Categories for Bankruptcy

Fresh Start on a New Year

December 28, 2011

The first few months of the year are a busy time for bankruptcy attorneys. There are two reasons for this: first. First, it is the start of a new year and a good time for a change. The holiday season has passed and families begin making plans for the future. When you take a look at your finances and an ugly pile of unpaid bills...

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There are many myths surrounding bankruptcy. Fortunately, these myths can be quickly dispelled during a free consultation with an experienced bankruptcy attorney. One of the most serious myths is that an individual with a history of bankruptcy cannot qualify for a home loan. This myth can prevent someone deep in debt from obtaining needed relief. The truth is that while banks hate bankruptcy, they love...

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Debt Settlement and Your Taxes

December 23, 2011

Debt settlement ads are very attractive to individuals struggling with debt. The promise is to reach an agreement you can afford to pay. The debtor agrees to pay a percentage of the debt (usually in a lump sum), and the creditor agrees to release the remaining obligation. Sounds simple, right? Unfortunately, many times the debtor will receive a nasty surprise in the mail: an IRS...

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The answer is, “Yes. . .but.” Be honest: As a bankruptcy debtor you are required to name all creditors and the amount owed as of the day your bankruptcy case is filed. These creditors are sent notice of your case directly from the bankruptcy court. The flip side of this is that if you do not have a balance on a credit card, you do...

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Lifting the Automatic Stay

December 19, 2011

The bankruptcy automatic stay is an enormously broad and powerful legal protection. The stay is a temporary injunction that prohibits creditors from proceeding with collection actions against the debtor during the bankruptcy case. The bankruptcy debtor is entitled to this protection automatically from the moment the case is filed. Creditors are “stayed” (stopped) from collecting until either the bankruptcy court modifies this injunction, or the...

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When an individual chooses to file a Chapter 13 bankruptcy, debts are repaid over three to five years. The debtor pays unsecured creditors (e.g. medical bills, credit cards, etc.) whatever he or she can afford during this time, although many debtors end up paying nothing to unsecured creditors. At the end of the case, any remaining unsecured debt is discharged. The debtor can also pay...

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Who hasn’t fantasized about winning the lottery when you are cash strapped? It seems that winning the lottery would solve all of your financial problems. Not so fast. A March 2010 study by economists at the University of Kentucky, University of Pittsburgh, and Vanderbilt University suggests that winning the lottery does not reduce the likelihood of a future bankruptcy. The study examined data from 35,000...

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Nuns in Bankruptcy Court

December 12, 2011

What an unusual headline: “More Nuns in Bankruptcy Court.” That was the news story on Senior Housing News, a website that reports on the senior housing industry. This story, which was also reported on by Business Week, concerns Clare Oaks, a retirement community in a Chicago suburb. Clare Oaks filed for Chapter 11 bankruptcy protection to restructure its debts. What makes the story newsworthy is...

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The bankruptcy laws are confusing and complicated. Fortunately Congress and the US Supreme Court have given us a guidepost by stating that the bankruptcy laws exist to help debtors who are poor and honest. The bankruptcy trustee will investigate your case to determine whether you are both poor and honest. Excess money or equity in property can be taken to pay creditors, and efforts to...

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It is no secret that creditors want to be paid. Perhaps in a perfect world every debt would be paid in full and on time. Unfortunately, life happens and sometimes individuals are not able to pay their debts. Creditors are aware of this and try to protect themselves with binding contracts and agreements. One clause that regularly appears is the “bankruptcy waiver.” The debtor agrees...

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Foreclosure is always ugly business, but public complaints from homeowners alleging sloppy research, unethical filings, and outright lies, have made law firms that specialize in foreclosure especially villainous in the public eye. While many foreclosure firms may conduct their work with the honesty and diligence that is expected when practicing law, there are some that are less than, well, “sympathetic” to homeowners experiencing financial difficulty....

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Some unscrupulous non-attorneys take advantage of the poorest and most vulnerable by offering bankruptcy petition preparation services at a discount rate. Maybe you have seen their ads in free community newspapers. These services offer to prepare your bankruptcy petition and avoid the “high cost” of an attorney. Sounds great, right? Petition preparers are restricted by federal law to the level of a typing service. Preparers...

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The United States Bankruptcy Code is comprised of several different chapters. Some chapters deal with administrative matters. Other chapters provide specific guidance on how a case must proceed. Chapter 13, a repayment bankruptcy, is reserved for debtors who are “natural persons,” as opposed to businesses or corporations. Businesses and individuals can file Chapter 7, a liquidation bankruptcy, but only individuals can receive a Chapter 7...

