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Regular readers know my Kansas colleague Jill Michaux penned the 33 Bankruptcy Don’ts, things not to do before filing bankruptcy, and my friend from Oregon, Karen Oakes, followed up with her Paralegal’s Bankruptcy Top 10 list of things not to do to the office help. Well, here are a couple of important things the [...]
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Administrative discharge is not available according to the United States Bankruptcy Court for the Northern District of Ohio in the case of Donna Gregory v. U.S. Department of Education (April 1, 2008), which ruled that the requirement of undue hardship must always apply to the discharge of student loans in bankruptcy. The court then used [...]
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Recently, Jill Michaux discussed, the “33 Don’ts For Preparing To File Bankruptcy“. My staff reviewed the list and found it to be excellent, but then, they started discussing their own list, recognizing that the “33 Don’ts” involved mostly dealings with the attorney and consequences from the Court. The staff believes [...]
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If you have been researching the Chapter 13 process, you know that your Chapter 13 plan amounts to a three to five year repayment plan in which you send money to the Chapter 13 trustee, who then disburses that money to your creditors.
There are a number of things that can go wrong in a Chapter [...]
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Whether you qualify for a Chapter 7 or a Chapter 13 depends in large part to the Means Test. The Means Test uses a standard for the “Operating Cost” of a vehicle as set by the Internal Revenue Service (IRS). The IRS defines Operating Costs as “The operating costs include maintenance, repairs, insurance, fuel, registrations, [...]
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People contemplating a bankruptcy filing either already have bad credit or are about to. You may be perfect with your payments, but you’re running out of steam. Bankruptcy can improve your credit, since discharged debts must be listed as having a zero balance owed.
Bankrate.com published today about many different ways a bad credit score can [...]
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Section 523(a)(16) of the bankruptcy law, as amended by the 2005 Bankruptcy Reform Act, makes homeowners or condominium association fees nondischargeable, but only if the association fees arose after the date the bankruptcy was filed, and only for so long as the debtor has an ownership interest, or some other equitable interest, in the property. [...]
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Yes, Virginia, even the federal government must comply with your bankruptcy protections.
Congress waived sovereign immunity for the federal government - including our good friends at the Internal Revenue Service !! - in Section 106 of the Bankruptcy Code.
Well, not entirely. One can sue for actual damages but not punitive damages. In the First Circuit, covering [...]
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Ever get mail that you don’t recognize and immediately “file” it by tossing it in the trash? If it’s a notice from the bankruptcy court, that could be a costly mistake.
As a case in point, I offer you the story of Michelle Brown (not her real name). Michelle filed for Chapter 7 bankruptcy [...]
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In October, 2005, sweeping legislation changed the Bankruptcy Code. Most people rushed to file before these new laws went into effect, simply because they were unfamiliar with the new laws and thought they might not otherwise qualify after they took effect.
By the same token, many Bankrutpcy Attorneys entirely gave up their Bankruptcy Practices instead [...]
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Objecting to Claims: Standing 101
It happens every day. Thousands of proof of claims are filed in bankruptcy cases throughout America by debt buyers, yet most fail to contain any evidence they actually own the claims. These claims are then paid, despite the fact that such claims fail to comply with the Bankruptcy Rules, should have [...]
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Will a Chapter 7 debtor be denied a discharge because he includes a budget allocation for college tuition, rent and car payments for his two college aged children?
In a case decided by Judge Homer Drake of the Northern District of Georgia, the answer is “yes” - discharge denied. In the Walker case, Judge Drake [...]
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If you are the beneficiary of a trust, and are considering filing for bankruptcy, you might be wondering if you will lose your interest in the trust to your creditors. The answer to this question depends, first, on whether the trust is a “spendthrift trust” under the law of the state which governs the trust, [...]
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This Week’s business headlines publicize a drop in America’s Consumer Confidence Index to a historic low of 50.4. What, if anything, does this mean? In a nutshell, it means that consumers have become very pessimistic about economic conditions.
Compiled monthly by an independent research firm, the CCI is based on a survey of [...]
