If you're having financial problems, it's hard enough when debt collectors are pressuring you to pay on debts you actually owe. However, it can be just as hard when a collector is trying to force you to pay a debt you've already paid or never owed. There are many reasons why paid debts may come back to haunt you or you may be connected to debts you've never had. However, there are ways you can fight back against these collectors.
Determine The Debt Collector's Legitimacy
It's not uncommon to get calls from people trying to scam you out of your money by claiming you owe a debt. Therefore, you should make sure that the caller is an actual collection agency. Ask them them their name, address and phone number. Also, ask them about the creditor. If they hesitate or refuse to give you this information, then they may not be legitimate.
Get Verification of Your Alleged Debt
Ask them to send you, in writing, the specific details of the debt. They should inform you on what the debt is, when it occurred and exact amounts you owe including collection referral fees. Don't discuss the debt until you get written confirmation of this debt. Another thing that is useful to know is that even if you actually do owe the money, there is a statute of limitations on how long debt collectors have to collect on that debt.
Make Sure They Have the Right Person
Without giving them any more information, try to verify that you are the one that they're looking for. They may try to trick you by giving you the wrong information in hopes that you will correct them. This could make it harder for the future to dispute their claim and could open you up to a scam. You should also check your credit report for any unusual activity.
Check Your Records
Go through your personal records and see if you have proof that you've paid off the debt. This includes copies of your final credit card statement, possession of a car title (which is usually given after you've paid off your car), or other indications that your debt is paid in full. Keep these documents as proof for the next step in the process.
Send Proof That You Do Not Owe
If you've received validation of the debt, and you still think you don't owe anything, then you must send them a dispute letter within 30 days. Explain why you don't owe this debt without giving more information than is necessary. Send them the proof that the debt was paid off via certified, return-receipt mail. Block off any bank account and irrelevant personal information before sending these documents. They must stop contacting you except to tell you that they won't take further action or that the creditor will be taking you to court.
File a Complaint
The Fair Debt Collection Practices Act puts limits on the tactics that debt collectors can use to collect their debts. These include restrictions on who they can contact, when they can contact and how often they can contact you. If you feel that you are being harassed or intimidated with illegal actions, then you can file a case with the state Attorney General's office or with the FTC. You can also sue the creditor for any damage caused by them violating the law.
If you've already paid off a debt, or you never owed that debt, then you have rights when it comes to debt collectors. Don't let them intimidate you into paying a bill you do not owe. If you feel that the debt collector is using abusive or illegal tactics, or you've been threatened with a lawsuit, then contact the Michelson Law Office. We specialize in dealing with debt collection issues and can help you prepare your case.
Wisconsin is one of the few states that allow debtors to choose between their own state's exemptions and the federal exemptions when filing for bankruptcy. Exemptions provide a specified level of protection from liquidation for various types of assets.
Debtors must also choose between chapter 7 and chapter 13 bankruptcy, each of which provides forgiveness of some non-exempt debt. However, this choice will also be determined by the amount of property that needs protection from liquidation as well as the debtor's ability to repay creditors.
What Are the Primary Wisconsin State Exemptions?
Wisconsin state law allows doubling of exemption amounts for married applicants filing jointly. Major benefits include:
What Are the Primary Federal Bankruptcy Exemptions?
Federal law also permits doubling of exemptions for married couples filing jointly for bankruptcy. Major benefits of the federal system include:
What Are the Benefits of Using the Wisconsin State Exemptions?
Homeowners with a large amount of equity in their homes benefit most from the state exemptions. They provide protection for up to $75,000 in equity for single filers as opposed to only $24,925 in federal exemptions (homestead and wildcard combined), These totals are doubled for married joint filers.
Recipients of personal injury recoveries will also benefit from state exemptions, which protect up to $50,000 in recoveries, as opposed to federal exemptions that only provide up to $23,675 exemption protection.
What Are the Benefits of Using the Federal Exemptions?
Debtors with a large amount of personal property benefit more from the federal system. Single filers can protect $27,325 in personal property (including jewelry) while married couples can protect $43,500 with the jewelry exemption included.
By comparison, state exemptions provide only $17,000 for single filers and $29,000 for married joint filers.
What Are the Benefits of Chapter 7 Bankruptcy?
Filing for chapter 7 bankruptcy relieves the debtor of all debt after the bankruptcy is discharged. However, the debtor must surrender all non-exempt property to a trustee of the court for repayment of creditors. Debtors with no non-exempt assets will receive a clean slate after bankruptcy with no debt and all exempt property intact.
Debtors must qualify for Chapter 7 bankruptcy. Those whose household income falls below their state's median household income are automatically qualified. For example, the median income for Wisconsin (as of November 1, 2017) is $48,521 for a single occupant, $63,739 for a two occupant household, and more for additional occupants.
Debtors with income above the state median must undergo a means test which determines their disposable income (after household expenses). Debtors with little or no disposable income can file for chapter 7 bankruptcy.
What Are the Benefits of Chapter 13 Bankruptcy?
Chapter 13 bankruptcy protects non-exempt assets from seizure and liquidation through a debt repayment plan based on disposable household income. Debtors can catch up on late payments on mortgage and car loans while continuing to make regular payments.
Unsecured debts such as those for credit cards and personal loans are repaid according to income, usually at a fraction of the total debt. After a payment period of three to five years, the remaining unsecured debt is discharged.
