptcy, you will receive some financial relief if your wages are being withheld to pay off the debt.

Struggling to Pay Basic Bills

Most people decide to contact a bankruptcy attorney when they can no longer pay their most basic bills, such as their utilities. Some people will temporarily cover their living expenses with their credit cards, but soon, it can be difficult to even make the minimum payments. Generally, people who find themselves in this situation will file for Chapter 7 Bankruptcy. In a Chapter 7 Bankruptcy case, a bankruptcy trustee will liquidate any of your non-exempt assets to pay off your debts.

Facing Foreclosure

Losing your home can be a scary and heartbreaking situation. If you are facing foreclosure, you may be able to file bankruptcy, catch up on your payments, and keep your home. People in this situation usually file for Chapter 13 Bankruptcy which allows them to create a payment plan for paying off their debts. To learn more about Chapter 13 Bankruptcy, contact a bankruptcy attorney.

Contact a Bankruptcy Attorney

If you think it’s time for you to file bankruptcy, set up a consultation at Groce & DeArmon, P.C.. Filing for bankruptcy can be a time-consuming and difficult process, but working with bankruptcy attorney ensures you get the fresh start you deserve. To set up a consultation, give us a call today at 417-862-3706.

How to Recover From Bankruptcy and Repossession

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Man stressed out about bankruptcy and repossession

Bankruptcy and repossession are among the worst situations that one can find themselves in. Unless you have the income to pay off your debts over time with a Chapter 7 filing, you will likely be forced to liquidate assets to pay off debts. Roughly 70% of bankruptcy cases are Chapter 7 filing, which means that most Americans are forced to liquidate assets to get out of debt, often times through repossession. If this has happened to you or it is currently happening to you, it can be hard to see the light at the end of the tunnel. The Groce & DeArmon blog is here to tell you why there is still hope and there are ways to recover.

Understand Why Bankruptcy and Repossession Happened

The aftermath of bankruptcy and repossession is a process – a particularly long and winding process. It is good to start this process with some introspective observation. Why did this happen? How did this happen? Life doesn’t end with bankruptcy and repossession. At some point, hopefully, sooner rather than later, you will be looking for a car or a house. It’s important to remember what mistakes were made and led to bankruptcy and repossession so that you won’t make those same mistakes in the future.

Find Out What Your Options Are

Each individual instance of bankruptcy and repossession are unique, so they there may even be options in what happens to your assets. Often, banks and repossession companies will work with you to get your car back by paying back the loan or setting up a payment plan. However, you also have to consider our last section. Even if they will help you get your car back, will you be able to pay for it? Is it a wise decision. And if you are really in dire straights, would you be able to pay for the insurances, gas money, and maintenance on top of the loan?

So while there may be options for you to keep your assets, it may not be wise to do so. If so, it’s important to sit down with a bankruptcy attorney and find out what is best for you in your situation and context.

Planning For the Future

Once the dust settles on bankruptcy and repossession, life goes on. Which means it’s time to make a plan for moving forward. This can’t happen unless you understand your debt and know your capabilities. It is vital that you don’t bite off more than you can chew in your recovery process. You may have to downsize significantly with your housing or use public transportation for a while. You may need to work overtime or find another job. These things aren’t ideal, but they will help to set up your long-term future in a way that is manageable.

Groce & DeArmon, P.C. Want To Help

The road to recovering from bankruptcy and repossession is a long one and we don’t sugarcoat that. However, Groce & DeArmon, P.C. exists to help people like you handle your debt. Contact us today at (417) 862-3706, call us toll-free at 1 (800) 640-3706, or visit our website for more information.

Who is Eligible for Chapter 13 Bankruptcy?

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Chapter 13 Bankruptcy

Filing for bankruptcy is never an easy option, but for some debtors, Chapter 13 Bankruptcy may seem like the best for a bad situation. Unlike Chapter 7 Bankruptcy which requires you to liquidate your assets to pay off your creditors, Chapter 13 Bankruptcy allows you to make payments on your debt over a period of several years. Although this may sound like an ideal option, not everyone is eligible to file for Chapter 13 Bankruptcy. Below, a Groce & DeArmon bankruptcy attorney discusses the eligibility requirements.

