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Will Bankruptcy Eliminate Enough of Your Debt

Bankruptcy is a viable lifeline for those who are immersing in debt. Consumers often file petitions for releasing them from debt. And fortunately, in most cases, the petition is granted. But the real concern is that whether filing bankruptcy can relieve the situation.

Understanding bankruptcy

Bankruptcy refers to a court proceeding where the jury and the court trustee will examine the situation, concerning the assets along with the liabilities of people and partnerships with a debt that have become too overwhelming to be repaid.

Thankfully, bankruptcy laws were drafted to offer a second opportunity to people so that they can start over once again after facing a complete collapse of funds. No matter whether the bankruptcy and debt are results of poor decisions or misfortune, lawmakers can consider it a second chance which is vital for a fallback in this capitalist economy. If you are still hesitant about this option being able to eliminate debt then you can consider giving yourself a second chance.

Can bankruptcy eliminate debt?

Well, bankruptcy may not be able to eliminate all of the debt. For instance, non-dischargeable debts are so essential that they might not be discharged when you file bankruptcy. When all your debts are falling into this category, it may not be suitable for you to plea for bankruptcy.

These may include domestic financial support such as funds for children and alimony, debts incurred from false pretenses or fraud, priority tax debts. Other non-dischargeable debts include obligations stemming from personal injury caused by bad decisions like drunk driving. It may not be suited for student loans also unless you are able to prove that the undue hardship exception is applicable in your case.

In some cases, filing for Chapter 13 bankruptcy can offer an affordable means of reorganizing and repaying non-dischargeable debts by following a repayment plan of 3 to 5 years. There is a maximum debt cap with respect to Chapter 13 bankruptcy.

When to consider filing for bankruptcy?

Before you file for bankruptcy, it's important to educate yourself on how it works. It comprises a thorough process that all businesses and individuals should be ready to follow. When you are facing severe debt issues, filing for bankruptcy can be a strong way of remedying the situation.

This is because it can stop most of the fund-collecting actions such as wage garnishment, telephone calls, and even lawsuits in some cases. It can rule out enough of your debt including medical bills, credit card balance, personal loans, and a lot more.

Conclusion

Bankruptcy allows people in debt to wipe off certain monetary obligations and think of a fresh start. The two primary variants of bankruptcy lawsuits, Chapter 13 and Chapter 7 offer their own share of benefits in debt management. Even though it may not be able to relieve you from all kinds of debt, when you have a reputed and knowledgeable lawyer by your side, he can prevent a creditor from repossessing the property that cannot afford any more along with tax debts and debt stemming from fraud cases. This means, if you are in such a merciless situation, it's imperative to have a lawyer help you through the process.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Ombudsmen: Front-Line Advocates for Nursing Home Residents

Disagreements with a nursing home can arise regarding any number of topics, including the quality of food, troublesome roommates, lack of privacy, or services not meeting what was promised. Many disputes can be resolved by speaking with a nursing home staff member, supervisor, or moving up the chain of command. But if you can't resolve things within the nursing home, your next step should be to contact the local ombudsman assigned to the nursing home.

An ombudsman is an advocate for residents of nursing homes, board and care homes, and assisted living facilities who is trained to resolve problems. Under the federal Older Americans Act, every state is required to have an ombudsman program that addresses residents' complaints and advocates for improvements in the long-term care system. While ombudsmen do not have direct authority to require action by a facility, they have the responsibility to negotiate on a resident's behalf and to work with other state agencies for effective enforcement.

Every statewide program is usually composed of several regional or local ombudsman programs that operate within an Area Agency on Aging or other community organization. To find the ombudsman nearest you, contact the ombudsman office in your state, which can be found here.

In addition to resolving complaints, ombudsmen may provide information about how to select a nursing home and answer questions about long-term care facilities, help people find the services they need in the community instead of entering a nursing home, and provide education on residents' rights. Most state ombudsman programs publish annual reports about the problems and concerns they address. Many ombudsman programs have limited staff resources. For this reason, most local programs seek volunteers who can be trained to help visit residents, act as advocates, and monitor general facility conditions. To learn more about the ombudsman program, visit the National Long Term Care Ombudsman Resource Center at www.ltcombudsman.org.

