Saving your vehicle in bankruptcy

by Seth Hyder | June 27th, 2017

We all need our vehicle. It gets us to and from work, it gets us to the grocery store, and many other places. But what happens if you file for bankruptcy? You might worry about keeping that vehicle, especially if it’s the source of your money problems. A Rainwater, Holt & Sexton bankruptcy attorney is ready to help explain the process to you.

Chapter 13 Options
The 910-Day Rule
If you have purchased a vehicle at least 910 days (about 2.5 years) from the date of the filing of a Chapter 13 bankruptcy, you are eligible to “cram down” the balance on your vehicle loan.

Cram Down of Your Vehicle Loan in a Chapter 13 Bankruptcy
A “cram down” of  an auto loan is a major benefit available in Chapter 13.  If you owe more on your vehicle than it is worth, or you are paying an exorbitant interest rate, cramming down a car loan in Chapter 13 bankruptcy can reduce your balance and lower your interest rate, thereby reducing your payment.

Making the Cram Down Stick
In order to make the “cram down” of the balance or the interest rate permanent, you must complete your Chapter 13 plan. The original balance and interest rate may be reinstated if you do not complete your Chapter 13 plan.

Extending Your Vehicle Loan
An additional advantage in a Chapter 13 bankruptcy is that you can extend your payments over the course of a 36 to 60 month plan, regardless of whether you meet the 910-Day Rule. For example, you have 42  months left on your auto loan, by proposing a 60-month Chapter 13 plan, you can extend your loan 18 more months, thereby significantly reducing the vehicle payment.

If you are behind on your vehicle loan, Chapter 13 can also help you catch up on your payments by paying the loan over the life of the Chapter 13 plan.

Chapter 7 Options
Reaffirming the Vehicle Loan In Chapter 7
A reaffirmation agreement is a contract with a creditor whereby a you agree to pay for a debt as if the bankruptcy does not apply. In a Chapter 7, vehicle creditors often encourage you to sign a reaffirmation agreement. In many cases, reaffirmation agreements are not in your best interest, as you are once again liable on the loan, subject to a deficiency judgment and potential negative credit reporting.

In many instances, it is best not to agree to a reaffirmation but continue to make the payments and keep the vehicle. Most creditors will allow you to keep a vehicle, as long as the payments are made and current. If no reaffirmation agreement is executed, you have the ability to walk away from the vehicle without any danger of a deficiency judgment, should you have any issues paying the vehicle loan in the future.

Bankruptcy Is Not An End Game

by Mike Rainwater | March 15th, 2017

People seek protection from the bankruptcy court for many different reasons.  Sometimes it is a business idea that did not work out as planned.  Sometimes it is an unexpected illness or other catastrophic event that causes unexpected expenses.  Sometimes it is the result of a job loss or other expected reduction in family income.  Sometimes it is the aftermath of a bad car wreck or workplace injury or a divorce or the death of the family breadwinner. And, yes, it is sometimes the result of simply getting over-extended to the point that the family is drowning in debt with no realistic possibility of surviving without liquidating unpayable debt.

Whatever the reason…seeking bankruptcy court protection is always a new beginning. It is not an end game. It’s the start of a new chapter of life. Some of the most successful people end up seeking bankruptcy court protection – because they took a chance. And, in our experience, many people are financially successful because they have already filed bankruptcy; they are no longer afraid of losing.

Whatever the circumstances, it’s important to understand that filing bankruptcy isn’t the end of the game. It’s just the beginning of a new round. It’s a fresh start for you and your family. Whatever the reason, the bankruptcy attorneys at Rainwater, Holt & Sexton can help you get the needed fresh start.

If you are considering filing bankruptcy in Arkansas, call us immediately for a free consultation. There are a number of things you need to know and consider before making that next step, and our experienced bankruptcy lawyers can help you make the right decisions. You don’t have to go through this alone. Contact us today.

Considering Bankruptcy? You Can Make Things Right

by Mike Rainwater | January 30th, 2017

Living paycheck to paycheck is simply part of life for many in Arkansas. When everything is going right, you have enough to pay your bills and perhaps a little left over. But when things go wrong, your financial situation can quickly deteriorate and leave you wondering how you’re ever going to again make ends meet.