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I filed a Chapter 13 case for a debtor at 4:15 p.m. Thursday afternoon. At 11:15 a.m. Friday morning, less than 24 hours later and before I could notify the creditor of the bankruptcy filing, the creditor filed a Proof of Claim in the case with a copy of the purchase agreement.
It is not [...]
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The US Treasury is limited to 10 Years for the collection of tax once the tax has been assessed and becomes collectable. For technical details about this limitation on federal tax collection see my article “How Long Can The IRS Collect From Me?” on our sister website Debt Law Network. As I indicated in that [...]
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Collection efforts after bankruptcy are illegal. Pretty simple stuff, actually - if a debt is discharged, nobody can collect from you for ever and ever, amen.
The trick is to know what happens if a creditor does, in fact, try to collect after bankruptcy. Are they breaking the bankruptcy laws and, if so, what [...]
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People who have been known to their creditors by more than one name should pay special attention to using the correct name in a bankruptcy petition. The best choice will often be to list a primary name, and then list any other names the debtor has been known by to his or her creditors. The official bankruptcy [...]
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Bankruptcy Law Network blogger Kurt O’Keefe has been named member of the month by the National Association of Consumer Bankruptcy Attorneys. Each month NACBA selects a member whose “contributions over the years have been so outstanding that they deserve special recognition.”
O’Keefe is a solo practitioner in Detroit. He is the Michigan state chair [...]
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It should be no surprise to anyone that in the midst of skyrocketing food, gasoline, and heating costs, more and more people are falling behind on their utility payments. Yesterday, the Gannett News Service reported that electric and natural gas shutoffs are up at least 15 percent in many states compared to last year.
In [...]
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It happens weekly. A former client or other creditor contacts the attorney’s office to inquire whether the creditor was listed and discharged in the bankruptcy case.
Despite the fact that generally even unlisted creditors are still discharged, it can sometimes become very time consuming and problematic convincing the creditor that they were discharged despite improper [...]
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As with all legal questions, the answer is it depends. While the Supreme Court has ruled that you can not strip a second mortgage in a Chapter 7 proceeding, you still may be able to file a subsequent Chapter 13 case to achieve the goal.
So the issue really depends upon whether you can qualify [...]
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Everyone talks about trustees but what exactly does a trustee do? Is the trustee the judge? No. Is the trustee the jury? No. So what does the term trustee mean?
Wikipedia defines trustee as someone who holds property on behalf of a beneficiary. In the case of bankruptcy the trustee will [...]
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This past weekend, I had the opportunity to attend a bankruptcy liquidation sale. The case involved a business promoter in the Atlanta area who ended up in Chapter 7 when his business failed. This individual had apparently solicited hundreds of thousands of dollars from investors to create an on-line streaming video business.
As best [...]
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One of the changes in bankruptcy law that was in the 2005 Bankruptcy Act (”BAPCPA”) was to prevent debtors filing Chapter 13 from reducing the amount paid to car lenders on car loans taken out within 910 days of filing for bankruptcy. Because of this, more debtors are unable to keep those cars, [...]
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The nation’s best consumer bankruptcy lawyers put together a list of 33 Don’ts for Preparing to File Bankruptcy, compiled by my fellow Kansas attorney Jonathan Becker of Lawrence. Here is part 3, the final installment of the list.
Don’t omit or ‘save’ a credit card for after your bankruptcy.
Don’t fail to list debt to family [...]
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Analysts are calling it a foreclosure crisis on wheels. A large proportion of the roughly fifty million cars and light trucks financed in America in the last three years are under water, and people are increasingly walking away from these unaffordable loans, cheerfully surrendering vehicles worth thousand of dollars less than the balance owed on [...]
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Almost everyone who comes to see me wants to know about bankruptcy–what are their options, what will happen, and they usually want my advice. Recently I spoke to a young woman who had high balances on several credit card accounts. She told me a story that has become all too familiar, of an [...]
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Here is part 2 of a list of 33 don’ts for preparing to file bankruptcy compiled by Jonathan Becker after polling the listserv members of the National Association of Consumer Bankruptcy Attorneys.
Don’t fail to tell your attorney about your small business, sole proprietorship, partnership, LLC, LLP, LC, corporation, or hobby.
Don’t purchase a home shortly [...]
