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Many debtors are surprised to learn that income to the bankruptcy court doesn't just include taxable income. Income can be defined different ways depending on which section of the bankruptcy code is involved.
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The new bankruptcy law, BAPCPA (”Bankruptcy Abuse Prevention and Consumer Protection Act”) requires that a debtor’s assets must be valued at “replacement cost.” In fact, if you meet with your attorney, he will give you a notice required by section 527(c) of the Bankruptcy Code, which probably explains valuation similar to this section from the [...]
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Whether or not you will be able to keep a house after filing for bankruptcy will depend on several factors.
Are you current on the mortgage?
If you are current on the mortgage you can continue to pay the secured debt in a Chapter 7 bankruptcy while getting rid of your unsecured debt such as credit card [...]
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One of the most enduring myths about the law is that spouses are legally responsible for each other’s debts — but it simply isn’t true, not even in a community property state. Why, then, do so many people seem to “know” this is so, when it’s just a myth?
The answer probably lies in the nature [...]
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If a relative dies owing money at the time of death, the debts are not inherited. According to North Carolina laws, and likely other states, those debts might have to be paid from property owned by the person who died, but if the deceased didn’t own property then the debts may have died with the [...]
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The meeting of creditors in a normal consumer Chapter 7 Bankruptcy is often the last thing that the debtor has to do. There is a debtor education course that has to be finished after the bankruptcy is filed, and it must be completed within 45 days of the meeting, but most debtors get it [...]
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Some persons considering filing a chapter 7 or chapter 13 bankruptcy case might be concerned about their level of income being inflated due to working overtime hours, or having a part-time job in addition to their main full-time job. The concern is that the heightened level of income might render the debtor ineligible for chapter 7 [...]
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Most clients come to see me not because they don’t want to pay their bills but because the bill collectors won’t quit calling them. If they qualify, I advise them to file a Chapter 7 bankruptcy for two primary reasons. First, the filing of the case imposes an automatic stay which stays any creditor from collecting [...]
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Debtors having trouble making monthly payments often consider conversion of their Chapter 13 case to a Chapter 7 case. In general, a Chapter 13 case can be coverted or dismissed at the debtors’ option. However, if the plan has been in operation for several years, the debtor may have acquired new or different assets that were [...]
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How is the monthly payment calculated in a chapter 13 bankruptcy case? For most, the monthly payment under a chapter 13 plan consists of what the debtor can afford to pay, after paying all of the monthly living expenses which are necessary to maintain a normal middle class type lifestyle.
If you thought chapter 13 involved a [...]
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The mortgage industry has insisted they could fix the mortgage problem. Then they convinced congress that they can fix the mortgage problem. Then the mortgage industry convinced congress that giving the Bankruptcy Judges the ability to modify first mortgages was unnecessary. Its been several months since this was a hot issue. It has now faded away [...]
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Can you refile your bankruptcy if it has been dismissed?
The answer is yes, you can refile your bankruptcy if it has been dismissed.
However, changes to the Bankruptcy Code that were in Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) can limit the relief that you receive when you refile.
When you file a bankruptcy one of the [...]
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Whether to allow a debtor to claim a deduction on the bankruptcy means test for the ownership expense of a car if there is no debt on it is quickly being resolved by the courts.
Today, the Eighth Circuit Court of Appeals concluded that the deduction would be allowed. The circuit court joins with the Fifth [...]
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Many clients face eviction from their homes after foreclosure. At first glance, even a bankruptcy filing might not help, since § 362(b)(22) states that there is no automatic stay of eviction where a pre-filing judgment for possession has been entered. Such clients are safe, however. The plain language of this section does not apply to [...]
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I recently published an article on RECAP, the Firefox extension that creates a public archive of federal court documents accessed from the PACER system and provided to PACER users without charge. Many federal courts use the CM/ECF electronic records system to store and manage case records. PACER is the fee for service system that provides [...]
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We all know that the automatic stay serves to stop almost all creditor attempts to collect a debt. The automatic stay has been discussed extensively on this blog.
But many times, creditors will stop sending monthly mortgage statements because they are under the impression that it violates the automatic stay to continue to send statements. In [...]
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When you file for bankruptcy you need to list all of the debts that you owe to you unsecured creditors. The potential consequences if you knowingly fail to list creditors was discussed by Boston Bankruptcy attorney Nicholas Ortiz.