You Cannot Be Business Entity For Chapter 13 Bankruptcy

Chapter 13 Bankruptcy only applies to individuals, not business entities. Instead of filing under Chapter 13, corporations and limited liability companies (LLC) must file under Chapter 11 Bankruptcy. However, sole proprietorships are the only exception to the rule. If you own your own business, you may be able to put the debts under your name and file under Chapter 13.

Your Debts Cannot Be Too High

If your debts are too high, you will not be eligible to file under Chapter 13. The amount of debt you can accumulate adjusts for inflation, but as of 2017, your secured debt cannot exceed $1,184,200 or your unsecured debts cannot exceed $394,725. If your debts are greater than the current limits, you may have to file for Chapter 7 Bankruptcy instead.

You Must Have Sufficient Income

To qualify for Chapter 13, you must prove to the bankruptcy court that you can pay back your debt in full. Therefore, you must have sufficient disposable income to make payments after taking into account your other required expenses, such as your car loan, mortgage, and any other payment obligations. As long as you have the ability to make your debt payments, your income can come from a variety of sources, including regular working wages, self-employment, pension payments, child support, and more. To see if you have enough disposable income, consult a bankruptcy attorney.

You Must File Your Income Tax Returns

Additionally, to file for Chapter 13 Bankruptcy, you must prove that you have filed your income tax returns for the last four years. When you apply for Chapter 13, be sure to provide a transcript of your most recent tax return filed with the IRS.

Contact a Bankruptcy Attorney

Filing for Chapter 13 Bankruptcy is a difficult and time-consuming process. To meet the eligibility requirements outlined by the bankruptcy court, you must provide proof of income and other necessary paperwork. To ensure you have the greatest chance of approval, consult a bankruptcy attorney at Groce & DeArmon, P.C.. At Groce & DeArmon, our team will work with you to develop a strong application and a convincing argument in court. To learn more about our services or schedule a consultation, contact us today.

A Bankruptcy Attorney Discusses Involuntary Bankruptcy

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A bankruptcy attorney

Involuntary bankruptcy cases are rare, but they are an important aspect of bankruptcy law. Unlike most bankruptcy cases, involuntary bankruptcy is filed by the creditor, not the debtor, making it a powerful tool to use in court. To give you a better understanding of how involuntary bankruptcy works, a bankruptcy attorney at Groce & DeArmon explains the basics.

The Purpose of Involuntary Bankruptcy

Creditors usually enact involuntary bankruptcy when a debtor is not paying their debts but has the assets to make a payment. Basically, the debtor has the ability to pay but is failing to do so – or simply refuses. By enacting involuntary bankruptcy, the creditor forces the debtor to make their payments, allowing the creditor to recoup any lost assets.

Typically, involuntary bankruptcy cases are filed against businesses, not individuals. This is because businesses have more assets than individual borrowers, giving creditors a greater chance of recouping their money. Individual borrowers, on the other hand, have fewer assets so forcing them into bankruptcy would be ineffective for the creditor, not to mention dangerous for the borrower. Although involuntary bankruptcy cases against individuals are rare, they still occur, especially when the borrower is extremely wealthy. If a creditor files an involuntary bankruptcy case against you or your business, contact a bankruptcy attorney immediately.

The Involuntary Bankruptcy Process

The involuntary bankruptcy process starts with one or more creditors filing an involuntary bankruptcy petition at the bankruptcy court. Once the creditors file a petition, the debtor has a set amount of time to respond. During this time, the debtor should seek legal counsel from a bankruptcy attorney to ensure they can fight their case in court. Once the debtor responds, the bankruptcy court will hold a hearing. If the judge believes that the creditors acted in good faith and the debtor has failed to make their payments, the judge will proceed with the bankruptcy. However, if the judge finds the case in favor of the debtor, it will be dismissed and the creditor may have to pay for the debtor’s legal fees.

Contact a Bankruptcy Attorney

Involuntary bankruptcy is a complicated and highly-specialized area of law, making it difficult to fight on your own. If a creditor files an involuntary bankruptcy case against you or your business, it is vital that you consult a bankruptcy attorney. Talking with a bankruptcy attorney ensures that you have the greatest chance of winning your case and protecting your assets. To speak with an experienced bankruptcy attorney, contact Groce & DeArmon today.

What Is the Process of Filing Chapter 7 Bankruptcy Without a Lawyer?

