Tag Archive: pittsburgh debt lawyer

  1. Which Chapter of Bankruptcy Is Best for You?

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    Find the Right Chapter for You

    Considering filing for bankruptcy? You are most likely going to file a Chapter 7 or Chapter 13. But how do you know which bankruptcy option is best for you and your situation? The Debt Doctors are here to explain the major differences between Chapter 7 and Chapter 13 and help you decipher which case would be most appropriate.

    Types of Bankruptcy for PA Residents

    There are several types of bankruptcy, but only two are common for individual debtors. Chapter 7, which is a liquidation process. And Chapter 13, which involves restructuring debt into a long-term plan

    Chapter 7 Bankruptcy in PA

    In a Chapter 7 bankruptcy, you essentially wipe out your debts and get a fresh start. Chapter 7 is a liquidation where the trustee collects all the debtor’s assets and sells any that are not exempt, (click here to see PA Exemptions.) The trustee sells the assets and pays the debtor any amount that is exempt. Then, the net proceeds of the liquidation are distributed amongst your creditors.

    However, certain debts cannot be discharged in a Chapter 7 bankruptcy such as alimony, child support, fraudulent debts, certain taxes, etc. You can read more on PA’s Non-Dischargeable Debts here.

    In many Chapter 7 cases, the debtor has a large amount of credit card debt, other unsecured bills, and very few assets. In the vast majority of these cases, Chapter 7 bankruptcy can eliminate these debts.

    Chapter 13 Bankruptcy in PA

    Under a Chapter 13 bankruptcy, the debtor proposes a 3-5 year repayment plan. This plan goes to the creditors that are offering to pay off all or part of the debts from the debtors future income. Chapter 13 can be used to:

    • prevent a home foreclosure
    • make up for missed car or mortgage payments
    • pay back taxes
    • stop interest from accruing on your tax debt
    • keep valuable, non-exempt property, and more.

    As long as you stick to the terms of your repayment agreement, all your remaining dischargeable debt will be released at the end of the plan.

    Several factors go into the amount that is to be repaid, like the debtor’s disposable income. This is usually determined as part of the Pennsylvania Means Test. In addition, the total amount paid to creditors in the Chapter 13 plan must also be as much as creditors would receive if the debtor filed a Chapter 7 bankruptcy instead.

    To file a Chapter 13 bankruptcy, you must have “regular source of income” and some disposable income to apply towards your payment plan.

    Chapter 13 bankruptcy is generally used by debtors who want to keep secured assets like a home or car. When they have more equity in those secured assets, they can protect them with PA’s bankruptcy exemptions.

    Which Chapter is the Right Fit for You?

    Understanding the ins and outs of filing for bankruptcy can help you decide if it’s the right path for you. Chapter 13 bankruptcy is a reorganization and restructuring of debt. Whereas, Chapter 7 bankruptcy is a liquidation. If you are unsure which chapter is best for you and your situation, contact us for a free consultation. Making the right decision now can enable future financial success and eliminate sleepless nights.

  2. Unpaid Student Loan Bills Can Cost You Your Job

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    A recent New York Times article is stirring up a frenzy.

    In records obtained by The New York Times, government agencies in 19 states are permitted to seize state-issued professional licenses from residents that default on their student loans. Meaning nurses, firemen, teachers, lawyers, etc. are at risk of losing their professional licenses should they default on their student debts.

    The full article can be read here: NY Times Student Loans Licenses

    Luckily, Pennsylvania is not one of those 19 states. However, should you find yourself in financial distress, The Debt Doctors at QuatriniRafferty can play an important role in helping you decide what is the best financial plan for you. To receive the guidance you need for a brighter financial future, you can schedule a free consultation today.