What Are Advantages of Filing Bankruptcy?

Filing bankruptcy offers a solution to businesses and individuals to get rid of the financial difficulties if they cannot pay their debts. Thus, they can begin rebuilding the credits, thereby living life in a financially stable and positive way.

Though it will have an impact on the finances of the individual for several years to come, it comes with its own set of pros owing to which people prefer to file bankruptcy. There are a wide array of advantages of bankruptcy in Monterey Park, California, and surrounding areas:

Automated stay against the creditors

As you file bankruptcy, the court will release a stay against all kinds of debt collection activities against you. Though it will not cancel all the debts, it will be useful in suspending all kinds of debt collection proceedings till the bankruptcy case gets completed.

Hence, you do not need to lose your night's sleep over dreaded collection calls, letters, and emails from the debt collectors, property repossession, home mortgage foreclosures, wage garnishments, lawsuits upon the debts.

Helps in clearing a lot of debt

Another reason why a wide assortment of people prefers to declare bankruptcy is because they lend a helping hand in discharging unsecured and eligible debts, so you will be capable of managing the loans on a wide scale. So, you are going to have extra relief and time from the debt collection team to clear the utility payments, mortgage, and other debts without causing too many hurdles.

In addition, it allows you to fold the car payments into the repayment plan. Hence, you can be ensured that your property is not going into repossession. The best part is that you will get another chance to make your current payments and get rid of the debts completely.

Freedom from different debts

Through bankruptcy, you will be capable of wiping out a variety of debts, such as medical bills, credit card debts, civil judgments, personal loans, past-due utility bills, past-due rent, business debts, and certain tax debts.

Few of the debts, which cannot be erased even after filing bankruptcy, are the child support and the latest tax debts. Although it is not possible to discharge a few of the troublesome debts, it will give you the opportunity to repay the rest easily.

Gives you a new fresh start

After those dreadful calls from the debt collector, a vast assortment of clients looks for a fresh financial start. Hence, they will have the opportunity to live life without the need to worry about debt after filing bankruptcy. Hence, you do not need to worry or fear every time your phone rings, or you open the email. It also gives the option to recognize the financial affairs so that you can rebuild the credit.

In a nutshell, bankruptcy gives you peace of mind so that you can manage your finances effectively. According to bankruptcy law, the person filing bankruptcy will receive credit education. Hence, they can look back at the history and reset the credit and financial course. If you are successful in reaping benefits from bankruptcy, you will be capable of handling the finances in a more secure way than before. You can reach out to Fong Law Group in Monterey Park California and surrounding areas if you want to file bankruptcy.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

How Do I File for a Guardianship?

No one wants to see a loved one become unable to make decisions for him or herself. If this happens, however, the court may appoint a substitute decision maker, often called a "guardian," but in some states called a "conservator" or other term. A guardian is only appointed as a last resort if other, less restrictive, alternatives, such as a power of attorney, are not in place or are not working.

In most states, anyone interested in the well-being of an individual who may be incapacitated – called the “proposed ward” -- can request a guardianship for that person (also called a "conservatorship" in some states). An attorney is usually retained to file a petition for a hearing in the probate court in the proposed ward's county of residence. Protections for the proposed ward vary greatly from state to state, with some simply requiring that notice of the proceeding be provided and others requiring the proposed ward's presence at the hearing. The proposed ward is usually entitled to legal representation at the hearing, and the court will appoint an attorney if the allegedly incapacitated person cannot afford a lawyer.

At the hearing, the court attempts to determine if the proposed ward is incapacitated and, if so, to what extent the individual requires assistance. If the court determines that the proposed ward is indeed incapacitated, the court then decides if the person seeking the role of guardian will be a responsible guardian.

A guardian can be any competent adult -- the ward's spouse, another family member, a friend, a neighbor, or a professional guardian (an unrelated person who has received special training). An individual may nominate in advance the person they would like to serve as their guardian by executing a durable power of attorney while they are still competent to do so.

