What is “Pre-filing” Versus “Recurring” Debt?

There is no question that most individuals will file bankruptcy because they can no longer meet their monthly financial obligations.

But, while the actual filing provides a “freeze” or “automatic stay” that allows the individual to pause and organize, he or she would not file if those monthly bills didn’t change. So, that brings us to the question “what bills will I still have to pay?”

First, it is important to understand the difference between a recurring debt and a pre-filing debt. The best example for a “recurring” debt is a utility bill. For the most part, your electric bill begins on the 1st of every month and ends on the 30th of every month. The individual pays this bill every month and then incurs the next bill immediately thereafter. This is the type of bill that you will continue to owe (and pay, if you want to keep the service) every month as you are receiving a service every month. In some instances, people will owe a balance on a utility bill and this balance may be eliminated in a bankruptcy filing, but that will almost always result in the company in question terminating your service. Simply, if you don’t pay the electric bill you will lose your electricity. This applies to car leases, car loans and mortgages. You may eliminate the debt, but then you will lose the service or, in some cases, the asset.

If you have to file bankruptcy, get a lawyer to look over your paperwork before you file. Bankruptcy laws can be very complex, and if you do not have a lawyer, you can get yourself in trouble. Not only are there legal issues that you could face, but you could also end up losing property and cash that you think are protected.

Pre-filing debt is best illustrated by a credit card. You used the card to make a purchase and you agreed, in using the card, to pay back that balance over time while incurring interest. For the purpose of this article we will presume the credit card was used for a purchase more than 12 months before filing. So, the item purchased was for One Thousand dollars ($1,000.00), one year ago and you are continuing to make payments. When you file for bankruptcy this will be a “pre-filing” debt. The debt already exists and you are not receiving a service or maintaining a loan on an asset. When you file for bankruptcy this debt will be eliminated and you will stop making payments. In addition, unless certain circumstances apply, you will keep the item you purchased. Of course, there are circumstances that could require the forfeiture of the asset, but these circumstances only apply in certain situations. NYBankruptcy.com will discuss all of these situations with you. Credit card debt can be eliminated in bankruptcy.

Also included in “pre-filing” debt is money owed for services received. The best illustration for this type of debt is medical bills. You received the service, your insurance maybe paid for part and now there is the outstanding balance and the threat of collection. “Service” debt, including medical bills, dental bills, can be eliminated in bankruptcy.

Pre-filing debt also includes bank loans, personal loans, personally guaranteed business loans, civil losses and a great deal more. Call NYBankruptcy.com today and we will discuss the “recurring” and “pre-filing” debts that you can eliminate and the financial freedom that awaits.

Improving Your Relationship With Money

Great ways To Improve Your Lifetime Relationship With Money

Money is a part of life. This is something that you just have to accept. To know how to manage real-life financial situations is necessary for you as a responsible individual. Learn as much as you can about financial independence. The article below reveals ways to pursue knowledge about this subject.

An honest assessment of your spending and actual income is necessary to develop a budget. Be sure that you are including every little bit of your income and not just what you bring home from your primary job. These values should come from your net income, not gross. If you are careful in taking a realistic look at your income, you will be able to accurately create a spending budget. To maintain your budget success, never exceed your incoming cash flow.

The next thing to do when devising an effective budget is to figure out what your expenses are. Create an itemized list of your expenditures, from regular monthly bills and groceries, to personal items and ‘fun money.’ Also, include other people’s expenses, such as your spouse. Bills that are paid on an annual, semi-annual or quarterly basis should be included, too. Be sure that your list is comprehensive and complete so that you have a reliable picture of your expenses.

Once you have determined your income and expenses, it is time to formulate an effective budget. First, decrease your total household expenses by reducing or eliminating any frivolous spending, such as going out to eat on your lunch break at work. Rather, try to make coffee at home and purchase new and exciting flavors to make it taste like you bought it outside. Continue to reassess your budget to find ways to decrease your expenses.

Everyone is trying all sorts of ways to save money these days. If your utility bills are astronomical, there are certain things you can do to lower them. An easy way to improve your home’s efficiency is to repair or replace an old hot water heater. Hire a professional plumber to make sure your pipes are leak-free. Since dishwashers use both water and electricity, you only want to use yours when you have a full load.

You can save money over time with appliances that are energy efficient. Unplug any large appliances that draw power when not in use, such as anything with an indicator light or display. These two minor changes will result in big savings for the planet, and will save you resources over the long haul.

Check the roof of your house and insulation. Leaks in either will cause an unnecessary increase in your monthly electric bill. The cost of upgrades will eventually be recouped in savings on your utility bills.

Use these tips to balance your budget and save some money. High-efficiency appliances can greatly reduce the amount of money you spend on utilities. You should buy them when they are within your budget. You will be able to manage your finances in the future.

 

For more information or advice visit New York Bankruptcy and their website.

3 Things To Consider Before Filing For Bankruptcy In New York

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Things To Consider Before Filing For Bankruptcy 

First, you should speak with an attorney before you even think of file for bankruptcy. You should, in fact, consult with an attorney before taking any steps towards bankruptcy. An individual may file for Chapter 7 or 13 bankruptcy without an attorney, or pro se, but it is not recommended. There are intricate requirements and stern consequences to a bankruptcy filing. Yes, a bankruptcy filing may be the answer to your problems. But if you file a bankruptcy improperly you could cost yourself a ton of money in legal fees and hundreds of thousands of dollars in lost assets.

For the sake of this article we will presume you will hire an attorney. Perhaps you met this attorney through NYbankruptcy.com and now are attending your “free consultation”. What can you expect?

Be Prepared.

The purpose of your meeting is to decide whether filing for bankruptcy is a viable option. In order for your attorney to make this decision he must analyze your entire financial situation. You need to provide your last two years tax returns, last sixty days pay-stubs, last sixty days bank statements and copies of all other financial accounts. Make the most of your “free” consultation and have these documents with you.

In addition to your income you should have a list of all of your assets. Bankruptcy law requires that you disclose everything from clothing to furniture so provide that information to your lawyer. Not only will you save time, but you will protect your assets. Bankruptcy law provide for exemptions that cover certain assets. It is, literally, impossible for your attorney to know what collectibles you may own or whether you have a car under your name for your child. Be proactive. The more information you provide the better your attorney may perform.

Your list of creditors is just as important as your list of assets. There are three (3) basic categories for creditors: Secured, Priority and Unsecured. Without getting into the discussion of which creditors are which, what is most important is that all creditors are notified of the bankruptcy filing. The last thing you want as a debtor is to hear from a creditor a year after you file and be told they never received notice.

Be Thorough.

Tell your attorney everything. Even the smallest detail can make the biggest difference.

You may be advised by a friend or some other person that lying about an asset will let you keep it or that excluding some credit card will help, but I assure you this is not the case. You should also keep in mind that your will be interviewed, under oath, by a Trustee working for the U.S. Government. It is one thing to conceal the truth from your own attorney in his conference room. It is quite another to try and lie to a federal attorney in a federal court house.

Follow Your Attorney’s Counsel.

This is not an attempt to vouch for every attorney practicing law. However, you came to your attorney for a reason. Your attorney, hopefully, practices in the area of bankruptcy law. This process is not new to them. You may be confused or anxious, but that is expected. And that is why you retained your attorney. If you feel that your attorney is not doing the right job or you have lost confidence then substitute your counsel. But, do not ignore counsel and act on your own. That will almost certainly cause problems if not a disaster.

These three basics will help prepare you for what you need to expect from yourself. Filing for bankruptcy is a serious process, but with proper counsel and management, including managing yourself, it can bring you the “fresh start” you need.