    Advice from The Debt Doctors at QuatriniRafferty on student loan debt:

    If you are facing debt as a result of student loans, here are some tips and best practices from The Debt Doctors:

    1. Be sure to utilize all of the programs available including income based repayment, forbearance and deferment.
    2. If you are a parent, think twice about co-signing on student loans. In a lot of cases, a parent will co-sign for his/her child, but can’t afford it. It’s important to remember it’s your child’s education and you should explore all options available so they can finance this education themselves.
    3. Parents should also avoid taking money out of their retirements to pay for their child’s education. There are a lot of options available to fund education but very few to fund retirement.
    4. Avoid using a home equity loan to fund college. If you lose income or have any other financial distress it could make it difficult to keep your home. You don’t need to put your home at risk when there are many other options to fund education.
    5. If you have a student loan garnishment or a student loan company has begun any type of legal proceeding, contact The Debt Doctors at QuatriniRafferty. In many cases our attorneys can use a Chapter 13 bankruptcy filing to stop these negative actions and force the student loan company to defer your loans or accept an income based repayment.
    6. In general, student loan interest rates are some of the lowest. Don’t be in a hurry to pay them off. Instead, use your resources to build regular and retirement savings before you write a big check to your student loan servicer.

    What do you think? Comment below or share your thoughts on our Facebook!

  3. Student Loans and Credit Cards

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    Is It Possible To Manage Both Credit Card & Student Loan Debt?

    Going off to college comes with new found financial freedoms, and for many students that means their first foray into a world of credit and debt.

    The Credit CARD Act of 2009 restricted students under the age of 21 to open a card without a co-signer and direct promotional card offers on college campuses. This helped reduce the number of cards issued to students, but unfortunately only made a small dent in decreasing debt for those graduating.

    According to an Experian College Graduate Survey conducted in April 2016, 58 percent of soon-to-be-graduates said they had a credit card, while 30 credit cardspercent said they had credit card debt with an average balance of $2,573. Another survey found 63 percent made purchases without having funds to pay the bill.

    It’s no secret that average student loan debt has been steadily growing. In 1993-94, about half of bachelor’s degree recipients graduated with debt averaging more than $10,000. Two-thirds of the Class of 2017 graduated with debt and the average student loan debt was at $35,000 after graduation. This number more than tripled in two decades.

    We wouldn’t be overreaching to say there is a correlation between higher student loan and credit card debt. As a new grad, you’re facing some tough financial decisions as you begin life in the real world. For instance, which debt do you pay off first?

    Credit card interest rates are typically higher than student loan interest rates, which means this debt is more expensive. For example, a $10,000 student loan at a 6.8 percent APR paid over 20 years would cost $8,321 in interest. A $10,000 credit card balance at 17 percent APR paid over 20 years would cost $25,230 in interest, and that’s assuming both interest rates remain fixed over that payment period. The long-term interest cost goes up if the interest rate increases.

    In the end, both student loans and credit cards can keep you in debt for many, many years and it’s easy to get overwhelmed by them if you’re only making minimum payments. What it comes down to is making the proper decisions to meet your financial goals. Making the a few smart decisions when your in 20’s could set you up financial success instead of struggling with debt for years.

    This is where The Debt Doctors can play an important role in helping you decide what is the best financial plan for you to manage your debt. To receive the guidance you need for a brighter financial future, you can schedule a free consultation today.

     

  4. A Letter to Small Business Owners…

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    Dear Small Business Owner,

    Having been a small business owner myself, I have a passion for helping other entrepreneurs like me. Businesses are a puzzle that require finding the right mix of a good product(s)/service(s), finding the right people to work in the business, finding the right customers, and controlling your expenses to make a profit. After 13 years of working with and in both successful and unsuccessful businesses, I have had a lot of valuable experiences that can help business owners.

    However, because I am a bankruptcy attorney, most business owners will avoid talking to me until it’s too late. Most people would think that seeing a bankruptcy attorney is the end of their business, but I see my job as the opposite. Good bankruptcy attorneys help businesses survive. I always remember the words of one of my colleagues: “As bankruptcy attorneys, we perform resurrections, not funerals.”

    Here are some of the ways a bankruptcy attorney can help your business:

    • We can help you structure your business to protect personal assets.
    • We can assist in selecting the right corporate structure for asset protection and tax planning.
    • We can eliminate personal guarantee liability.
    • We can lower your debt service by eliminating or restructuring debt.
    • We can develop a plan to reallocate resources to pay off secured debt or taxes.
    • We can help identify quality professionals that help with accounting, bookkeeping and efficiency.
    • We can prepare your business for sale.
    • If necessary, we can wind down an existing business while preserving value to start a new business or transitioning into a new career.

