Categories for Bankruptcy

There are many false beliefs when it comes to discharged debts.  Some believe that debts are “erased;” others believe that discharged debts are no longer legal obligations. Neither of these beliefs are accurate. In simple terms, a discharged debt means that the creditor is enjoined from collecting on that debt from the debtor. The bankruptcy discharge is a court injunction that protects the debtor, personally....

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Tell the Truth. Tell the Truth. Tell the Truth. The most important thing is to be completely transparent with your attorney. He is on your side and can only protect you if he knows absolutely everything about your income, debts, assets, etc. You swear to tell the truth in your bankruptcy paperwork – lies and omissions in the paperwork may be a crime. There are...

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The short answer is no. This is because while you are in bankruptcy you should not be incurring new debt without court permission. Most of the time a credit card will not issue a card to someone who is in an active bankruptcy case, because they do not want to violate the bankruptcy code and face sanctions from the bankruptcy court. Furthermore any cards that...

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Chapter 12 Bankruptcy

March 25, 2016

While many people are familiar with chapters, 7, 11, and 13 another chapter that is available is chapter 12. A chapter 12 is agricultural and is for “family farmers” or “family fishermen.” with “regular annual income.” The chapter 12 allows for farmers and fishermen to reorganize their debts in a reorganization plan to pay all or some of their debt. The chapter 12 plan is...

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Bankruptcy Filing Fees

March 23, 2016

When a debtor files for bankruptcy the court charges a filing fee to file the case. For a chapter 7 case the courts charge a $245 case filing fee, a $75 miscellaneous administrative fee, and a $15 trustee surcharge. These fees are paid to the clerk when the case is filed. Although with a chapter 7 case a debtor can request to pay the filing...

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What is a Chapter 7?

March 21, 2016

A chapter 7 is a liquidation chapter. This means that a chapter 7 Trustee can sell or liquidate property to pay off your creditors. A chapter 7 Trustee can only sell property that is non-exempt. Most Debtors will find that all of their property is exempt. Each state has its own exemption laws and some states opt into the federal exemptions. You should contact an...

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Credit Scores (Part 2)

March 19, 2016

In part two of our blog on credit scores, we will discuss how to rebuild your credit score after completing a bankruptcy. While the filing of bankruptcy places a negative report on your credit, rebuilding your credit rating after completing a bankruptcy is a manageable task. Once completing a bankruptcy, the debtor’s credit report will not reflect a positive credit history, which makes up the...

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Credit Scores (Part 1)

March 17, 2016

In this series on Credit Scores, I will discuss the various types of credit reports and the factors which influence your credit score. Credit reports consist of detailed information regarding an individual’s current and past financial obligations. Credit scores are essentially a numerical grade of the information contained within the credit report. These scores are used by credit card issuers, auto lenders, mortgage companies, and...

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A lot of my clients have not previously filed for bankruptcy. One of the most common questions is gaining an understanding of the general timeline and process of your typical Chapter 7 Bankruptcy. In general, Chapter 7 is the quickest bankruptcy to complete. The typical Chapter 7 case is completed within three to six months of the filing date. Keep in mind, before you can...

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Many clients I meet with are concerned that they will have to surrender their house and car if they file bankruptcy. As long as you can afford to maintain the payments on the mortgage and car note, you will not lose either in a bankruptcy filing. Most states provide exemptions for your house and car which allow additional protection for these assets. In addition, for...

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In the event you brought significant debt into your marriage which you incurred before you were married, certain states will consider that your separate debt, including Texas. If your spouse is not liable for your debt, such as it was incurred before the wedding, or they did not co-sign for the debt, an individual bankruptcy may be an option. Married debtors are able to file...

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In order to file Chapter 7 Bankruptcy, you will need to complete and pass a Means Test, which is filed as part of your bankruptcy paperwork with the Court. In general, the Means Test takes a six month look at your income and compares that with the median income for a similar family in your state. If you earn more than the median income, minus...

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Divorce and Bankruptcy

March 7, 2016

According to the American Psychological Association, about 40 to 50 percent of married couples in the United States get divorced. While getting divorced may not be the easiest process, if you happen to be involved in an active Bankruptcy case, it can add additional step to complete your divorce proceeding. The good news for those going through a divorce is that you can still complete...

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For those involved in a Bankruptcy, rest assured that your Bankruptcy case will not prevent you from getting married. For those involved in a Chapter 13 Bankruptcy however, your upcoming marriage may have an effect on your case. In a Chapter 13 Bankruptcy, you are required to pay your disposable income into your bankruptcy plan in order to pay back your creditors. The calculation to...

