Law Office of J. Scott Logan, LLC Law Office of J. Scott Logan, LLC 2026-05-29T13:48:06Z https://www.southernmainebankruptcy.com/feed/atom/ WordPress /wp-content/uploads/sites/1201757/2021/11/cropped-favicon-32x32.png On Behalf of Law Office of J. Scott Logan, LLC <![CDATA[3 questions to ask when choosing between Chapter 7 and 13 bankruptcy]]> https://www.southernmainebankruptcy.com/?p=46803 2025-06-30T10:52:14Z 2025-06-18T21:45:45Z Is committing to a repayment plan practical? A large percentage of people pursuing personal bankruptcy file for Chapter 13 bankruptcy. Chapter 13 bankruptcy involves a multi-year repayment plan. The filer makes structured payments through the courts for between three and five years. In cases where discharging debts rapidly is the priority, Chapter 7 bankruptcy may be the better option. Chapter 13 bankruptcy can be a challenge for those with variable income levels, as they may need to modify the repayment plan if their economic circumstances shift before they make all of the mandatory payments.

Is passing the means test possible?

Chapter 7 bankruptcy is faster because there is no repayment plan required. However, only those with average or lower income typically qualify. Filers have to perform a means test where they adjust their income based on the pay that they have received over the last six months. They compare their adjusted income to the current state median based on their household size. Those with higher income levels may not be able to pass the means test and may therefore not be eligible for Chapter 7 bankruptcy.

Are property exemptions sufficient?

In a Chapter 7 bankruptcy, the trustee overseeing the filing potentially has the authority to demand that the filer liquidate assets to repay creditors before their discharge. Liquidating assets can impact the financial recovery process after bankruptcy. Individuals considering bankruptcy may need to put together an inventory of their personal property to determine if they can protect their assets or if property liquidation might be necessary. In cases where people have more resources that are vulnerable than they do debts that they could discharge, a Chapter 13 bankruptcy might be the better solution. Reviewing personal circumstances with a skilled legal team can help people choose the right type of bankruptcy. People contemplating a bankruptcy filing may need to discuss their concerns with someone familiar with bankruptcy statutes to clarify their needs, goals, priorities and potential ways forward. That’s both understandable and more than okay.]]> On Behalf of Law Office of J. Scott Logan, LLC <![CDATA[How to rebuild financial stability after bankruptcy]]> https://www.southernmainebankruptcy.com/?p=46801 2025-06-30T10:52:37Z 2025-04-15T19:27:14Z Understand your bankruptcy type Before you begin rebuilding, you must understand the type of bankruptcy you filed. Chapter 7 bankruptcy typically involves liquidating assets to pay off creditors, with the remaining debt discharged. Chapter 13 permits you to retain more assets but requires a repayment plan over three to five years. Each type has implications on your credit report, with Chapter 7 remaining for up to ten years and Chapter 13 for seven years. Knowing these details will help you plan your recovery strategy.

Secure employment and housing

A stable job and housing are foundational to rebuilding your finances. If you are unemployed, prioritize finding a job that provides a steady income. Similarly, securing a reliable place to live is crucial. Both stable employment and residential histories demonstrate reliability to future creditors. Landlords and employers may check credit histories, so improving in these areas benefits you.

Prioritize timely bill payments

Consistently paying your bills on time is key to improving your credit score. After bankruptcy, it is beneficial to maintain a clean payment record. Avoid overextending yourself financially and keep track of all expenditures. Remember that your bill payment history significantly influences your credit score.

Maintain a positive bank balance

Opening and maintaining checking and savings accounts is vital for demonstrating reliable cash flow. Many banks offer second-chance programs for individuals with charged-off accounts. Keeping a positive balance in these accounts shows creditors and employers that you are financially responsible.

