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Personal Bankruptcy Archives

Bankruptcy may be the better way to eliminate consumer debts

Debt settlement in Arkansas and elsewhere means that a consumer enters an agreement with a creditor to pay off a loan, often a credit card account, for less than what is owed. As such, debt settlement is the virtual end of the line for the account. This option occurs usually after a default and when the creditor knows that there is little likelihood of the account ever being paid in full. The consumer typically has the option to choose the debt settlement or the bankruptcy option. 

Debt management company files bankruptcy after investigations

When a debt management company promises help that sounds miraculous and asks for a substantial fund upfront prior to doing anything, the interested person should see a red flag. It would be wise to first research the company and check its rating with the business bureaus. For example, at this time no entity in Arkansas or elsewhere can eliminate student loan debt or make it go away, except in very limited circumstances within a bankruptcy filing upon proof of undue hardship.

The U.S. Constitution allows Congress to make bankruptcy laws

In Arkansas and all other states, a consumer bankruptcy is one in which an individual or a married couple file to eliminate and/or reaffirm specified bills that are mainly considered to be consumer debts. This can include personal credit cards, personal loans, car loans, mortgages and medical debt. The debts owed by a business entity are considered business debts and are primarily dealt with in a business bankruptcy.

Most retirement accounts are fully protected in a bankruptcy

Individual  retirement accounts and 401k retirement accounts, along with other recognized retirement plans, are exempted from seizure or interference in a bankruptcy. Federal bankruptcy law protects the owner's retirement plans so that they pass unaffected through a bankruptcy filing both here in Arkansas or any other state. The asset cannot be touched by the bankruptcy trustee to help pay for a person's debts, and the asset will remain effective and intact after the bankruptcy is discharged. However, the U.S. Supreme Court has ruled that an inherited IRA is not exempt and will be lost in a bankruptcy.  

Older bankruptcy has less impact than expected on credit reports

The first step to correcting and improving one's credit score is to obtain a copy of the credit report and examine it thoroughly. Although a bankruptcy technically may be reported for between seven and 10 years in Arkansas and elsewhere, there may be several inaccuracies or incorrect entries on a credit report that a person can correct on his or her own. Each type of credit blemish has a reporting window during which it can appear on your record.

Bankruptcy is a strong remedy to eliminate runaway medical bills

Cancer patients in Arkansas and nationwide, and those with a history of cancer, are more than two times as likely to file bankruptcy than others. Additionally, there are ample reports that indicate that medical bills are a top cause of bankruptcy filings in the United States. One of the problems faced by cancer patients and cancer survivors is that cancer therapy expenses have increased two to three times faster than other medical expenses.

Bankruptcy gives consumer control in resolving debt problems

It is frustrating for many consumers in Arkansas when a bank makes extraordinary monetary demands when the borrower is out of a job or laid up with a disability. Lower income in the form of unemployment or other benefits won't keep a family financially healthy and can be the ticket to financial insolvency. However, bankruptcy attorneys universally report that their clients have expressed their desire and need to pay their bills despite suffering unfortunate setbacks.

Bankruptcy can be the first option rather than the last

The popular layman's advice in Arkansas and all other states is to consider bankruptcy only as a last resort. However, a lot of emotional energy and money can be saved by considering bankruptcy as the first option, according to some debt relief experts. To clarify, it is wise to look at bankruptcy first as soon as it has been determined that the debtor's income is far too minimal to make even modest monthly payments toward the total debt owed.

After bankruptcy, rebuilding credit needs focus and good habits

In Arkansas and all other jurisdictions, studies show that people in all age brackets file for personal bankruptcy protection. The age group that contains the highest number of bankruptcy filings is the 25 to 44 age bracket. According to a prominent financial economist and university professor, a person can indeed rebuild his or her credit rating after bankruptcy.

Bankruptcy may allow consumers to eliminate crippling debt

When residents of Arkansas look into the question of filing for bankruptcy debt relief, they will generally learn that there are two basic types of filings for consumers with consumer debt. These are Chapter 7 and Chapter 13. Most consumers generally file a Chapter 7 bankruptcy, which is a powerful and even miraculous relief for certain overburdened consumers.