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Filing Chapter 7 Bankruptcy Alone Is Difficult but Possible

Hiring a lawyer is the most costly aspect of filing bankruptcy. With so much debt weighing them down, some people feel they can’t justify paying the bankruptcy lawyer’s fee. They want to try to file either their Chapter 13 or Chapter 7 bankruptcy without legal aid. From a legality standpoint, anyone can do this, but sometimes filing bankruptcy without the help of an established law firm can make the process more difficult than it needs to be. At Groce & DeArmon, P.C., we don’t advise anyone to try filing bankruptcy on their own, but if you do your research, pay meticulous attention to detail, and keep up with all the steps, you can successfully file Chapter 7 bankruptcy.

Determine If You Qualify for Chapter 7 Bankruptcy

You must take a means test before any other step. A means test allows you to determine your eligibility for filing Chapter 7 bankruptcy by taking into consideration your income, the number and value of your assets, and your debt. The less money you make and fewer assets you own, the higher chance that your case will be simple enough to possibly handle on your own.

If you do not qualify for Chapter 7 bankruptcy, then you will have to file a Chapter 13 bankruptcy. This form of bankruptcy takes a more complicated route. Chapter 13 bankruptcy forces you to make a repayment plan that the court must approve. Bankruptcy lawyers trained for this and write repayment plans on a regular basis. They can help you get approved.

Credit Counseling

Before you can properly fill out your bankruptcy paperwork, you must gather all the information you can about your debt. A credit report will tell you exactly what you owe and to whom. Once you have reports from all three major credit bureaus, you will need to talk to an approved credit education and counseling service provider.

Filing Paperwork

After you figure out your debt information and meet with a counselor, you will need to actually file the bankruptcy paperwork. You will need to download specific forms and fill out all the paperwork carefully. If you miss any steps or overlook anything in either this or the previous process, you could miss out on liquidating some unsecured debts.

Meeting the Trustee

After you finish all the paperwork, you will need to meet with the trustee to go over your case. He or she will ask you about your debt, assets, and overall bankruptcy. You need to answer each question honestly, and a bankruptcy lawyer can really help prepare you for this.

Don’t Do It Alone

Though you might be tempted to save money by not hiring a bankruptcy lawyer, working with a law firm will provide you with a simpler, more efficient, and more comprehensive bankruptcy. We streamline the process for you and help you take care of the most complicated aspects of the process. Contact Groce & DeArmon, P.C. to get started on your Chapter 7 bankruptcy.

Bankruptcy Attorney Advice: How Will Filing Affect My Spouse

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Bankruptcy Attorney & Spouse

Often we see situations where someone who is married needs to file for bankruptcy, but they want to file individually without involving their spouse. While this is entirely possible, you’ll want to keep a few stipulations in mind. Depending on your situation, there are certain factors that could end up affecting your spouse. We’ll discuss these factors further today, but remember to always consult with your bankruptcy attorney to figure out the best approach for your case.

Related Post: Handling Bankruptcy as a Family

How Their Property is Affected

If you live in a common-law property state, such as Missouri, assets that you own jointly with your spouse are considered to be both of yours equally. This means your jointly owned property is subject to the bankruptcy filing. If a jointly sold asset is seized by a creditor, they will pay your spouse equal to their holding in the joint asset. Your portion of the sold asset will go toward your debts. This happens during Chapter 7 bankruptcy. If your spouse owns property that is solely theirs, then it is most likely safe. Your bankruptcy attorney will be able to further examine your assets and tell you what is subject to seizure.

How Their Credit is Affected

Generally, your spouse’s credit will be unaffected by your bankruptcy filing. However, the issue of the joint property also applies here. If you file and a joint debt is on their credit report, the fact that the debt was discharged will most likely show up. It’s also important to keep in mind that this doesn’t necessarily mean your spouse is absolved of their portion of the joint debt. Since they aren’t filing, they still have the obligation to pay off their portion. If you’re looking to remove your spouse’s liability for those debts, you may look into filing bankruptcy jointly. It might be the best course of action for you. Again, it’s best to confer with your bankruptcy attorney to find out exactly what will and won’t be affected.

Related Post: Will Filing Affect My Children?

Contact a Bankruptcy Attorney Today

No matter your situation, a bankruptcy attorney at Groce & DeArmon, P.C. can help. We can guide you through every aspect of the bankruptcy process and make sure it goes as smooth as possible. Don’t let the burden and stress of debt control your life any longer. For more information, contact us today and schedule a free consultation with a bankruptcy attorney. We’re happy to help you get a fresh financial start.