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Oh, if it were only that simple. I suppose in a perfect world, all you would need to do is come up with $1500 to $4500 and sign docs and it would be a done deal.
But unfortunately, there is a lot more involved to file Chapter 7 or Chapter 13 Bankruptcy than just paying [...]
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This is the second of two posts addressing the decision of Massachusetts Bankruptcy Judge Feeney in re Mati, 2008 WL 2389234 (Bkrtcy.D.Mass.2008). After addressing the first issue in the case concerning 401(k) deductions and bad faith, the Court moved on to the dispute over whether the debtor was entitled to the car “ownership” deduction [...]
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People in money trouble too often put off filing tax returns, which is a problem if they want a fresh start through bankruptcy. Taxes for which no returns have been filed are not dischargeable in bankruptcy. In Chapter 13, the debtor is required to get all unfiled returns on file before the plan [...]
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Massachusetts Bankruptcy Judge Feeney recently decided in re Mati, 2008 WL 2389234 (Bkrtcy.D.Mass.2008), a case addressing two important means testing issues for above-median income Chapter 13 debtors. This case is one of many now revealing how substantial the changes are to Chapter 13 practice after BAPCPA. Many of these changes are only now [...]
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Most of us get bombarded via e-mail, radio and TV by ads promising, “Avoid bankruptcy! Wipe out more than half of your credit card bills!” Sounds too good to be true. But do they really work? Well, sort of. But not quite in the way you might expect.
These programs typically work by telling you simply [...]
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My colleague Michael Doan, for California, and I, for Massachusetts, have written on the need for separate bankruptcy filings by same sex spouses because their marriage is not recognized under the federal Defense of Marriage Act. This federal treatment may well be worth the costs of separate filings. These filers, who together are above median income, might [...]
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I see it in almost every mortgage proof of claim. Junk fees by mortgage companies that only line their pocket books and rip you off. Dont let it happen to you simply because you don’t bother to read their proof of claim!
After filing a Chapter 13, creditors and debt scavengers will come out of [...]
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My colleague, Jonathan Becker from Lawrence, Kansas, recently polled the nation’s best consumer bankruptcy attorneys and compiled a list of 33 don’ts for preparing to file bankruptcy.
Of course, this is not an exclusive list of advice for preparing to file for bankruptcy relief. You should seek the advice of a local attorney in your [...]
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Recently, a debtor in my district was convicted of 28 counts of bankruptcy fraud, money laundering and other sundry felonies. He is facing 10 to 25 years in prison! All this for lying on his bankruptcy papers and to the trustee.
This debtor hired an excellent and very ethical attorney. He just didn’t tell the attorney [...]
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The crisis caused by dramatic changes in the home lending markets has claimed a new victim. This time it is not a bank or mortgage lender, it is instead a working class suburb of San Francisco that has filed for bankruptcy protection.
A recent post by Adam Levitin on the Credit Slips blog site calls attention to [...]
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Someone asked Georgia attorney Jonathan Ginsberg what to do with a debt that hadn’t been reaffirmed in his Chapter 7 bankruptcy case. The debtor appeared to be upset to learn that his attorney didn’t file a reaffirmation on his car loan. If the reaffirmation isn’t filed, the car might be [...]
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There are a number of debts that will survive a bankruptcy filing, whether Chapter 7 or Chapter 13 is filed.
Child support or alimony are priority debts and those debts survive bankruptcy.
Debts owed to the government, whether taxes, fines or restitution–Some taxes owed before filing are discharged; others are not. The rules for determining which kinds [...]
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(This is the second article in a continuing series examining the candidates’ thoughts and actions as we approach the coming election in November.)
The presumptive Democratic and Republican nominees’ positions on bankruptcy and credit reform are an important aspect of their fitness for the highest office in the country. What were some of their votes on [...]
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My colleague and friend, Wendell Sherk wrote a great comment on the illusion of picking an attorney based on what is charged for a “simple bankruptcy.” His post captures what every consumer bankruptcy attorney hears all the time: “How much will you charge for a simple case?”
The truth is that not all cases are simple. [...]
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This twist on an economic boondoggle came to the attention of one of my part time legal assistants, who also works as a volunteer substance abuse counselor to low-income people. If you look at the fine print concerning economic stimulus checks, it does mention that they will be subject to tax refund intercepts, including those [...]
