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Salem Bankruptcy Law Blog

Can I get rid of student loan debt in bankruptcy?

You likely never thought you'd be in such a financial rough spot when you graduated did you? Well, since a college education is so expensive, millions of people take out student loans to make it through their four or more years in higher learning. Many of these people then fall on hard times and cannot repay the loans. They opt for bankruptcy in the hopes that it will help them with their student loan debt in New Hampshire.

In order to have your student loan debt expunged during bankruptcy, you will be required to prove that you are suffering from some sort of undue hardship. You will need to explain the situation to the bankruptcy judge and he or she will make a ruling based on what they hear regarding your situation.

What to avoid before filing for bankruptcy

If you count yourself among the many who are having trouble staying afloat financially, you may be considering filing for bankruptcy as a method of making your debt more manageable. Maybe you unexpectedly suffered an injury and accrued medical debt you were not anticipating, or perhaps your credit card bills spiraled out of control.

Regardless of your reason for considering a bankruptcy filing, however, know that there are certain steps you can take as you prepare to file that may make the process smoother. It is also critical that you familiarize yourself with what not to do before filing for bankruptcy, as taking certain actions can, at best, hinder the process, and, at worst, have you running afoul of the law.

Why pick Chapter 7 over Chapter 13

Deciding between Chapter 7 and Chapter 13 can be hard when facing bankruptcy. Both have their advantages and disadvantages. Plus, every situation is unique. Which one is best for you really depends on the specifics of your situation. The answer is different for everyone.

That said, here are some of the advantages of Chapter 7 and why you may want to use it:

  • You are not subjected to a repayment plan, as you would be with Chapter 13. When the bankruptcy case is over, you get a fresh start.
  • You can file no matter how much debt you have. There is no top-end limit.
  • The case proceeds fairly quickly. It generally takes around three months. With Chapter 13, you still have to make payments on that repayment plan for three to five years.
  • You do not lose your future earnings. You can get a job and really start over, financially speaking. Chapter 13 forces you to keep making those monthly payments, so future income is heavily impacted.
  • It's often the best option if you have no current earnings. Chapter 13 wouldn't work because, with no monthly income, you're not going to make those payments. Chapter 7 prevents the debt from getting worse as you miss more and more deadlines.

Getting a divorce? Follow these 3 financial tips

Getting a divorce will likely significantly impact you emotionally. It is hard to end your marriage, even if you know it is necessary. Along with the emotional difficulties come financial issues as well. If you do not prepare financially, your divorce may result in financial devastation.

While dissolving your marriage will inevitably affect your finances, it does not need to totally wreck you. Here are some tips for staying on top of your finances throughout the divorce process. 

The pros and cons of 2 standard custody schedules

Child custody schedules vary dramatically from one case to the next, depending on a whole host of factors. Two of the most common schedules, though, are as follows:

  • Switching the kids back and forth every week. This is often done on the Friday after school.
  • Switching the kids every two to three days. A specific schedule can be created so that both parents still get the same amount of time, but they do it in smaller chunks.

When deciding what you'd like to do, you have to weigh all of the pros and cons. Think about your needs as a parent and what will be best for the kids.

What not to include in your prenup

Your prenuptial agreement is intended to protect you if you get divorced, and it typically focuses on financial protection. For instance, if you have far more assets than your spouse or own your own business, you may want to make sure a divorce doesn't ruin the business or take half of those assets by stating up front that they stay with you if the marriage ends.

However, a prenup is not a way for you to make any stipulations you want. Some are illegal and others will not hold up in court. Below are a few things not to put in the prenup.

  1. Child support. The court determines this during the divorce. Your prenup cannot say you won't pay or determine how much you'll pay in advance.
  2. Child custody. The court makes this decision with the best interests of the child in mind. You cannot make it in advance, either by demanding to have custody of the kids or by saying you'll have no obligation to raise them.
  3. Illegal provisions. If the clause would break the law, that can sometimes get the entire document tossed out.
  4. Spousal support. People do try this, but courts usually do not abide by it and can overrule it, especially if it appears unfair and goes against local laws.
  5. Anything that gives you an incentive to split up. For instance, you cannot write a prenup saying that you get 100 percent of your own assets and your spouse's assets in the divorce. In some cases, a spouse under duress may be tempted to sign such an unfair prenup, encouraging the other spouse to ask for the divorce and gain financially.

3 red flags of credit card trouble

Credit cards are useful financial tools when you use them correctly. Unfortunately, sometimes they may lead to financial trouble. If you use credit cards for emergency cash, long-term financing or quick solutions, they may end up hurting your credit and costing you a significant amount of money.

If it gets too bad, you may need to file for bankruptcy to start over. But how do you know if you are at that point? Here are some signs you are in too deep. 

Bankruptcy likely for nonprofit that owes IRS money

A nonprofit organization based in Manchester is slated to file for bankruptcy protection, according to a recent news report. The nonprofit, known as Serenity Place, is well behind on tax payments to the Internal Revenue Service (IRS). The nonprofit was known for providing drug-abuse treatment services in an effort to fight the opioid crisis in the state.

According to records, the nonprofit had revenues of $1.9 million and $151,000 in its bank account as of June 2016. By the time the organization's financial situation collapsed in December 2017, there was just $8,600 in its checking account. The organization owes $182,600 alone to the IRS and leaders of Serenity Place are worried that if they don't file for bankruptcy, they will be required to pay the IRS out of their personal accounts.

Here's why credit cards are so insidious

Credit card debt can sneak into our lives slowly, at first. It might start with a new television that you want after you see a good deal on one at BestBuy. The next thing you know, you and your wife are planning an overseas trip, and you need to use the card to pay for a couple thousand dollars of expenses. Before you know it, you've racked up $10,000 of debt and you can't afford your monthly payments anymore.

Everyone is aware that credit card debt is not good for their finances. Nevertheless, it's important to review exactly why that is on a regular basis. Here's why credit card debt is bad in three simple bullet points:

  • Credit card debt continues to grow: The credit card debt you hold on your card likely carries a double-digit interest rate. This whopping figure -- sometimes in the 20 percent range -- will cost you a lot of money the longer you avoid paying it off.
  • The minimum payments are too low: Minimum payments are created in such a way as to make you feel like the debt isn't too much of a burden. The problem is that it will take you many years to pay off the entire balance if you only pay the minimum amount. By that time, interest really adds up. Just think how much better off you'd be if you had invested the money.
  • The items you bought are not appreciating in value: Most people use credit cards to pay for travel, medical expenses, consumer electronics, eating out, etc. These items do not appreciate in value and this means that the debt you have on your credit cards does not represent an investment for the future. In fact, it's the opposite.

3 costly social media mistakes you could make during divorce

Social media may be a huge aspect of your life, especially when it comes to connecting with family and friends. You may use your social media accounts to share everything from personal accomplishments to funny pictures. While the internet can be beneficial to your life, it can do some serious damage if you do not use it properly, particularly while you are divorcing.

You may be wondering how exactly posting on social media could worsen your divorce. Here are some costly mistakes you should avoid when you get online during divorce.

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