The guardian need not be a person at all -- it can be a non-profit agency or a public or private corporation. If a person is found to be incapacitated and a suitable guardian cannot be identified, courts in many states can appoint a public guardian, which is a publicly financed agency that serves this purpose.

In naming someone to serve as a guardian, courts give first consideration to those who play a significant role in the ward's life -- people who are both aware of and sensitive to the ward's needs and preferences. If two individuals wish to share guardianship duties, courts can name co-guardians.

When is Bankruptcy the Best Option?

Bankruptcy can assist you in becoming debt-free, but it is not the best solution for everyone. It's critical to comprehend how it will affect your day-to-day existence and to consider your options.

Collection calls, litigation, and wage garnishments are all stopped when you declare bankruptcy. It eliminates debt. And, contrary to popular belief, bankruptcy can improve your credit score.

When is Bankruptcy the Best Option?

Bankruptcy, according to credit reporting agencies and experts, is indeed considered one of the absolute worst things you could do to the credit rating. Nothing else, including foreclosures, charge-offs, repossessions, and collections, could lower the credit scores as quickly and dramatically as a bankruptcy. However, bankruptcy when faced with mounting debt that cannot be eliminated is also considered the quickest way to improve your credit score.

If you meet all of the following criteria, the bankruptcy option might be good for you:

• You can't see how you'll be able to pay off its debts.
• If you don't have numerous valuable possessions and the property has little or no equity, it's doubtful that the performance will change.
• You don't have to have a certain amount of debt to qualify. When your unsecured debts exceed the value of the possessions, bankruptcy may be an option for you. Credit cards, shop cards, and personal loans are examples of unsecured indebtedness.

How much and how quickly can credit scores improve?

Researchers discovered that filers' Equifax credit scores plummeted in the 18 months preceding filing bankruptcy then consistently rose afterward from filing for bankruptcy, depending on data from either Equifax credit bureau.

The following are some of the findings:

On Equifax's 280 to 850 scales, the average credit score for anyone who filed Chapter 7, the most prevalent kind of bankruptcy, in 2010 was 538.2. (Scores in the mid-600s and down are regarded below average.) The filers' mean score was 620.3 even by the time their lawsuits were dismissed during bankruptcy, which was generally within 6 months.

Chapter 13 bankruptcy, on the other hand, necessitates a three- to a five-year repayment plan, which is what most people fail to finish. Those that did finish, and received a discharge, on the other hand, saw their scores improve from 535.2 to 610.8 and up, according to the researchers.

Much lower benefits were seen in a recent study by FICO, the firm that invented the most popular credit score. According to Ethan Dornhelm, senior director of FICO's scoring and analytics department, median credit scores for persons who filed for bankruptcy from October 2009 to October 2010 increased from the 550s before filing to the 560s and above thereafter. (The majority of FICO scores range from 300 to 850.)

After two years, 28 percent of bankruptcy filers had 620 or higher credit scores. After four years, 48 percent had scores of 620 or higher.

The FICO study, on the other hand, made no distinction between Chapter 7 as well as Chapter 13, or between persons who were discharged and those who were not. Those who haven't paid off their debts may be skewing the outcomes. In other words, persons who filed for bankruptcy and were successful may have made more money than the median data show.

Conclusion

Right after a bankruptcy, it might be hard to obtain credit. Individuals who have finished bankruptcy, on the other hand, and were discharged, are much more likely to be granted fresh credit lines after 12 months as compared to those who were 120 days or more delinquent at the very same time, however, did not file, according to Nosal's research.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Medicaid's Home Care Waivers Can Help You Avoid a Nursing Home, But the Line May Be Long

Medicaid long-term care benefits traditionally pay mainly for nursing home care, but the federal government can grant “waivers” to states allowing them to expand Medicaid to include home and community-based services. The downside is that receiving care in a nursing home is an entitlement, while getting care at home is not.  

