The common thought surrounding marriage may be, “what’s mine is yours.” However, that does not mean that your future spouse’s credit becomes yours – or even affects yours.
You have separate credit reports and scores, even when you marry. Getting married also does not automatically mean you become responsible for your spouse’s debt as well, such as student loans. Therefore, your partner’s past bankruptcy filing should not affect your individual finances or your credit score.
The event of marriage will not automatically combine your finances, or lead a future spouse’s past bankruptcy to impact your credit. Even so, getting married means you plan to build a future together. A spouse’s past bankruptcy – and the effect it has on their credit score – may then come into play.
This is especially true if you wish to:
Your spouse’s past bankruptcy can affect these types of investments. For example, mortgage lenders will consider both spouses’ credit scores for a joint mortgage. A past bankruptcy on one report could lead to higher interest rates or perhaps even a denial.
It is important to note that this is not a permanent situation. Your future spouse has many options to build up their credit again. Additionally, bankruptcy only stays on a credit report for a limited number of years – ten years for a Chapter 7 filing, and seven years for a Chapter 13 filing.
The most critical thing to do is address your finances before getting married. Some New Mexico couples delay marriage while they rebuild their financial standing. Others may simply create a financial plan to do so in the early years of their marriage.
Regardless of your strategy, discussing your finances before you exchange vows can help you protect your finances and your future together as a family. It is important to be open and honest, so you both can maintain and improve your financial health.
]]>When the Small Business Reorganization Act went into effect in 2020, it established subchapter 5 as a debt relief option for small business owners. Here are some of the basic elements of this form of bankruptcy that you should know.
The goal of subchapter 5 is to make it easier for small businesses to seek reorganization bankruptcies. According to the United States Courts, it does this by cutting costs and facilitating the bankruptcy process.
There are two fundamental aspects of this type of bankruptcy:
Throughout the process, you will work with the appointed trustee who will help create a fair repayment plan and assist with reorganization as well.
As mentioned above, subchapter 5 is designed to help small business owners. However, business owners must prove their eligibility to file. The factors for eligibility include:
It is critical to note that the Coronavirus Aid, Relief, and Economic Security Act (CARES) increased the debt limit to $7.5 million. The Bankruptcy Threshold Adjustment and Technical Corrections Act extended this increased limit until June 2024.
The process of a subchapter 5 filing differs from Chapter 11 bankruptcy. Therefore, it will be beneficial to seek guidance from an experienced bankruptcy lawyer to learn more about this option.
]]>So, what is the latest information on bankruptcy for this last year?
The three most significant statistics regarding bankruptcy from this year include:
Simply because rates of bankruptcy filings are on the downturn does not mean that financial struggles are as well. If you face unmanageable debt, there are options to seek debt relief. It is often helpful to discuss your concerns or questions with an experienced bankruptcy attorney to determine the best possible way forward as you approach the new year.
]]>Are you facing foreclosure? New Mexico has up to $20,000 available in FREE money to help homeowners!
The Homeowner Assistance Fund is a federal program to help homeowners impacted by COVID-19 catch up on mortgage and utility bills. The fund has been distributed to New Mexico and is known as the New Mexico Home Fund.
If eligible, the free money can be used to help pay for past due payments on your mortgage, utility bills, property taxes and homeowner insurance, as well as assistance with a possible decrease in the amount owed on a mortgage in order to prevent or avoid foreclosure.
Your hardship must be related to COVID-19. However, “related” does not mean that you had to have caught the virus. It could mean that you were unemployed, had a reduction in work hours, had an unexpected increase in expenses, or had a complete loss of income.
If you are currently in court litigation due to foreclosure, you can still apply!
If you are currently in bankruptcy, you can still apply!
These funds may take up to 90 days to be approved, but you must ask for permission from the courts to hold off on moving forward with your foreclosure while you are being considered.
Contact Giddens & Gatton Law, P.C. at 505-273-3720 for more information on obtaining this FREE government grant that you do not have to pay back, or for other questions about avoiding foreclosure.
The direct website for the New Mexico Home Fund is www.nmhomefund.org.
]]>Some of the most common myths surround your credit. Here, we will discuss some of these.
Fact: It is true that filing bankruptcy affects your credit, but it will not ruin it – and it certainly will not ruin your credit permanently.
Your credit score will drop after bankruptcy. However, there are many factors that affect how much bankruptcy impacts your credit score. The effect will be different for everyone.
You can actually start rebuilding your credit the moment after the bankruptcy discharge. That brings us to the next common myth.
Fact: This is not true. Filing bankruptcy does not prevent you from obtaining a credit card. Even so, there are two things to note:
As Bankrate states – and many sources agree – using a credit card is actually one of the best ways to build up your credit again. Even so, you must have a plan for how you will approach your debt and maintain your financial health after obtaining a new start.
That is why many people start with secured credit cards after they file bankruptcy. Secured credit cards require a deposit before spending – essentially, they are much more like a debit card. You could obtain secured credit cards to help improve your score again, with the advantage of less debt. It will not be long until you can obtain a new credit card, either.
Fact: Your credit report includes a lot of pertinent financial information about you, including:
Bankruptcy falls under the category of pertinent financial information. Therefore, it will appear on your credit report. However, it does not remain permanently. A bankruptcy filing stays on your credit report for seven to ten years, depending on whether you file Chapter 7 or Chapter 13 bankruptcy.