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Chapter 13 Discharge

February 26, 2016

The discharge is the overall of any consumer bankruptcy case.  This is occurs at the conclusion of the case and it is a permanent injunction that eliminates the dischargeable debts.  A chapter 13 debtor is entitled their discharge after they complete of their chapter 13 plan payments and so long as the debtor has: 1. certified that they have made all domestic support obligations (child support...

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Multiple Bankruptcy Filings

February 25, 2016

A debtor cannot re-file for bankruptcy for 180 days after their previous case was dismissed if the prior case was dismissed due to the debtor’s willful failure to appear before the court or comply with orders of the court. Additionally a debtor cannot re-file for bankruptcy for 180 days after their previous case was dismissed voluntarily after a secured creditor obtained an order for relief...

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In order to be eligible to file chapter 13 bankruptcy there are certain requirements that must be met. First of all only individuals can file for chapter 13. In other words corporations, partnerships, business and municipalities cannot file chapter 13, although there are other reorganization chapters which they can file. Although an individual who is self-employed or operating a business can file a personal bankruptcy....

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Most Facebookers (noun. A person using the social networking website Facebook) know that “friending” someone can enhance or soil a personal reputation. Companies use social media regularly as part of the hiring process. A person’s online reputation may be the difference between getting hired and losing a job opportunity. Recently it was discovered that Facebook patented technology that could allow lenders to use a borrower’s...

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Once upon a time, a college degree ensured a bright future. In fact, an entire previous generation taught their children to work hard, go to college, and stay away from trouble. That seemed to be a recipe for success. Maybe is still is, but it has become harder to find the right ingredients to make that recipe a success – especially when choosing the “right”...

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There are minimum ages that are milestones as you go through life. Typically, age 16 means a driver’s license; age 18 means you can vote; age 21 means you can purchase alcohol; age 35 means you can be elected President of the United States (like your kindergarten teacher predicted for you); and age 65 means you receive Social Security retirement benefits (or age 62, or...

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Note: This article is a continuation from Part One of the Simple Guide to Rebuilding Your Credit after Bankruptcy. Six Months after Discharge Apply for an unsecured credit card. An internet search will help in your research to find unsecured cards for individuals with a recent bankruptcy discharge. If you are declined, call the company immediately and request a reconsideration. Charge on this card monthly,...

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This is a simple guide for rebuilding your credit after a bankruptcy discharge. Recovering from the effects of bankruptcy takes time and attention. This guide suggests a basic 24 month timeline for rebuilding credit. T minus One Before your bankruptcy case is discharged, be sure to review your bankruptcy schedules and consider how your financial situation may have changed. It is very important to understand...

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In April of 2015, Green Tree Servicing agreed to pay a $63 million fine from the Consumer Financial Protection Bureau and the Federal Trade Commission for “mistreating borrowers” after failing to honor modifications for loans transferred from other servicers, demanding payments before providing loss mitigation options, delaying decisions on short sales, and harassing and threatening overdue borrowers. Green Tree agreed to pay $48 million in...

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In a strange case of irony, the Wall Street Journal recently reported that the federal bankruptcy courts around the country are sitting on money that belongs to others. The Wall Street Journal reports that Each bankruptcy court holds onto unclaimed money for several years before turning it over to the U.S. Treasury. The exact amount of homeless money is unclear. For all of the U.S....

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In general, there is no consequence to having a bank account during a bankruptcy case. However, there are a few “red flags” to observe and avoid: Do you owe the bank money? If you owe your bank money, it may try to freeze your account and collect the amount you owe. The 1995 US Supreme Court case of Citizens Bank of Maryland v. Strumpf, 516...

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During the recent Republican debate in Cleveland, Donald Trump stated that he has never filed a personal bankruptcy. However, his companies have filed for Chapter 11 bankruptcy protection four times in 18 years. How is this different from rapper Curtis Jackson, better known as “50 Cent,” who filed personal Chapter 11 bankruptcy earlier this summer? Jackson’s Chapter 11 bankruptcy is a personal reorganization bankruptcy. The...

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Lien Stripping Your Home

October 12, 2015

Bankruptcy Code sections are like little boxes. Sometimes, the facts of a bankruptcy case will fit neat and tidy into a box. Other times, judges, trustees, and attorneys disagree whether a case can fit inside a bankruptcy box. One example of this is lien stripping a home mortgage during a Chapter 13 bankruptcy case. The general rule allows a Chapter 13 debtor to strip-off an...