Medicaid is a joint federal-state program that provides health insurance coverage to low-income children, seniors, and people with disabilities. In addition, it covers care in a nursing home for those who qualify. Each state operates its own Medicaid system, but this system must conform to federal guidelines in order for the state to receive federal money, which pays for about half the state's Medicaid costs. (The state picks up the rest of the tab.) A Medicaid waiver allows states to waive some of the federal rules with the intention of providing services to individuals who wouldn’t normally be covered by Medicaid. The waiver must be approved by the federal government. 

The most common type of Medicaid waiver expands Medicaid to cover home care to individuals who need a high level of care, but who would like to remain at home rather than enter a nursing home. Care that may be provided by a waiver includes personal attendants, home health aides, medical supplies and equipment, respite care, counseling services, transportation, homemaking services, hot meal delivery, and more. 

Each state sets up its own waiver program, so the rules and requirements vary widely. Usually, to qualify an applicant must need a level of care similar to what is needed to qualify for Medicaid coverage in a nursing home. The point of the waiver is to allow an individual who would normally need nursing home care to remain at home, which is typically a far less costly form of care. States may also target different health conditions, such as HIV, Alzheimer’s disease, diabetes, cystic fibrosis, among others. Each state also sets its own income and asset levels for its waiver programs, which may vary from state to state, and may be different from the income and asset levels used for Medicaid coverage of nursing home care. 

The downside of state waiver programs is that waivers are not an entitlement, meaning that states are allowed to limit the number of people who qualify for services under a waiver. Just because an applicant meets the criteria for eligibility does not mean the applicant will be approved for the services. As a result, waitlists for filled programs can run for months or years. 

To find out your Medicaid home care options, you should check with your elder law attorney. 

To find and apply for a waiver program in your state, contact your state Medicaid office.  

How Much and How Soon Credit Scores Can Rise After Bankruptcy

After bankruptcy, you should be able to concentrate on improving your credit score for the next 12 to 18 months. When they take the correct actions, most people will experience some improvements within a year. You won't be able to get a bankruptcy removed from the credit record unless it was added in error. Bankruptcy has a greater impact on high credit scores as compared to low credit scores.

The higher the FICO score is for filing for bankruptcy, the greater the impact on the credit rating:

 

Credit Score Ranges

• (850-800) Excellent  200 points
• (740-799) Very Good  200 points
• (670-739) Good  200 points
• (580-669)  Fair 130-150 points
• (300-579) Poor

Regardless of your starting credit score before bankruptcy, you will most certainly not drop a significant drop after bankruptcy. Although your bankruptcy filing will be on your credit report, credit bureaus would like to make sure you take steps to repair your bad credit prior to taking on further debt and new credit. This will handle credit scores and bankruptcy.

This sliding scale system would deduct as many points as it takes to demonstrate that you have bad credit. If you also have poor credit, the score might barely improve (less than 579). Even post a bankruptcy filing; credit ratings of less than 500 are uncommon.

What Impact Will Bankruptcy Have on Your Credit Score?

When you file bankruptcy, as well as businesses, see the unfavorable information on the credit report, you might well be concerned about:

• Obtaining a vehicle loan
• Purchasing a home or renting an apartment are both viable options.
• Financing with high-interest rates
• Unsecured credit cards have low credit limits.
• Repayment schedules for student loans
• Late fees are subject to penalties.
• Credit should not be used for anything other than basics.
• Obtaining substantial cash deposits
• Obtaining loans without the assistance of a competent co-signer
• Some credit cards can have authorized users added to them.
• Deposits and refunds of security deposits

Whether you have credit or debt problems, you have solutions for all of these situations. Each issue can be addressed on your own or with professional assistance. It is possible to start over, particularly after filing for bankruptcy.

Post a bankruptcy, how do you rebuild your credit?

