If you have made the decision to file for Bankruptcy, you can start making an effort to repair your credit and get back on track.
The financial decisions you make after you file will impact how fast your credit can improve.
Check your credit. Within a few months of your finalization of bankruptcy, check to make sure your credit reports have discharged your debts and closed accounts are properly reported. You can request one free report per year from each of the three major credit-reporting agencies (Equifax, Experian and TransUnion).
Start a budget. You need to get your spending on track and under control. Check out our article on setting up a budget. If money is tight you may want to get an extra part time job and use that paycheck to jump start an emergency savings fund for any unexpected financial hardships. Another smart move is an emergency savings fund to help you weather unexpected financial hardship. You can set up Automatic Transfers from your checking account to a savings account. If money is tight, take a part-time job and use that paycheck to jumpstart your emergency savings fund.
Pay bills on time. Bill paying habits make a huge impact on your credit score. Making on time bill payments will improve your credit score over time. Meeting payment dates is a huge step in recovering from bankruptcy.
Acquire new credit but do it wisely. There are different products and services you can take advantage of to rebuild your credit. If you receive a secured credit card make sure they send reports of your payment history to the credit bureaus. Use your credit card wisely in order to build up credit only on items you can afford to show you are in control of your spending.
Apply for a loan. If you want to rebuild your credit score, two years after your bankruptcy you will be eligible for an FHA loan assuming you meet qualification rules. Some lenders can even qualify you for a car loan sooner than that however it will probably be at a high interest rate.
While the formal record of a bankruptcy remains on your credit report for 7 to 10 years, its impact recedes over time. Your bankruptcy is a reflection of the past. The future is completely within your control, and how you handle your finances going forward will tell your creditors whether you in fact are a good “risk” to do business with. By following these steps to recover from bankruptcy, you improve your chances of increasing your credit score over time, and having a better financial future.
One of the most common types of corporations is a C Corp.
A C Corp creates a separate legal structure that helps shield business owners’ personal assets from judgments against the company.
C Corporations have specific structures that include shareholders, directors and officers. There are many advantages to forming a C Corp:
A business owner protects his or her personal assets from the business.
Your business will be able to exist even if the owner leaves the company.
A C Corp has no limit on the number of shareholders.
You have unlimited growth potential through the sale of stock.
You get to take advantage of certain tax advantages such as tax deductible business expenses.
However, a C Corp’s profits are taxed when they are earned and taxed again when distributed as shareholders’ dividends – also known as “double taxation”. Shareholders in a C Corp cannot deduct corporate losses, which is possible to do with an S Corp.
If you are interested in forming a C Corporation for your business, call The Law Offices of Page, Lobo, Costales and Preston. We have helped many businesses form C Corporations and S Corporations and can help you too!
Congratulations! Owning your own business is exciting and rewarding. Page, Lobo, Costales and Preston APC would like to share some tips for starting up your own business.
Page, Lobo, Costales and Preston APC helps small businesses get setup legally and would like to share some questions and answers for all you entrepreneurs out there. If you are setting up a new business, call The Law Offices of Page, Lobo, Costales and Preston.
Q: What type of business entity should I setup my business as?
A: You can begin as a “sole proprietor” to start doing business. It is easy and inexpensive to start as a sole proprietor however there is no legal protection for your personal assets. This means you have no limit to your personal liability for business failures or mistakes. If you want to limit your liability, set your business up as a corporation instead.
Q: Do I need a Federal Tax ID number?
A: If your business is a corporation, an LLC or has employees you need a Federal Tax Identification Number. Even if you are a sole proprietor you might want to get an EIN. If you do not have one as a sole proprietor, you can use your social security number however an EIN is more professional and less risky than giving out your SSN.
Q: What is a resale license?
A: A resale license will enable your company to purchase goods or materials for manufacture or resale without paying sales tax.
Q: Do I need to file a fictitious business name?
A: If you use any name other than your own, you will need to file a “doing business as” name. This will enable the public to know who is actually operating the company.
Have questions about setting up your business? Call us to get answers: 951-461-2500.
Hiring a bankruptcy lawyer is one of the best moves you can make if you are filing for bankruptcy. A bankruptcy lawyer knows the ins and outs of the bankruptcy process, have done plenty of research on the topic, and have dealt with the court system for years.
When looking for a bankruptcy lawyer, it is important to keep the following in mind:
Make sure you hire an expert – It is important to find a lawyer who specializes in bankruptcy. You should find out what percentage of a lawyer’s practice is comprised of bankruptcy and how many cases he has filed. It is best to avoid a “jack of all trades” type of lawyer.
You’ll get what you pay for – Of course you are already tight on money if you are filing for bankruptcy however it is important to keep the saying in mind: “You get what you pay for”. Don’t go with the least expensive lawyer because you may end up having to pay more money in the long run.
Make sure you will get detailed attention – Many law firms will run their clients through a bankruptcy mill resulting in lousy legal work, unhappy clients and wary judges and trustees. In order to spot a mill, check with your local bar association for recommendations on attorneys who specialize in bankruptcy. Most mills will not be on top of the networking which is a normal characteristic of a local bar association.