At Rainwater, Holt & Sexton, we’re amazed at just how quickly a family’s financial situation can go south. Whether it’s due to a series of unfortunate events or one life-changing circumstance, a family who has never had financial trouble can quickly find themselves thousands of dollars in debt with creditors breathing down their necks. If that sounds like your situation, rest assured that you and your family have options.

To most people, the word bankruptcy means something negative. Truth is, it’s a process by which you make things right, financially, so both you and your creditors can move on to more productive things. Our system of commerce depends upon it. That’s right, our system of commerce actually wants people to declare bankruptcy when they need to. That way, creditors can know if a debt is actually collectible or not.  If not, then all agree it needs to be discharged.  If part of a debt can be paid, then all agree a plan needs to be implemented to pay that part over time. In the Bankruptcy Code, this process is called a wage earner plan. It is a court-ordered debt consolidation plan with the benefit of discharge of that part of debts that cannot be paid. Filing bankruptcy is not about fear, shame or guilt. It is about doing the responsible. It is about clearing out uncollectible debt. It is about getting overwhelmed debtors off the sideline and back in the game of American commerce.  It’s about helping creditors identify what debt not to pursue, so they will not waste any more time and money pursuing uncollectible debt. Filing for needed debt relief — to be administered through the bankruptcy court — is something that is good for you, good for your creditors and good for America.

If you have fallen on financial hard times, call our experienced Arkansas bankruptcy attorneys today for a free consultation. If you’re considering filing bankruptcy in Arkansas, there’s a lot you need to know before you get started. Just call us. We’ll work to optimize your bankruptcy claim, so that you and your family can start again on the right foot. We will give you the information you need to take the right next financial steps. Don’t hesitate; contact us today.

How to Pay Down Unsecured Debt

by Mike Rainwater | January 26th, 2017

30 percent of Americans report that they have credit card debt, one of the most common types of unsecured debt. Unsecured debts are any debts not backed by an asset, like student loans or credit card bills. Secured debts are those like a car loan, where the bank can repossess an asset – in this case, the car – for delinquent payments.

Lenders will begin collection attempts after the borrower stops paying in the form of reminders, emails, letters and phone calls. After 30 days, the lender can report nonpayment to a credit reporting bureau which in turn will affect the borrowers credit score, leading to higher interest rates and difficulty getting future loans. Paying off debt is daunting. Here are a few ways to start paying down unsecured debt.

1. Pay off the highest interest rate debt first

If you have several forms of unsecured debt (for example, student loans, medical bills and credit card bills), the highest interest rate will usually be on your credit cards. Focus on the highest interest rate debt first because this is the one that can grow the quickest.

2. Make the minimum payment on all your debt, and pay more than the minimum if you can

If you’re not making the minimum payment on all of your debt, you’re hurting your credit even more. At the very least, pay the minimums and if you can, pay more than the minimum, focusing on the highest interest rate debt first.

3. Consolidate all credit card debt onto one card

Take advantage of special offers and credit cards that allow balance transfers. If it’s possible, transfer the balance of your higher interest rate credit cards to a lower interest rate credit card. Consolidating all credit card debt onto one card will allow you to focus on one balance at a lower interest rate.

4. Consider bankruptcy

The principal goal of filing for bankruptcy is to wipe out all unsecured debts, eliminating the borrowers obligation to repay the debt. In certain situations, filing for bankruptcy might make sense for the borrower.

It’s not unusual to carry some debt – 8 out of 10 Americans are in debt according to the Pew Charitable Trusts. However, when debt becomes insurmountable, it’s invaluable to seek guidance from those who can help. If you’re concerned about your unpaid debts, seek a free consultation from a Little Rock bankruptcy attorney, like the attorneys at Rainwater, Holt & Sexton.

3 Common Questions About Bankruptcy

by Mike Rainwater | January 3rd, 2017

Filing for bankruptcy in Arkansas is a decision you shouldn’t take lightly. It’s something you want to be completely sure of beforehand to ensure you and your family’s best interests are protected. But how do you know if bankruptcy is right for you? You start by asking a lot of questions. At Rainwater, Holt & Sexton, we offer free consultations to all Arkansas residents considering bankruptcy, because we believe you shouldn’t have to pay to understand your options. Although we can’t answer all those questions in a single blog post, here are 3 common questions we get about filing for bankruptcy in Arkansas.