You can rebuild your credit with the following aspects:

• Post the bankruptcy stay prevents creditors from taking action against you, you can begin restoring your credit score. Bankruptcy stays on your record for seven to ten years, but the more you try to rebuild your credit each year, the less it will affect you as well as the financing you seek.
• After receiving the final discharge, you should wait 30 days. This implies that most (if not all) of the accounts will have zero balances, and creditors will no longer be able to contact you regarding obligations.
• If you still have credit cards, make a plan to pay off at least 70% of the balance each month. Every 6 months, doesn't open more than a new credit card (and solely when you can make the payments).
• To gradually establish a diverse mix of affordable debts, work towards that car loan or similar major loan.

Conclusion

If you try to restore your credit over 12-18 months, your FICO credit report could go from bad credit (often less than 579) to acceptable credit (580-669). This will take significantly longer to get a very good (740-799), decent (670-739), or exceptional (800-850) credit score.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Supreme Court to Hear Case That Could Increase the Bite That Medicaid Takes Out of Settlements

The U.S. Supreme Court has agreed to hear a case disputing how much states can recoup from Medicaid recipients’ settlements in personal injury cases. The decision has the potential to affect anyone who receives government assistance with their medical care following a disabling injury that results in a lawsuit.  

If you are injured due to another person's negligence and you receive care through your state's Medicaid program, the state has a legal right to recover funds it spent on your care from your personal injury settlement or award. The question is, how much of the settlement or award is the state entitled to, versus how much may you keep to help compensate for your injury and maintain your quality of life?

Here are the facts of the case the High Court will decide: In 2008, a truck struck and seriously injured 13-year-old Gianinna Gallardo in Florida. The state’s Medicaid agency provided $862,688.77 in medical payments on Gianinna's behalf. Her parents sued the parities responsible, and the case eventually settled for $800,000, of which $35,367.52 represented payment for past medical expenses. The settlement also included funds for future medical expenses, lost wages, and other damages. 

Under the formula used by the state to calculate reimbursement, the Medicaid agency claimed it was entitled to $323,508.29 in medical payments from Gianinna's settlement. The state’s formula included money in the settlement that was specifically allocated for future medical expenses. 

Gianinna’s parents sued the state Medicaid agency in federal court, arguing that Florida’s reimbursement formula violates federal law because the state should only be able to recover from that portion of her settlement allocated to past medical expenses. The Medicaid agency countered that it was entitled to satisfy its lien from the portion of the settlement representing compensation for both past and future medical expenses. 

When a U.S. district court ruled in favor of Gianinna, the Medicaid agency appealed. The U.S. Court of Appeals for the 11th Circuit reversed the lower court’s decision, ruling that federal law does not “prohibit the agency from seeking reimbursement from settlement monies for medical care allocated to future care.” (Gallardo v. Dudek, 11th Cir., No. 17-13693, June 26, 2020) The 11th Circuit’s decision in Gallardo directly conflicts with a 2018 decision by the Florida Supreme Court that decided that federal Medicaid law preempts Florida law and requires that the state only seek reimbursement from settlement amounts attributable to past medical expenses. Other state and federal courts have also differed on this question. 

The U.S. Supreme Court has agreed to hear the case to resolve the dispute among the lower courts. The decision will likely come during the Court’s 2021-2022 term.

Do I Have Enough Debt to File for Bankruptcy?

To apply for bankruptcy relief, you do not need to have a certain amount of debt. Whereas the amount of the debt is essential, there are much more crucial aspects to consider when deciding whether or not bankruptcy is already in your best interests.

 

Factors Which Will Assist You In Deciding Whether Or Not To File For Bankruptcy

One of the most crucial decisions you'll have to undertake in your financial future is whether or not to file for bankruptcy. Note that, aside from either the sorts of debt you have accumulated, when you will apply for bankruptcy is mostly determined by the circumstances.

The following are some of the things to think about while filing for bankruptcy:

Unsecured debts: If your debts are primarily unsecured, you can petition for bankruptcy. The level of debt doesn't matter when filing bankruptcy since there is no minimum debt. Credit card debt, medical costs, cash advance (payday) loans are instances of unsecured debts.

Secured debts: Whether you are overdue on a mortgage or auto payment, bankruptcy might be the best option for you. You'll be able to keep your home and have 3-5 years to make up the missed payments, sometimes at a much lower interest rate.