Last but not least, make sure you have a comfortable relationship with your lawyer – Picking a lawyer you are comfortable with is most important. If you don’t have a good feel about the attorney, find another one. Filing bankruptcy is an emotional roller coaster and you want to feel right about what your lawyer is doing for you.
Planning to build a home or remodel your existing home?
The Law Offices of Page, Lobo, Costales and Preston come across many construction cases where the contractor either does not have a license or the license he or she carries is out of date.
It is important to know how to hire a contractorwhen starting a construction project at your home. Here are some tips to choosing a contractor:
Make sure he or she is currently state licensed in your area. Has the construction company paid its employees legally and carry workers’ compensation, property damage and liability insurance? You should also find out how long he or she has been in business along with a list of references you can contact.
Does the contractor have a work crew or do they subcontract the work? Protect yourself from a mechanics lien by asking the contractor, subcontractors and suppliers for lien releases or waivers upon each payment.
Ask if the contractor can supply you with a fixed start and completion date included in a formal written agreement. If you aren’t normally onsite during the project it is a good idea to check in regularly to make sure everything is coming along.
Ask for an itemized price estimate from each potential contractor when getting bids. Examine each carefully paying attention to those that seem too high or too low. Lower bids may mean you will get a hasty job that won’t leave you with a quality finished product. Remember, in most cases you get what you pay for.
Ask the contractor for a schedule of the work from start to finish. If you want regular progress reports, ask for them in writing.
Don’t let your payments get ahead of the work. We recommend paying 10 percent down before they start the project. If it is a stable company they won’t need a large amount of money to pay for materials or overhead.
If you have questions about a mechaincs lien or construction issues, contact Jonathon Preston with Page, Lobo, Costales and Preston APC.
It’s no surprise when Christmas is. It comes the same time each year!
However, it always seems to sneak up on us when it comes to affording it financially. Christmas doesn’t have to be a holiday that buries you in more debt.
Page, Lobo, Costales and Preston APC would like to share some great tips to get your savings started now for Christmas:
Do you come across extra money? Whether it is finding spare change or shopping rebates, put it away into an envelope. If you go out to eat and your friend pays for a portion of the bill in cash and gives it to you, use that to put into your Christmas envelope as well.
Do you ever earn gift cards or receive them as gifts? Put those into your Christmas envelope as well! You can always re-gift them or exchange them for presents when it gets closer to Christmas.
Eliminate eating out one day of the week. Use the money you would spend on your lunch or dinner out towards your Christmas envelope.
Do you have extra stuff lying around the house? Sell it! Now is a great time to do some spring cleaning. Clean the clutter out of your home and sell them at a garage sale. If you have more quality stuff, sell it online through eBay.
Cut back on some of your utilities for a couple months. For example, if you cut back on your cable subscription for 2-3 months, put that extra savings into your Christmas envelope. It’s so nice out lately anyway, who wants to be inside watching TV?
Call your cell phone company to see if you can lower your bill. Do you have a landline? Cancel that and just use your cell phone.
Pay yourself daily on each transaction you make. For example, if you go to the grocery store and you spend $94.87, put the extra $5.13 into your Christmas savings envelope.
Budgeting is a great thing to do in both business and your personal life.
Do you budget at home? Setting a budget and managing it on a monthly basis is vital to staying in control of your finances.
Page, Lobo, Costales and Preston would like to share the top ten budgeting mistakes you don’t want to make:
Don’t forget to plan for yearly expenses – Usually we consider the monthly expenses but what about bigger ones like property taxes, annual insurance premiums and such. Divide the yearly total by 12 and make sure you are saving up enough each month for that yearly expense.
Don’t forget to plan for the unexpected – Emergencies will pop up. Your car breaks down, you have a leak in your home…there are many unforeseen circumstances that will come up. Set aside an emergency fund for times like this.
Don’t forget to look at pas expenses – Look at your past seasonal expenses. The Holidays are usually filled with extra expenses we don’t plan on. Save up for those times all throughout the year.
Don’t forget to contribute to savings – Treat your savings like a monthly expense. Don’t pay everything first then see if you have enough left over to stash away.
Don’t forget the small items – Eating out, trips to get coffee at Starbucks, picking up some chips at the gas station…these are all small expenses that add up quickly. Make your lunch at home and brew your coffee at home. You’ll be surprised how much you will end up saving.
Don’t forget to be flexible – If you have to trade different amounts for your different expense categories that is fine!
Don’t forget to write it down – Don’t just keep a budget in your head, put it on paper, in a spreadsheet or with online software.
Don’t be afraid to adjust your budget – If you didn’t stick to it last month, don’t drop it. Change it as needed and start out on your new month.
Don’t be unrealistic – Avoid setting unrealistically low spending limits then become discouraged when you don’t meet them. Give yourself a little “wiggle room” just in case. As you get more comfortable with your budget each month you’ll get a better idea of where to set your spending limit.
Don’t forget to treat yourself – Reward yourself once in a while. Go out to a nice dinner, buy something nice for yourself. You’ll appreciate these things much more since you have been doing such a great job sticking to your budget.