So what happens if you simply forget to list a debt that you owe to an unsecured creditor?
The answer depends on a number of [...]
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Many debtors are unaware of “dragnet clauses,” only to find out the same after a bankruptcy is filed. Dragnet clauses are “cross-collateralization” clauses typically used by credit unions to secure other contractual obligations against collateral that didn’t exist when the original security agreement was created.
Dragnet clauses are most commonly seen in car loans by credit [...]
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It costs eight cents per page to look at “public” records in most bankruptcy courts. With the advent of CM/ECF, the electronic federal court system for managing and storing case files, the Administrative Office of the US Courts has made many of these records accessible to the public through the “Pay Per View” system described [...]
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The Bankruptcy Abuse Prevention Consumer Protection Act (BAPCPA) which went into effect on October 17, 2005, appears to be living up to its name with the changes to 11 USC 362. Indeed, for creditors who violate the automatic stay, there no longer appears to be a good faith exception due to new “consumer protections.”
Previous to [...]
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My friend and colleague, Brett Weiss, wrote a great post on converting a Chapter 13 bankruptcy to a Chapter 7 bankruptcy. He pointed out a number of good reasons to do it, and a number of benefits.
But what if you’re in a Chapter 7, and get behind in your home or car payments? Under those [...]
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Your Chapter 13 case is in trouble. The stay has been lifted on your house, or the plan payments are behind and the trustee is threatening to dismiss your case, or you’ve finally decided that the house isn’t worth the headaches you’re going through, and you just want out. What do you do?
One option is [...]
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When Congress passed the ‘new’ bankruptcy law in 2005, it included a provision that Debtors must prepare and file what is called the Means Test. It looks at all of your income from every source except Social Security benefits. If your income exceeds a certain amount (less allowed expenses) a presumption arises and you are not [...]
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The “means test” is complicated and, as is much of the new bankruptcy law, is interpreted in wildly different ways throughout the country. Don’t try to take the test on your own.
The means test has been justifiably criticized since the new bankruptcy law (”BAPCPA”) went into effect in 2005. In fact, the means test may well [...]
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With the grim economic times today, often people who had previously filed bankruptcy are finding that they are facing difficult financial issues today. The question is often asked, can I file bankruptcy today when I had filed a few years ago? As is often the case, the answer depends on very particular circumstances.
If you filed a chapter 7 case [...]
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Small business owners feel as though they and their business are one. Before a bankruptcy filing, we have to separate the business from those who operate the business to determine who needs to file.
This is most dramatic when the business is a separate legal entity, a corporation or an LLC. These entities are their own [...]
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Gathering records is an important part of preparing for a bankruptcy consultation. Your lawyer will rely on these records to determine if you qualify for bankruptcy relief.
Here is a common list of documents I ask my Rhode Island clients to bring to a bankruptcy consultation.
Federal Tax returns for the last two (2) years;
Personal bank account [...]
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This past November, I reported about a high profile bankruptcy case filed in the Northern District of Georgia, just outside Atlanta. State School Superintendent Kathy Cox and her husband, a homebuilder, filed for Chapter 7 bankruptcy. According to news reports the filing was triggered by over $3.5 million in losses incurred by John Cox’ failed [...]
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People are frightened by the thought of seeing a bankruptcy lawyer. This causes them to wait to the last minute to get advice and to get help. Sometimes people wait until it is too late for the right help. They continue to delay meeting with the bankruptcy lawyer. You should see a bankruptcy lawyer sooner [...]
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“How do you get paid?” is the question I’m asked most often at parties. After all, they say, if your clients don’t have any money, how can they pay you?
The answer depends on the details of a particular client’s case, but there are several ways I usually get paid.
1. You may have savings you haven’t [...]
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One of the things a bankruptcy attorney needs to know to properly advise a client is whether the client owes money on his or her vehicle(s). While going through the bankruptcy questionnaire with clients, I am frequently told the vehicle is paid for. But when I get to the question of whether the client owes a finance company, [...]
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When someone files bankruptcy they are normally required to appear at a hearing and testify about their case. The hearings is called a “Meeting of Creditors” or a 341 Meeting.
Some people are afraid to get bankruptcy help because they don’t want to go to this hearing, or they’re afraid of having to testify in public. [...]
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Reader’s Digest, founded in 1922 and America’s best selling consumer magazine, said Monday that it would be filing for Chapter 11 reorganization.