Employment situation: If you are unemployed as well as having difficulties making the payments, you may be able to file for bankruptcy and have some of the unsecured debts discharged. You could either stay current on the secured debts or use a Chapter 13 bankruptcy to catch up on such payments. Similarly, when you are employed but still unable to meet the debt obligations, required to file for Chapter 7 or Chapter 13 bankruptcy can allow you to keep the assets (house as well as car) while also freeing up cash to pay them off by preventing or minimizing payments on medical bills, credit cards, and other unsecured debts.

Paying bankruptcy legal expenses: To receive a debt discharge, you must pay court costs like the attorney fees, filing fee, as well as education classes. Note that filing bankruptcy will not wipe out any of these expenses. Nevertheless, these expenses are insignificant when compared to the money saved on prospective debt payments, which continue to rise due to interest plus late fees.

When Should You File For Bankruptcy Under Chapter 7 and Chapter 13?

Requirements for filing history: The length of time you must serve is determined by the kind of bankruptcy you choose and the conditions of the earlier dismissal.

Minimum monthly income: To be eligible for Chapter 7 bankruptcy, you must satisfy the Chapter 7 Means Test, which compares your income to other families of similar size in the state.

Other debt criteria that be acceptable: Payday loans, as well as credit card bills, are examples of unsecured obligations that can be dismissed in bankruptcy. Whenever you are "underwater," you could also discharge debts from such a car or residence that you no longer want.

Conclusion

In order to file bankruptcy, debtors don't need to have a certain amount of debt. Whether to declare bankruptcy and whether it is the best option for you largely is based on the unique situation.

Call Fong Law Group at (626) 289-8299 for a free consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

How Much Money Can You Have and Still Qualify for Medicaid?

In order to be eligible for Medicaid benefits a nursing home resident may have no more than $2,000 in "countable" assets (the figure may be somewhat higher in some states). Note that Medicaid is a state-run program, so the rules are somewhat different in each state, although there are federal guidelines.

The spouse of a nursing home resident--called the "community spouse" -- is limited to one half of the couple's joint assets up to $130,380 (in 2021) in "countable" assets. This figure changes each year to reflect inflation. Called the "community spouse resource allowance," this is the most that a state may allow a community spouse to retain without a hearing or a court order. The least that a state may allow a community spouse to retain is $26,076 (in 2021).

Example: If a couple has $100,000 in countable assets on the date the applicant enters a nursing home, he or she will be eligible for Medicaid once the couple's assets have been reduced to a combined figure of $52,000 -- $2,000 for the applicant and $50,000 for the community spouse.

Some states, however, are more generous toward the community spouse. In these states, the community spouse may keep up to $130,380 (in 2021), regardless of whether or not this represents half the couple's assets. For example, if the couple had $100,000 in countable assets on the "snapshot" date, the community spouse could keep the entire amount, instead of being limited to half. 

All assets are counted against these limits unless the assets fall within the short list of "noncountable" assets. These include the following:

• Personal possessions, such as clothing, furniture, and jewelry
• One motor vehicle, regardless of value, as long as it is used for transportation of the applicant or a household member. The value of an additional automobile may be excluded if needed for health or self-support reasons (check your state's rules).
• The applicant's principal residence, provided it is in the same state in which the individual is applying for coverage. In some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home; in other states, the nursing home resident must prove a likelihood of returning home. Under the Deficit Reduction Act of 2005 (DRA), principal residences may be deemed noncountable only to the extent their equity is less than $603,000 (in 2021), with the states having the option of raising this limit to $906,000 (in 2021). In all states and under the DRA, the house may be kept with no equity limit if the Medicaid applicant's spouse or another dependent relative lives there
• Prepaid funeral plans and a small amount of life insurance
• Assets that are considered "inaccessible" for one reason or another

Careful planning, whether in advance or in response to an unanticipated need for care, can help protect your estate while still meeting Medicaid's strict asset limits. To learn more, consult with your elder law attorney.