What kinds of debts can be discharged under bankruptcy?
Under Chapter 7 bankruptcy, there are a number of unsecured debts that can be discharged, such as credit card bills, medical bills, and personal loans. However, there are several types of debts that cannot be discharged under Chapter 7 or Chapter 13 filings, including:

  • Alimony and Child Support
  • Student Loans
  • Criminal fines or penalties
  • Civil judgments against you resulting from DWI convictions or fraud

How long does it take to file bankruptcy in Arkansas?
If you choose to file a Chapter 7 petition, your debts may be discharged in as little as three to six months. Under Chapter 13 bankruptcy, court-ordered payments can begin within 30 days of filing your petition, and those payment plans can take three to five years to complete.

Will I lose my home, car, and other property?
Not necessarily. One of the benefits of filing under Chapter 13 is that you can roll your home, car, and other secured property into your court-ordered payment plan, thus protecting that property from seizure. This is the main reason folks choose Chapter 13 over Chapter 7.

How do you find out which type of bankruptcy is right for you? Contact our experienced Arkansas bankruptcy attorneys today for your free, no obligation consultation. We’ll gladly answer all of your questions and set you on a course to the second chance you deserve. It’s time to take back control of your life, and it all starts with a single phone call. Contact us today.

Common Bankruptcy Questions

by April Kersten | December 5th, 2016

As a Rainwater, Holt & Sexton bankruptcy attorney I have been able to help many people through the bankruptcy process. I have also realized there are a lot of questions that most people have up front. Here are a few of those questions:

Do I need Chapter 7 or 13 Protection?

Bankruptcy is designed to give an individual a fresh start. If you have creditors harassing you, threats of repossession or lawsuits, or just can’t find a way to get all the bills paid each month, we would encourage you to come in for a bankruptcy consultation. An individual can file either a Chapter 7 or a Chapter 13 bankruptcy case – both types will protect an individual from garnishment and harassment upon filing.  A Chapter 7 bankruptcy is a great option if you need to shed unsecured debts such a credit cards or broken phone contracts. A Chapter 7 is designed to get rid of the unsecured debts weighing you down so you can focus on home or vehicle payments. It is generally important in a Chapter 7 to be current on car or house payments in order to keep the collateral.  A Chapter 13 bankruptcy will immediately protect a client from garnishment, foreclosure or even repossession by setting up a payment arrangement. If you have gotten behind on your car, a Chapter 13 will give you the chance to restart your payments fresh. A Chapter 13 bankruptcy will also allow you to catch up a mortgage while still getting rid of your credit card or medical debts.

Does BK ruin my credit for good?

Filing bankruptcy can be an intimidating but necessary thing. If you are worried about how a bankruptcy will affect your credit score, it is important to discuss that with a bankruptcy attorney before deciding to file. The impact a bankruptcy has on your credit depends on several factors. If you have really great credit before you file bankruptcy- your score will take a large hit. However, if delinquent accounts, lawsuits, or high debt to asset ratio, have already dragged your score down the impact will be much smaller. For many clients, delinquent accounts and repossessions have already eaten a hole in their credit scores and a bankruptcy may be the only way to clear these out in order to rebuild. Bankruptcy will allow these old, delinquent accounts to come off a person’s credit giving them a fresh chance to rebuild. A bankruptcy will be a mark on your credit history for up to ten years. However, once you have completed your bankruptcy you can begin to put good history on your credit to rebuild you score. We have had some clients begin this process within 12 months of completing bankruptcy.

Do I have to include all my debt in my bankruptcy filing?

A bankruptcy is designed to incorporate the big picture on an individual’s financial situation. So every debt a client has must be treated in some way during their bankruptcy. This may mean that a client will keep paying their mortgage themselves because they are current but get rid of all their credit cards when they file. It can mean that a client’s car and credit cards are working into a payment plan to pay off the vehicle over time and give a small percentage to their unsecured debts. The bottom line is that each debt must receive treatment in the bankruptcy whether it is repayment or discharge.

Can I file Bankruptcy for just me and not my spouse?