From a high of 18 million copies a month in the 1970’s, subscriptions had declined to less than 9 million. Reader’s Digest, which will continue to publish, plans to use Chapter 11 to cut [...]
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Often prospective clients ask whether their bankruptcy case will be reported in the local newspapers. Generally, the answer is “no,” your bankruptcy will not be reported.
Because folks have seen foreclosure notices listed in their local newspapers, they are concerned that, because bankruptcy is a legal proceeding, their bankruptcy case will also be reported. Foreclosure notices are [...]
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While attending a Texas advanced consumer bankruptcy seminar last week, I was surprised and amazed (I know, I should not have been) to learn that mortgage servicers consider the ability for a consumer to make their mortgage payments by ACH or EFT (electronic funds transfer) as a “Privilege”. This was in response to me stating that [...]
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Fear of debt creates tunnel vision. When our debt outweighs our income it is natural to focus on how little we have. The tunnel vision of debt leads to stress and anxiety without any light at the end of the tunnel. For many of my clients this vision prevents them from finding anything good in [...]
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Knowing your debt to income ratio, could help you make sounder financial decisions in the future. Your debt to income ratio is used by companies who are considering lending you money to determine if you are carrying too much debt in relation to your income. You can figure out your debt to income ratio rather [...]
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Save more money, spend it on your self, and stimulate your local economy. Here is how to do it.
Many people are in a credit card rut, paying minimum payments each month while the balance grows beyond control. Those fortunate to have jobs struggle paycheck to paycheck as credit cards gobble up take home pay. [...]
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Last year on this blog, my colleague Pam Stewart wrote a post that explains the emergency bankruptcy filing process. As Pam notes, situations do arise in which an individual needs to file bankruptcy immediately but does not have time to gather all of the documentation needed for a complete filing. An emergency filing allows a [...]
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Your car is worth a whole lot less than you owe on it, and you’re in a Chapter 7 bankruptcy. Is there a way to lower your loan balance?
In a Chapter 13, you may be able to do a cramdown, where you reduce the loan balance to the car’s value, but you can’t in a [...]
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After the paperwork for a bankruptcy is filed, the court will schedule a “meeting of creditors.” Often referred to as a 341 meeting (because it’s required under Section 341 of the bankruptcy code), this is nothing more than an opportunity for the trustee assigned to the case or your creditors to ask a few questions [...]
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At a 341 meeting the trustee may ask, “You have $80,000 in credit card debt, what do you have to show for it.” You may be thinking why is the trustee asking this question? Think of the trustee as a financial detective. The trustee has a duty to investigate your credit card charges.
The trustee [...]
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Filing bankruptcy doesn’t mean you have to give up your motorcycle, as long as the motorcycle payments would be considered a reasonable vehicle expense.
Occasionally clients tell me something like, “I was told if I filed bankruptcy, I would not be able to keep my motorcycle.” This is one of the many bankruptcy myths out there, [...]
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I just returned to Rhode Island from a weeks’ vacation in Maine. While away, I was bombarded by a whole new batch of debt settlement commercials.
Who wouldn’t want to settle their debt for pennies on the dollar? If you can avoid bankruptcy and still make all your debts disappear, what’s not to like? These debt-relief [...]
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The Ninth Circuit recently issued a very important decision in the case of In re Ransom, wherein it ruled that Debtors without vehicle debt can not deduct vehicle ownership expenses on Form B22 (the “means test”), a new form created under the new bankruptcy laws enacted in October, 2005. Such a ruling now creates a [...]
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You’ve fallen behind on your mortgage payments after your Chapter 13 case has been filed. The lender has filed a Motion to Lift Stay. Will you lose your house? Not necessarily, thanks to a Consent Order.
In many cases, the mortgage lender will give you one more change to get caught up. The way this is [...]
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If you are involved in a bankruptcy proceeding you may come across the terms CM, which is an abbreviation for the words Case Management, and ECF, which stands for Electronic Case Filing. CM/ECF is the computerized case filing and record management system used by the bankruptcy court to maintain and process bankruptcy court case records.
Beginning [...]
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Most chapter 13 debtors have probably been informed by their bankruptcy lawyers that the accuracy of their bankruptcy papers is critically important, that they shouldn’t incur new debt without the trustee’s permission, and that they can’t sell valuable property, such as their home, without court permission. Doing any of these could result in a finding of bad [...]