The most important thing to note is that rebuilding credit takes time. Bankruptcy may affect your credit in the short-term, but with a financial plan and a focus on the long-term, you can move forward in your new financial future.
]]>However, a Chapter 7 bankruptcy does not discharge all debts. Some debts – as well as the responsibility to repay them – will remain after you complete your case.
Here are the five most common debts that often remain after completing a Chapter 7 bankruptcy case:
Chapter 7 bankruptcy still discharges several kinds of debts, from medical debt to credit card debts. This makes it easier to retake control of your finances and your life.
Even so, it is critical to be aware of the debts that are not dischargeable before beginning the bankruptcy journey, so you can prepare yourself for the future.
]]>This isolation can make it seem like debt is not a common issue, or that bankruptcy is not a common solution. Is that true?
Bankruptcy is more common than many people might believe. However, financial issues are intensely private matters.
It is rare for people to publicly discuss their financial hardship, much less their decision to file bankruptcy. Seeking debt relief through bankruptcy is not a failure – unfortunately, many people still believe that stigma and myth about bankruptcy. This likely contributes to the thought that bankruptcy itself is also rare.
The number of bankruptcy filings varies each year. Even so, according to the United States Courts, there were:
The reports show that the number of personal bankruptcies has slowly decreased over the last few years, but there is still a significant number of filings each year. The numbers above show just how common it is to file bankruptcy.
Additionally, it is critical to note that there is not just one kind of person who might struggle with debt. There is not just one type of person who files bankruptcy either. Debt can come upon anyone and arise from a number of challenges, including:
It is not always possible to plan for these events that could have serious financial impacts. Therefore, it is not uncommon for individuals to end up struggling with serious debt. This is why there is a wide range of people who file bankruptcy every year.
Bankruptcy is a valid – and common – strategy to obtain relief from debt. If you have questions about how bankruptcy can help, you should consider speaking with an experienced bankruptcy attorney.
]]>However, the United States Census Bureau reports that families who receive at least one kind of government aid held about the same amount of debt as those who did not participate in such benefit programs. Managing debt can feel overwhelming in any situation, but families receiving benefits may feel even more stressed. Their first worry often revolves around whether or not they will lose the benefits they need if they decide to file bankruptcy.
There is a wide range of government benefits you may receive, including, but not limited to:
You and your family rely on these benefits. Thankfully, you can still seek debt relief while maintaining these critical benefits. Both federal and New Mexico rules classify most government benefits as exempt property in a bankruptcy filing. In fact, New Mexico law specifically protects most kinds of government and public benefits in bankruptcy.
In short, you will likely not lose your government benefits if you move forward with bankruptcy.
Additionally, those benefits would be excluded from the liquidation process. Your right to receive these benefits is typically exempt in all chapters of bankruptcy under either Federal or New Mexico exemptions.
Even so, there are a few things you should note:
Navigating the process of bankruptcy and identifying and categorizing your assets can be complex. That is why it is helpful to consult an experienced bankruptcy attorney to understand your rights, determine how you can move forward and secure your government benefits in these cases.
]]>There are options for family farmers to seek relief from debt and the financial challenges they face, but the thought of bankruptcy leads many farmers to worry about whether they will lose their property, their livestock and their livelihood?
Chapter 7 and Chapter 13 bankruptcy are some of the most well-known forms of debt relief. These options may worry farmers, particularly Chapter 7’s liquidation of assets to pay off debts.
However, they are not the only options available. In fact, family farmers have a specific chapter designed to help them:
Congress added Chapter 12 as a debt relief option in 1986, making many changes and additions in recent years. Family farmers must meet the conditions that make them eligible to file, but this option allows farmers to maintain ownership and operation of their farm and livestock during and after the bankruptcy process.
The goal of Chapter 12 is to help farmers achieve debt relief while they continue to operate their family farms. But how does that work?
Like with any type of bankruptcy or debt relief option, it is a good idea to obtain guidance tailored to your particular situation. However, some of the highlights of Chapter 12 are:
It is possible for family farmers to leave debt behind them and move forward. Chapter 12 can give them the opportunity to keep the farm in the family and continue their legacy in the agriculture industry.
]]>However, many New Mexicans considering these options often wonder: when is it the right time to seek such debt relief?
It is true that timing can play a critical role in the bankruptcy process, especially regarding when you file bankruptcy. For example, before filing bankruptcy, you may wish to consider:
These factors – as well as many others – could in fact impact the time of year you file bankruptcy. This is why it is often beneficial to consult experienced counsel when considering Chapter 7 bankruptcy or another chapter, so you can ensure you are eligible and move forward strategically to secure your financial future.
However, it is not always possible to delay a filing or plan for the precise time to move forward with bankruptcy. For example, no one can plan for a medical emergency that could leave them with a pile of medical bills – and severe debt.
Ultimately, when you file also depends heavily on your specific circumstances, including:
The decision to file bankruptcy – including when you file – is determined by multiple components. These components are generally particular to your personal and financial situation. So, the right time for someone else may not be right for you. It all depends on what is right for you, to get the debt relief you need.
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