A bankruptcy can be designed as a joint filing to take marital debt together or as an individual filing. An individual is not required to file with their spouse at any time. However, we strongly encourage clients to review all their debts before making a decision as joint debts often require a joint filing to ensure the debts are discharged. If a couple is co-signed on a vehicle together, one spouse’s bankruptcy filing can affect the other. So we encourage clients to review all their debts and discuss with one of our bankruptcy attorney’s if filing joint or individually would serve their family best.

If you are considering filing for bankruptcy, call a Rainwater, Holt & Sexton bankruptcy attorney today.

Bankruptcy Law: There’s a Way Out for You

by Staff Blogger | November 21st, 2016

Most of us have gone through a financially rough time in our lives. It’s nothing to be ashamed of. It’s just part of life. Most often, you pull yourself out of those rocky financial situations on your own through hard work and diligence. However, sometimes there’s no amount of overtime, planning, or saving that can keep your head above water, leaving you with one option—bankruptcy.

At Rainwater, Holt & Sexton, we handle bankruptcy cases for one reason; the honest, hardworking folks in Arkansas deserve sound legal help when a tough time turns into a financial nightmare. Our experienced bankruptcy attorneys will fully assess your financial situation to determine the best next steps for you and your family. We’ll do our best to minimize the impact to your life while securing you the protection that filing for bankruptcy ensures.

If you are considering filing bankruptcy, don’t make the mistake of going it alone. Call our Arkansas bankruptcy attorneys today for a free consultation. We know what you’re going through, and we can help. There’s a way out of this situation for you and your family, and it all starts with a simple phone call. Contact our bankruptcy attorneys today.

Loan Modification vs. Bankruptcy

by Richard Atkinson | November 19th, 2016

Nothing is more important to your family than your home. However, when hard times hit, it’s hard to maintain a monthly mortgage payment. Once you get behind on your mortgage, it’s difficult to catch up and get back in good standing. Many people have heard of loan modifications, but it is hard to know what this is and if it is a better option than filing bankruptcy.

Loan Modification

A loan modification is a process where a homeowner can apply to have their monthly mortgage payment reduced to be more affordable. The mortgage can be altered in two ways: a reduced interest rate, changing the length of the loan, or adding missed payments to the end of a loan. This modification process is offered by individual mortgage lenders.  The best way to get a loan modification is to call your mortgage company and request an application. This is a process most home owners can get started themselves with no initial costs. Each lender has their own application and process, however, the majority will require documents such as recent tax returns or paystubs. A home loan medication, if approved, can stop a foreclosure, but a homeowner must wait for the bank’s approval. This is the worst aspect of a home loan modification, waiting to find out if the modification was approved and hoping the foreclosure is stopped!  If your home is set for foreclosure auction you MUST be in communication with the bank to know if you loan modification can halt the foreclosure.

Chapter 13 Bankruptcy

If your home is set for a foreclosure sale, the only way to be 100% certain the sale is stopped is to file a Chapter 13 Bankruptcy. At Rainwater, Holt, and Sexton, we regularly file bankruptcies to help save a home after a homeowner has waited and waited to hear on a home loan modification.  A Chapter 13 bankruptcy differs greatly from a loan modification. It will stop a foreclosure immediately and then set a repayment plan. The Chapter 13 plan will create a payment to ensure the regular monthly mortgage payment plus an additional amount is sent to the mortgage company to cure the missed payments on a loan. While the repayment plan provides for your home, it can also help by making your other bills more affordable as the plan can reduce or eliminate other debts such as credit card bills, medical bills and many other types of unsecured debt. Once you complete your repayment plan, a homeowner will restart paying the regular monthly mortgage payment to the lender and your loan will be in good standing. A homeowner can even apply for a home loan modification after they have filed a Chapter 13 plan. Once you start your repayment plan, you can contact your lender and apply for a home loan modification to further reduce your monthly payments. If approved, the our attorneys at Rainwater, Holt and Sexton will file paperwork with the bankruptcy court to finalize the loan modification and amend your payment plan.

A home loan modification is a great process to help homeowners struggling with their monthly mortgage payment. However, if you are facing a foreclosure and loss of you home, please come see us at Rainwater, Holt and Sexton to file a bankruptcy and ensure your home is safe.