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Can you get evicted for declaring bankruptcy?  This is a tricky question and depends on the individual facts of your case.If you file a Chapter 7 and are not behind in your rent payments, then the general answer is, “No.” Filing a bankruptcy case does not breach or terminate the lease agreement, so the landlord cannot evict simply because you seek bankruptcy protection. In a Chapter...

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Many homeowners unable to pay their monthly mortgage face several difficult decisions. The options for dealing with this issue generally boil down to the following: sell, modify the mortgage, walk away, or rent the property out. In some cases renting the property to a tenant may avoid foreclosure and allow you to generate some rental income. For mortgage and bankruptcy purposes, investment property is treated...

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It is heartbreaking to meet older Americans who are struggling to pay utility bills, to buy needed medicine, or even unable to buy food. In some cases the elderly will forego these necessities to pay credit card debt from their modest, fixed incomes. It is often the adult children that discover the struggles of their parents and suggest speaking with a bankruptcy attorney. Discussing a...

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One of Ben Franklin’s most famous quotes goes, “”‘In this world nothing can be said to be certain, except death and taxes.” U.S. taxpayers are taxed for so many transactions. One of the lesser-known taxes is the “cancellation of debt” tax. Many consumers who successfully resolve their debts for “pennies on the dollar” receive a nasty surprise at the end of the tax year. They...

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When a bankruptcy case is filed the individual debtor announces his or her intent to proceed under Chapter 7, 11, or 13 of the federal Bankruptcy Code. Each bankruptcy chapter has its own advantages and challenges. During some cases, the debtor’s circumstances may change and another bankruptcy chapter becomes more beneficial. In these cases the debtor may be able to convert the bankruptcy case to...

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Before starting your holiday shopping, take a moment and view some sage advice from a “consumer expert:” http://www.nbc.com/saturday-night-live/video/dont-buy-stuff/27169/ Sure, it’s a funny video, but only because we are laughing at ourselves! Of course you shouldn’t buy stuff you can’t afford. Bad things can happen when you abuse credit, especially if you have over-extended your finances. This holiday season layaway is making a comeback as a...

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Bankruptcy Jokes in Good Fun

November 14, 2011

Filing bankruptcy is serious business, but it’s not the end of the world. It is always good to have a positive perspective on things, and that includes the bankruptcy process. With this in mind, below are a few light hearted jokes about bankruptcy: “If you don’t pay your exorcist, you can get re-possessed.” “Due to the slumping economy, Six Flags is filing for Chapter 11...

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Recently the commissioners of Jefferson County, Alabama, voted to file the largest Chapter 9 bankruptcy in history. The New York Times reports that the county is “roughly $4 billion” in debt. Jefferson County’s financial trouble stems from poor attempts to finance the court-ordered rebuilding of its out of date sewer system. Jefferson County is Alabama’s most populous county and home to the city of Birmingham....

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EBay is an online auction website where people and businesses buy and sell goods. You probably already know that. What you may not know is how EBay can help you during your bankruptcy. First, EBay can help you adequately value your household property. The bankruptcy laws require that the debtor account for all personal property and make a good faith effort to accurately provide a...

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The first step in assessing your personal finances is to obtain a copy of your credit report. Your credit report will provide several key pieces of information that will help you develop a clear picture of your financial condition. A credit report tells you: (1) who you owe; (2) how much you owe; and (3) whether you have missed payments to creditors. Your credit report...

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Bankruptcy attorneys are good at hyping the bankruptcy discharge. Terms like “Erase Your Debts!” and “Start Fresh!” abound in consumer bankruptcy advertising. You may know that at the end of your bankruptcy case the court will enter an order discharging certain debts. But what exactly happens to debts that are discharged? The bankruptcy discharge does not “erase” or “eliminate” the debt. The discharge is a...

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Corporate Knights, a Canada-based sustainability-focused media firm, publishes a unique list every year that predicts the world’s most sustainable large corporations. Started in 2005, the Global 100 Most Sustainable Corporations in the World is a list of publicly traded companies that, based on research and analysis, are best equipped to manage the environmental, social and governance (ESG) risks and opportunities they face. The idea is...

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Fewer things can throw your world upside down like having your bank account frozen. A bank garnishment or seizure is usually the result of a creditor attempting to collect after a court has issued a judgment against you. The court orders the bank to freeze your account and turn over its proceeds to the judgment creditor. The order is usually timed by the creditor’s attorney...