    Many of these strategies can involve solutions that may not include filing for bankruptcy. Even if you did have to file for bankruptcy you would be in good company as some of America’s greatest businessmen have utilized bankruptcy prior to building some of America’s iconic brands, including Milton Hershey, H.J. Heinz and Henry Ford.

    When is it time to see a bankruptcy attorney?

    • When you are considering taking a loan that includes collateral or a personal guarantee. Some careful planning at this point can help you avoid taking on an onerous debt obligation. Careful planning can help you protect personal assets and give you options if your business experiences a downturn or fails.
    • When your income is insufficient to cover all of your monthly bills.
    • When debt service is keeping you from making a profit.
    • When you begin to have internal issues with investors or business partners.
    • When you are considering taking a factoring or accounts receivable loan. (These are the business equivalent of check cashing loans and should be avoided at all costs.)
    • When you have a tax debt you can’t pay.
    • When you are unable to pay trust fund taxes like payroll and sales. Business owners and some employees could potentially face personal liability and criminal sanctions for failure to pay these taxes.
    • When your bank stops lending or declares you in default.
    • When you or your business receive a law suit.
    • When you can no longer take a salary or draws for your hard work.
    • When you lose your passion for the business to continue.

    As small business owners and entrepreneurs, our job is more than a place we work. Our jobs become part of us.

    It is not a 9-5 job and in good times and bad we stay up at night thinking of ways to grow our enterprise or navigate the next big challenge. If you get to the point that you need help, I can be an excellent resource for thinking out loud about creative solutions to common issues you face.

    Personally, I love helping small business owners – at all phases of building a business – and in many cases these opportunities give me a new perspective to help future clients, or incorporate into my practice.

    So, don’t hesitate to call. I offer a free consultation. An hour with me can uncover a new path forward to increase profitability, restructure your business, or put past difficulties behind you so you can reignite the passion for what you do. Most of all, please do not wait until it is too late.

     

    Sincerely,

    Matt Herron

    Managing Attorney

    The Debt Doctors at Quatrini Rafferty

     

     

  5. Take Action – Improve Your Credit Score

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    Improve Your Credit Score

     

    “How do I improve my credit score?”…a question the attorneys at The Debt Doctors are very familiar with. The answer depends on a client’s specific financial situation, but there are some general ways to improve your credit score that apply to everyone.

    To get started, you will want to first evaluate your credit score.  To get a free report, you can visit www.annualcreditreport.com. After you’ve pulled your report, carefully review it and identify if there are any mistakes.  If there are, dispute the mistakes directly to the credit bureau. If the mistakes are not fixed, you can call The Debt Doctors.

    Next, you should try to establish 2 years of on-time payments for all of your accounts. This is a very important step since lenders look closely at your last two years of credit history. You will also want to utilize your credit by making sure you have at least 3 open accounts.

    Additionally, it’s essential to have available credit.  If you don’t and all your credit cards are maxed out, your credit score will go down.

     

    The best ways to improve your credit score:

    1. Pay your bills on time—not paying them on time can have a significant impact on your credit score

     

    1. Make sure you keep your balances as low as possible on all of your credit cards

     

    1. Only apply and open new credit cards if you absolutely must

     

    1. Don’t just move your debt around—pay it off

     

    1. Use the credit you have—show your ability to manage your credit responsibly

     

    Remember—time is your friend when trying to improve your credit score. After all, fixing a bad credit score doesn’t happen overnight. You can even rebuild credit after bankruptcy—it will take you 2-4 years to get your score back at a good healthy level. However, you can start rebuilding credit right after your bankruptcy discharge (something people are not always aware of).

    You should also keep in mind that your credit score goes up when you engage in behaviors that banks like. But be careful because they may not be what’s best for your finances. The best indication of a healthy financial situation—cash. Make sure you budget to save your money and fund retirement. To learn more about how to improve your credit score and turn around any financial distress you may be facing—contact The Debt Doctors today.

The Debt Doctors

607 College Street, Suite 101
Pittsburgh, PA 15232

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