Rebuild your credit

Rebuilding credit requires patience and careful management. Consider obtaining a secured credit card, which requires a deposit equal to your credit limit. Use this card wisely, keeping charges below 20% of your available credit and paying the balance in full each month. This shows lenders that you are managing your finances effectively. You can also use free credit score services to track your progress. These services can help you monitor your credit report, protect against identity theft, and understand how your score evolves. As your score improves, you will receive better offers from creditors, eventually transitioning from a secured card to a standard credit card.

Reflect on past financial decisions

Understanding why you filed for bankruptcy can help you prevent future financial distress. Whether it was due to job loss, medical expenses, or overspending, identifying the root cause allows you to address underlying issues. In the future, you can create a budget that ensures you live within your means and avoid accumulating unnecessary debt. Rebuilding financial stability after bankruptcy in Yarmouth is achievable with a clear plan and commitment. Remember, bankruptcy is not the end but a new beginning. With determination and focus, you can stand on your own two financial feet and build a solid foundation for years to come.]]> On Behalf of Law Office of J. Scott Logan, LLC <![CDATA[How can personal bankruptcy affect income taxes?]]> https://www.southernmainebankruptcy.com/?p=46793 2025-06-30T10:52:28Z 2024-12-22T22:28:25Z Bankruptcy does not typically alter income tax liability For the most part, a personal bankruptcy filing has minimal impact on income tax obligations. Whatever the filer owes in taxes is likely to remain a valid financial obligation. Current and recent income tax obligations are not dischargeable debts. Typically, people can only discharge income tax debts when they are three years old or older. The amount due for the current year is not likely to change because of a bankruptcy filing. People do not have to report the amount discharged as income. There is an income tax document required for the bankruptcy estate. However, the trustee appointed by the courts handles the preparation and submission of that document. The one exception to this rule arises in a Chapter 11 case where the filer is their own trustee. In such cases, they may have to file Form 1041 for the bankruptcy estate. The main responsibility of the filer is to prepare their income tax return as usual. Even those who may not otherwise need to file a tax return because they do not currently have a job typically must file an annual income tax return after a personal bankruptcy. In cases where individuals file for Chapter 13 bankruptcy, any significant income tax refund could be subject to interception. They may have to surrender their income tax refund to contribute toward their repayment plan. Learning more about how personal bankruptcy filings may affect different financial matters can be beneficial for those seeking debt relief. Those who learn about the nuances of the bankruptcy process may avoid mistakes that could ultimately cost them more in the long run.]]> On Behalf of Law Office of J. Scott Logan, LLC <![CDATA[Four debt relief options]]> https://www.southernmainebankruptcy.com/?p=46792 2025-06-30T10:52:45Z 2024-11-08T16:01:50Z the survey noted above, can find navigating their debt to be overwhelming. In these situations, it is important to know that there are various legal pathways that can help alleviate financial burdens. Each offers unique benefits suited to different financial situations. Some examples include:
  1. Debt consolidation: This process involves combining multiple debts. This results in one debut which may have more favorable payoff terms such as a lower interest rate.
  2. Debt management plans: This focuses on negotiating with creditors to create a manageable repayment plan. Such plans often result in reduced interest rates and waived fees.
  3. Debt settlement: This involves negotiating with creditors to pay a lump sum that is less than the full amount owed. While potentially reducing debt load significantly, it can also negatively impact credit scores.
  4. Bankruptcy: Filing for bankruptcy may allow individuals to liquidate assets to pay off debts or create a repayment plan under the protection of the bankruptcy court. Bankruptcy can provide a fresh start but applicants should consider the potential impact to their credit before moving forward.
Navigating debt relief requires careful consideration and often, legal counsel. Each option carries significant financial implications and may affect one’s financial future. By understanding the risks and benefits of each option, individuals can choose the most appropriate path toward financial recovery for their specific situation.]]> On Behalf of Law Office of J. Scott Logan, LLC <![CDATA[Welcome To My Blog]]> https://www.southernmainebankruptcy.com/?p=46635 2023-05-19T03:25:19Z 2021-11-16T12:50:10Z