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In recent years, many clients have learned that they owe too much to file for Chapter 13 reorganization. Unlike Chapter 7 and Chapter 11, there are limits to how much you can owe for you to qualify for Chapter 13. Currently (the numbers are indexed for inflation) you cannot owe more than $336,900 in general [...]
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From time to time the financial situation of a person who has filed for a Chapter 13 bankruptcy changes for the worst and they need to convert their Chapter 13 bankruptcy to a Chapter 7 bankruptcy.
When a bankruptcy is converted from a Chapter 13 bankruptcy to a Chapter 7 bankruptcy the issue of whether or not [...]
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Note: The individuals listed are private parties, not government employees.
Timothy P. Branigan
14502 Greenview Drive, Suite 506
Laurel, MD 20708
Phone: (301)483-9118
Payment Address for Timothy P. Branigan:
P.O. Box 480, Memphis, TN 38101-0480
Nancy Spencer Grigsby
4201 Mitchellville Road, Suite 401
Bowie, MD 20716
Phone: (301)805-4700
Payment Address for Nancy Spencer Grigsby:
P.O. Box 853, Memphis, TN 38101-0853
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Case files in more than 200 Federal Courts are available over the web from any personal computer. The Oregon Bankruptcy court is participating in this program. PACER, the acronym for Public Access to Court Electronic Records, is the system the courts use to provide this access and it is available to everyone.
Congress has given the Federal [...]
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What come first, the chicken or the egg? The question is what comes first, Bankruptcy or Divorce. Frankly these are two things that can go hand in hand just like frank and beans or macaroni and cheese.
Seriously divorce is one of the main reason behind a bankruptcy filing. You previously had a family living under [...]
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Excise taxes are discharged in bankruptcy if the underlying transaction, which led to the tax, was more than three years before you file your bankruptcy case. Otherwise they are not affected by a bankruptcy case, although they still need to be listed.
Say you get a tax bill from your state, or municipality, for owning a motor [...]
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Note: The individuals listed are private parties, not government employees.
Ellen W. Cosby
P.O. Box 20016
Baltimore, MD 21284-0016
E-mail: ewc@ch13balt.com
Phone: (410) 825-5923
Fax: (410) 825-5904
Payment Address for Ellen Cosby:
P.O. Box 1838, Memphis, TN 38101-1838
Gerard R. Vetter
100 S. Charles Street, Suite 501
Tower II
Baltimore, MD 21201-2721
Phone: (410) 400-1333
Fax: (410) 400-1301
Payment Address for Gerard Vetter:
P.O. Box 580, Memphis, TN 38101-0580
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It is not uncommon for debtors in Chapter 13 to fall behind on their trustee, mortgage, or car payments due to circumstances outside of their control. In such situations, secured lenders will move for relief of stay, which is a motion to allow them to proceed with their normal remedies outside the jurisdiction of the [...]
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If you liked that post, then try these...Does Bankruptcy Cause Divorce? by Rachel Lynn Foley, Kansas City, MO, Bankruptcy AttorneyThe Chapter 13 Process-Part 10 by Douglas Jacobs, California Bankruptcy AttorneyHome Prices Down Again by Kurt O'Keefe, Attorney at Law
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Is your Certificate of Deposit protected if you file a bankruptcy case? Maybe. What else do you have, and are you using the federal or a state’s list of exemptions (protected assets)?
The federal list has special protected values for special assets, not including cd’s. It also has a wild card exemption, which you can apply [...]
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People file pro se bankruptcy cases all the time. Corporations and limited liability companies sometimes try to do this. Bad idea. Very bad idea. People can file pro se bankruptcy cases because they are flesh and blood people. On the other hand, corporations and limited liability companies are considered “persons” only to the extent that [...]
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Clients often worry that their boss might fire them if they file a bankruptcy case. But the Bankruptcy Code explicitly prohibits any employer from discriminating against a person in their employment because of their having filed for bankruptcy relief. Section 525 of the Bankruptcy Code is written in two parts. The first part explains that [...]
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Transferring property to your children to avoid probate can cause big problems if a child files bankruptcy or is otherwise unable to pay his debts.
There I was at the Ripley’s “Believe it or Not” museum in Myrtle Beach, South Carolina, when I came across a display of humorous tombstones. The one pictured above says, “If any [...]