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Isn’t it common sense to read an important document before you sign it? Apparently the Consumer Finance Protection Bureau’s (CFPB) believes that millions of Americans are not reading (or understanding) important lender-required disclosures before they sign mortgage papers. To combat this, the CFPB is implementing new rules intended to eliminate redundancy and overlapping information, and help consumers better understand the loan closing process. The new...

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When an individual bankruptcy case is filed, the bankruptcy court sends notice to all creditors listed in the debtor’s petition. Receiving one of these notices generally prompts many questions. Below are a few of the most common questions and answers: Q.Will I get paid? A.This is the most common and the most important question to a creditor. Unfortunately, it is also the most complex. In...

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The U.S. Department of Education is closely monitoring 483 colleges over concerns of financial or federal compliance issues. The Department’s report, released June 1, 2015, includes three public institutions: Northern New Mexico College, Mesalands Community College in Tucumcari, N.M., and Copiah-Lincoln Community College in Mississippi. A complete list of these colleges is here. Colleges on the Department of Education’s list are subject to “Heightened Cash...

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According to Debt.org, approximately 60 percent of bankruptcy filers have incomes of less than $30,000. For many of these filers, even a small economic hiccup can cause financial ruin, such as reduced hours at work, a lawsuit, or medical expenses. But if you think that personal bankruptcy happens only to lower-income people, consider that many upper-income professionals are seeking bankruptcy protection. This is largely believed...

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The Wall Street Journal recently published a very thought-provoking piece in the wake of the U.S. Supreme Court decision over ObamaCare. The article entitled The Future of Personal Bankruptcy in a Post-Obamacare World hypothesizes that a mandatory health care system designed to give people access to affordable health insurance will reduce the number of personal bankruptcy cases. The article focuses on the research of Northeastern...

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When a House is Not a Home

September 4, 2015

Recently, a New Jersey bankruptcy court reminded us that home is where you hang your hat. But what makes a house a home will vary between bankruptcy courts. The case was In re Abraham, 2014 WL 3377370 (Bankr. D.N.J. July 10, 2014), a Chapter 7 case involving a claim under the federal homestead exemption. The facts in this case are a little unusual, but not...

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One of the main benefits of bankruptcy is the ability of the debtor to restructure his finances, and, in some cases, modify debts by reducing principle or changing terms, like the interest rate or length of the contract. The opportunity to modify an underwater home mortgage is obviously an enormous benefit for someone struggling to pay bills and keep his family home. Unfortunately, Congress made...

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During bankruptcy a debtor must apply legal exemptions to protect property from creditors. The Bankruptcy Code allows the debtor to choose between state and federal exemptions, but also permits states to “opt-out” and force their residents to apply state law exemptions. A married couple filing bankruptcy faces these same exemption law decisions. However, there is nothing in the Bankruptcy Code that forces a married couple...

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During an individual bankruptcy, all personal property must be identified and valued. Schedule B of the official bankruptcy forms specifically requires information for all “collections or collectibles.” Valuing collectibles during bankruptcy can get tricky, and properly valuing collectibles can mean the difference between keeping and losing the property. Some collections, like Beanie Babies or Precious Moments Figurines, have poor resale value. On the other hand,...

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Chapter 13 cases have a low rate of completion for many reasons. Most statistics show that less than half of all Chapter 13 cases filed receive a Chapter 13 discharge. Some Chapter 13 cases are voluntarily dismissed because the reason for filing has been resolved; other cases are converted because the debtor cannot keep up plan payments. The United States Supreme Court was recently asked...

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Debtors commonly ask, “Will the trustee come to my home?” The quick answer is “No.” Well, that’s the correct answer almost always. Just like every other “certain” rule in bankruptcy, there are exceptions. Section 704(a) of the Bankruptcy Code directs the bankruptcy trustee to “collect and reduce to money the property of the estate for which such trustee serves.” Sometimes that duty requires the trustee...

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As reported by the Wall Street Journal, there is a growing trend among bankruptcy trustees to recover college tuition paid by bankruptcy debtors on behalf of their children. Under the U.S. Bankruptcy Code, a trustee can sue to take back money that a bankrupt person spent several years before filing for protection if the trustee finds that the person didn’t get “reasonably equivalent value” for...

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Most bankruptcy cases are comprised of different debt issues between the debtor and several creditors – all who are competing to get at the debtor’s limited resources. During the course of the case, a party may ask for the bankruptcy court to take action to alter the legal status or relationship of one or more parties. For instance, a party may ask the court: To...

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