What to do after Bankruptcy

by John Rainwater | November 9th, 2016


Congratulations, you have received your bankruptcy discharge at the end of your Chapter 7 or Chapter 13 case!  As you embark on your journey to rebuild your credit, ensure your financial future, and make sure you get the most from your new debt-free status, remember the following:

(1) Keep copies of your original bankruptcy petition, schedules and discharge order.  Although it does not happen every day, creditors have been known to try to collect on debts that were discharged in your bankruptcy. If any creditors attempt to collect after your bankruptcy, you can simply provide them with your bankruptcy case number which will show them the debts have been eliminated; therefore, there is nothing for them to collect. You may also need your paperwork to correct any issues with your credit report.

(2) If a creditor or debt collector contacts you after your bankruptcy discharge to collect on a discharged debt, it is a serious violation of the Bankruptcy Code. It may also violate the Fair Debt Collection Practices Act (FDCPA). If a creditor contacts you, inform the creditor that the debt has been discharged in bankruptcy and give them your case number. If the creditor continues to contact you, let us know!  We may be able to pursue an Fair Debt Collection Practices Act (FDCAP) on your behalf where, if we were successful, you would be entitled to compensation.

(3) Keeping track of your credit is a crucial step in rebuilding your credit profile. Check your credit report about three months after you receive your bankruptcy discharge. (It takes a while for the credit-reporting agencies to update your report.) You can get a free copy of your report once a year from each of the three major credit bureaus at  Filing for Bankruptcy typically shows on your credit report for ten years from the date that your bankruptcy case was filed, not the date of discharge. However, the impact of the bankruptcy on your credit rating will diminish over time, even while it is still on your credit report, as long as you work on rebuilding your credit. Each debt discharged in your bankruptcy should be noted as “discharged in bankruptcy,” or something similar, with a balance of $0 unless the debt was reaffirmed. If a debt does not show as discharged in bankruptcy, you can dispute the listing by sending a copy of your discharge to the credit-reporting agency along with the schedule (D, E, or F) that lists the debt.

(4) To start rebuilding your credit, you must (a) get any non-dischargeable debts back on track, (b) start building a history of regular on-time monthly payments and responsible use of a credit account, and (c) avoid taking on unnecessary debt.  Make arrangements to pay any non-dischargeable debts. If you have non-dischargeable debts, such as student loans or certain taxes, you will need to contact the creditor to make arrangements to pay them. If you do not arrange to pay these debts, the creditors can begin collection action and can report delinquencies on your credit report.

Do I Need to Hire a Bankruptcy Attorney?

by Richard Atkinson | October 12th, 2016

In 2015, over 860,000 bankruptcy cases were filed and another 1.2 million were pending in the US Courts. If you are one of the thousands considering filing for bankruptcy this year, you might be wondering – do I need to hire a bankruptcy attorney? While individuals are not legally required to use an attorney to file for bankruptcy, it is almost always recommended to have the support of an experienced bankruptcy attorney.

Varying Complexity: Chapter 7 vs. Chapter 13

There are two types of bankruptcy cases: Chapter 7 and Chapter 13. Chapter 7 is the simpler of the two, while Chapter 13 can be quite complex because more income and assets are involved.

Individuals file for Chapter 7 bankruptcy if they have little to no disposable income and want to totally wipe out their unsecured debts. In the simplest form of a Chapter 7 filing, it could be feasible to represent yourself without the help of an attorney, but even so, extensive paperwork and documentation are required, so it is always recommended to have the help of an expert. An example of a simple Chapter 7 bankruptcy ruling would be if your income is less than the state median, you do not own any assets and there are no priority debts or creditors alleging fraud against you.

Unlike Chapter 7, individuals file for Chapter 13 if their income is great enough that they can pay back their debt. If you are filing for Chapter 13 bankruptcy, it is always recommended to hire an attorney because you must propose a repayment plan to pay off the debts. Proceedings for Chapter 13 can be much more complicated than Chapter 7 because there’s more at stake, and it would be very difficult and not recommended for an individual to represent themselves in a Chapter 13 bankruptcy filing.

When to Contact a Bankruptcy Attorney

If you are considering filing for bankruptcy in Arkansas, you should contact a Little Rock bankruptcy attorney for a consultation. No matter the type or complexity of your bankruptcy filing, an experienced bankruptcy attorney will help you reach the most favorable outcome for your situation.

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