Bankruptcy is difficult but definitely easier with guidance, and The Michelson Law Office will be there for you from the beginning to the end of the entire process.
Owning your own business can be exciting and give you the freedom to create a schedule that works well with other aspects of your life. When you own a business, you are responsible for every aspect of that business and it can become difficult when you start falling deeper and deeper into debt.
If debt starts to overtake your business and you are no longer able to meet your financial obligations, it can be hard to know what to do. For some businesses, filing bankruptcy is a great option to use when they need to get out of debt, but it is not right for every business. The following guide walks you through a few steps to take to stop drowning in debt.
Gather and Organize Your Proof of Income and Proof of Your Expenses
When you want to get advice as to whether or not you should file bankruptcy, you need to be able to show what the financial issues are with your business. Gather all bank statements, checks, and deposits that you can find to prove how much money you had coming into the business for the past six months to a year.
You need to prove how much money the business makes each month to show that you cannot afford to pay the debt that you have accrued. Being able to show proof of income for numerous months allows you to show if any changes have occurred during that time. Organize and group your income by month to show how much money came in from month to month.
Organize the bills associated with your business, as well. Do not forget to include wages that you pay to your employees, lease payments, and supply costs when organizing your debts. You need to show how much money you spend each month for the business and how much money you still owe to debtors that needs to be repaid.
Create a Profit Loss Statement
When you go to meet to talk about the options that are available to you when you are drowning in debt, you need to have a profit loss statement to show. The statement shows how much money you have coming into the business each month and how much money is being paid out each month. It is a detailed list that allows someone to get an overview of your debt to income ratio at a glance.
You can often create a profit, loss statement on the computer or have your accountant create one for you. The information that you gathered and organized regarding your business income and debt will need to be provided to the accountant in order for them to create the statement for you.
Learn What Options Are Available to You
Meet with a bankruptcy attorney to discuss what options are available to help your business get out of financial crisis. You may be able to consolidate your debt and pay a lower amount to eliminate the debt that you have. You may need to claim bankruptcy to stop debt collectors from coming after you for the debt that you owe.
There are certain stipulations that need to be met in order to claim bankruptcy for a business. The attorney can tell you which stipulations you meet and if there are any criteria you fall short on. There are a few different types of bankruptcy that you may be able to file and determining which is the best option for you can save you a lot of hassle in the end.
When you are ready to talk to a bankruptcy attorney about the options that are available to you, contact The Michelson Law Office. An experienced bankruptcy attorney will be able to go over the specifics of your situation to help you determine what approach is the best to take to handle your unique financial situation.
Did you know that you may be able to keep your home and your car even if you declare bankruptcy? Declaring bankruptcy is intended to wipe out your debts (or restructure them), but it doesn't necessarily mean that you lose all of your assets. If you currently have a modest home and car, there may be ways that you can hold onto them — even while resetting the rest of your debts and working to improve your credit.
Keeping Your Home During a Bankruptcy
Understandably, it's even more difficult to pay off your debts if you're without a home. That's why there are many ways to keep your home during a bankruptcy proceeding, depending on the type of bankruptcy that you file.
Chapter 7 bankruptcy liquidates the majority of your assets to pay off your debts. But if you don't have equity in your home, your home isn't an asset — selling your home wouldn't help. If you owe more to the bank than your home is valued at (or just slightly less), it's very likely that you're going to be able to keep your property. The amount of equity you can have in your home depends on the exemption amounts in your state, which an expert in bankruptcy law can advise you regarding.
Chapter 13 bankruptcy operates more as a debt consolidation than a true bankruptcy proceeding — rather than liquidating your assets to pay off your debts, it instead puts you on a structured payment plan to pay off your debts over three to five years. Because of this, you can nearly always keep your home during a Chapter 13 bankruptcy.
If you have a home that is well beyond your means, it is possible that you will need to either foreclose on it or short-sell it in order to get your finances on track. But most people who have a relatively affordable home will be able to keep their property even during a bankruptcy.Keeping Your Car During a Bankruptcy
Keeping your vehicle during a bankruptcy is similar to keeping your home; it depends on how much equity you have in your vehicle. Vehicles are more likely than homes to be underwater, and you can check the current value of your car using a resource such as the Kelley Blue Book. If you just purchased your car for $15,000, it may only be worth $11,000 now — which means you owe $4,000 more than it's worth.
As noted, Chapter 13 bankruptcy will generally let you keep your home and your car. The only exception is if you simply do not make enough money to pay off your current mortgage and vehicle loans under a debt restructuring program. Chapter 7 bankruptcy will have a specific allowance for personal property which varies by state but is often around $5,000. But that isn't the total value of the car, that's the equity of the car. If you currently owe $4,000 on a $9,000 vehicle, then you have $5,000 of equity in the vehicle and will likely be allowed to keep it. On the other hand, if you owe nothing on an $8,000 vehicle, you may be asked to liquidate it.
It's important to understand your rights during a bankruptcy. Though it's commonly believed that bankruptcy can be devastating, it's often one of the best ways to get yourself back on a firm financial foundation, and it's very possible to come out of a bankruptcy with both your home and your vehicle unscathed. To learn more about how a bankruptcy could benefit you, contact the experts at The Michelson Law Office - Bankruptcy.