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I practice in a struggling, small New England city. Some say it’s already dead. Springfield lost 5% of its population in the past seven years. In the previous decade, Springfield led the country in losing the highest percentage of its young adults (ages 18-34), at 28%. Second place was a distant 18%. The people leaving town [...]
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Barack Obama, the presumptive Democratic nominee for president, includes on his website a summary of his positions on bankruptcy and credit reform.
From his website:
Obama will reform our bankruptcy laws to protect working people, ban executive bonuses for bankrupt companies, and require disclosure of all pension investments.
Cap Outlandish Interest Rates on Payday Loans and Improve Disclosure: [...]
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On May 15, 2008, the California Supreme Court struck down a ban on Gay Marriages and ruled that the union of a Gay Couple in Matrimony will be recognized no differently than a heterosexual marriage. Starting June 17, 2008, gay couples can officially marry in California, even if they do not live there.
Moreover, all [...]
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Before Congress passed the “Bankruptcy Abuse Prevention and Consumer Protection Act” (BAPCPA) in 2005, dealing with car loans in Chapter 7 cases in most states was pretty simple—if you made your payments you could keep your car, and if you didn’t, even though the car finance company could repossess the car, you wouldn’t be personally [...]
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How would you like to eliminate all your credit card debt, all your car debt, and all your mortgage debt except the first mortgage, in 36 months? And what if you could do that by paying less than what you are currently paying now? Sound too good to be true? Well, it is true and [...]
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The Ninth Circuit issued its long awaited opinion on whether the debtor’s Chapter 13 payment is fixed by means test formula looking backward or the present income level in Schedule I. It’s the means test, said the circuit court.
“Projected disposable income ” is the product of the means test calculation in form B22C, [...]
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A new Florida law will make it virtually impossible for a homeowner to obtain an attorney to fight a foreclosure in state court or bankruptcy court. Pack your bags. Game over. Banks win.
The new Florida Statutes Section 501.1377, which becomes effective October 1st, is so outrageous that one can only assume it passed because none [...]
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When filing for bankruptcy one of the greatest expenses that I see for debtors is their cell phone bill. It is not unusual to see $100 to $150 monthly bill.
Trying to pry a cell phone out of a debtor’s hand is like trying to convince one of my Midwestern boys to give up their [...]
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The circumstances in which you used your credit card may bear on whether the card debt is dischargeable in bankruptcy. Section 523 of the Bankruptcy Code excludes from the scope of the discharge debt incurred by fraud. Let’s look at how fraud could be implicated when you swipe that plastic.
One species of credit card fraud [...]
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The National Association of Consumer Bankruptcy Attorneys held its 2008 annual convention in Hollywood CA to rave reviews from member attendees. By anecdotal accounts, this year’s program was one of the best.
Attorneys who are interested in experiencing an annual convention or learning about a specific topic of emerging bankruptcy law can order audio CDs [...]
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Reaffirmation in Chapter 7 bankruptcy is voluntary. If the creditor does not want to reaffirm, you have no right to force a reaffirmation. Under the BAPCPA changes to the Bankruptcy Code, you, as the debtor, are required to state your intention within 60 days of the 341 hearing. My colleague and fellow [...]
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Recently, a client of mine did just that: gave her car to her daughter a couple of days before filing bankruptcy. What’s worse is that she didn’t tell me about it until after the case was filed.
My office had already prepared the paperwork, and been able to exempt the car under appropriate state law. [...]
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Taking an appeal in a Chapter 13 bankruptcy case just took an interesting turn for debtors in the Midwest. In May, the Eighth Circuit Court of Appeals allowed a debtor’s objection to her own Chapter 13 plan to be heard on appeal. Sometimes judicial enlightenment comes in surprising and unusual developments.
Traditionally, courts of [...]
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Many people are under the mistaken impression that they qualify for Chapter 13, when in fact, they are actually over the debt limits. They simply add up all their secured debt and unsecured debt, without digging a little deeper to really ascertain whether such debt is actualy secured or unsecured.
Chapter 13 Eligability under the Bankruptcy [...]