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Chapter 13 and The HOA

October 31, 2011

Purchasing a home is for many the realization of the American Dream. Over the past few decades the Home Owners Association has become the double-edged sword of the American Dream. On the one hand, HOAs are great. They help ensure high property values by making sure that everyone maintains their home and do not create eyesores. On the other hand they can be beasts of...

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President Obama has announced a plan that seeks to lessen the burden of paying back student loans. The plan calls for lowering the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent for eligible borrowers. This plan goes into effect in 2012 and any remaining debt would be forgiven after 20 years. The White House said about 1.6...

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Automatic payments are a convenient way to pay your bills. An automatic payment is an arrangement for a specific amount of money to go from your bank account to the recipient’s bank account. Automatic payments are useful to pay monthly bills that do not change, like a monthly car or mortgage payment. A direct debit is an agreement that the recipient can take money out...

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The U.S. Bankruptcy Courts have increased the fee for filing bankruptcy by $7. Effective November 1, 2011, the filing fee for Chapter 7 will increase from $299 to $306; the Chapter 13 bankruptcy filing fee will increase from $274 to $281; and the Chapter 11 filing fee will increase from $1,039 to $1,046. As part of the judiciary branch of federal government of the United...

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Even in today’s specialized legal world, there are still some “general practice” attorneys who work in many different areas of the law. A general practice attorney may represent clients in family law like divorces with little or no property, minor criminal issues, small land disputes, small probate estates, low dollar personal injury cases, and the like. While a general practice attorney can successfully represent clients...

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Many American families rely on two incomes to pay the monthly bills and set a little aside as savings. When one income is unexpectedly reduced or eliminated, the family is thrust immediately into a crisis mode. Often there is not enough money to pay all of the family bills, so touch choices must be made. The first thing to do is to be realistic and...

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September foreclosure filings fell 38% from one year ago, according to information released by RealtyTrac.com. This may seem like good news, but there is reason to believe that the foreclosure rate may soon increase. First, the foreclosure process came under attack during the past year prompting many banks to slow or temporarily stop foreclosure proceedings. Banks and mortgage servicers have taken corrective actions over the...

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The ancient world has many stories of the firebird, or phoenix. The phoenix is mythical bird of great beauty that lives a very long time. At the end of its life the phoenix builds a nest and then self-combusts, burning until it and the nest are reduced to ashes. Then, from the ashes arises a new, young phoenix, ready for a fresh start. Bankruptcy can...

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The holiday season is fast approaching, so it is important to start making wise financial decisions if you are considering bankruptcy. Below are three areas that individuals can create problems just before filing bankruptcy. By avoiding these activities during the holidays, you can avoid trouble and make all your seasons bright! First, avoid overspending. Financial problems can create mental and emotional stress which is only...

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Massachusetts Attorney General Martha Coakley has announced that her office is preparing to file lawsuits against big banks that engaged in unlawful foreclosures. Massachusetts is the latest state to proceed with litigation, despite on-going negotiations between big banks and state and federal representatives to resolve allegations of unlawful foreclosure practices. Banks are accused of cutting corners and unlawfully rushing through foreclosure paperwork. Federal and state...

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The Washington Post recently reported that a Southern California debt collection firm has been shut down by the Federal Trade Commission for violating debtor harassment laws. What makes this story especially newsworthy is the outrageous accusations against the collection company, including threats against a family pet and digging up a corpse! The FTC halted operations and froze the assets of a debt collection business that...

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Bankruptcy’s Means Test

October 5, 2011

In 2005, Congress changed the Bankruptcy Code and added a means test to prevent wealthy debtors from filing Chapter 7 Bankruptcy. The means test is a calculation designed to identify debtors who can afford to pay some of their unsecured debts (for instance, credit card debt) and encourage repayment of these debts through a Chapter 13 repayment plan. The test is composed of two parts:...

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A Chapter 13 bankruptcy case is primarily used to repay all or some of a person’s debts. It is also known as a debt adjustment case, or a “wage earner’s plan.” Chapter 13 can stop a foreclosure or repossession and allow the individual time to make payments over three to five years, often even over the objection of a creditor. If you are behind on...

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The Banking Empire Strikes Back

September 30, 2011

Every time you use your debit card to pay for purchases, the merchant must pay a “swipe fee” to the card issuing bank. The old formula averaged about 1.14 percent of the purchase price, and netted U.S. banks billions in fees. As of October 1, 2011, these fees have been dramatically cut by a new law contained in the Dodd-Frank Act. Now swipe fees are...

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