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Note: The individuals listed are private parties, not government employees.
Merrill Cohen
7910 Woodmont Avenue, Suite 760
Bethesda, MD 20814
Phone: (301)881-8300
Steven H. Greenfeld
7910 Woodmont Avenue, Suite 760
Bethesda, MD 20814
Phone: (202)537-7050
Janet M. Nesse
1150 18th Street, Suite 800
Washington, DC 20036
Phone: (202)785-9100
Cheryl E. Rose
12154 Darnestwon Road, Box 623
Gaithersburg, MD 20878
Phone: (301)527-7789
Fax: (301)527-1233
Gary A. Rosen
One Church Street, Suite 802
Rockville, MD 20850
Phone: (301)251-0202
Roger [...]
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There are protected amounts for assets when one files bankruptcy, but that does not mean that a trustee will automatically seize and sell an asset having a value slightly over the protected amount.
Much depends on the region you file, the particular pressures on a trustee from Washington when you file, the type of asset, the [...]
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Note: The individuals listed are private parties, not government employees.
Monique D. Almy
1001 Pennsylvania Ave. NW
Washington, DC 20004
E-mail: malmytrustee@crowell.com
Phone: (202) 508-8749
Fax: (202) 628-5116
Marc H. Baer
455 Main Street
Reisterstown, MD 21211
E-mail: mbaer@waldmangrossfield.com
Phone: (443) 712-2529
Fax: (443) 712-2538
Joseph J. Bellinger
8171 Maple Lawn Blvd., Suite 200
Maple Lawn, MD 20759
E-mail: jbellinger@offitkurman.com
Phone: (443) 738-1515
Fax: (301) 575-0335
Mark J. Friedman
6225 Smith Avenue
Baltimore, MD 21209-3600
E-mail: mark.friedman@dlapiper.com
Phone: [...]
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retirement ira contributions protected exempted fraudulent bad faith good faith
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If you liked that post, then try these...How Do I Read A Credit Report? by Andy Miofsky, Illinois Bankruptcy AttorneyMotions To Lift Stay When Payments Are Current by Kent Anderson, Oregon Bankruptcy AttorneyRecent Borrowing Makes Bankruptcy Too Risky by Jonathan Ginsberg, Atlanta Bankruptcy Attorney
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Any person considering bankruptcy always wants to know what is going to happen to their “stuff”. This is an area of great concern and stress for anyone with financial difficulties. Unfortunately, there is usually not a blanket answer to this question.
Each state has different laws relating to what a person may keep as their property [...]
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The most common form of consumer bankruptcy, a Chapter 7 filing, takes about 90 days to complete. For each case filed, the court assigns a trustee and schedules a date for a meeting of creditors. This meeting occurs about 30 days into the process. (And it does NOT take place in a courtroom.)
At the meeting of creditors, the bankruptcy trustee [...]
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Bankruptcy is all about protecting you and your property from creditors. But do you really have to disclose ALL of your property in a Chapter 7 filing? Will anyone find out if you don’t?
Here is the short answer: YES.
In a typical Chapter 7 petition, a debtor will be asked no less than 10 times whether [...]
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Bankruptcy protects some property from creditors, and in North Carolina that protection is set to increase when the amount of residential home equity protected from creditors goes from from $18,500 per debtor to $35,000 per debtor. Gov. Perdue signed into law H.B. 1058, which becomes effective on December 1, 2009 to raise the NC homestead exemption.
Many people mistakenly think [...]
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The U.S. Court of Appeals for the First Circuit today affirmed in re Rudler, a case in which both the Bankruptcy Court and the Bankruptcy Appellate Panel for the First Circuit allowed a means test deduction for a car payment when then car was being surrendering in the course of the bankruptcy case. The [...]
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Just the other day I was asked can I file a medical bankruptcy? The answer is no. There is no such thing. You can file bankruptcy on your medical bills. However your bankruptcy must include every bill and everyone that you owe. You can not just file on the medical bills. Generally the medical bills will be discharged and [...]
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Can a house that has been foreclosed on be included in a Bankruptcy?
A foreclosure proceeding is used by a creditor to seize and sell a house on which the creditor holds a mortgage.
If you live in a State such as Louisiana that allows the creditor to get a deficiency judgment, and if the creditor did not get all of [...]
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I have so many clients tell me “I’m not behind on any of my bills.” or “I’ve never missed a payment.” When I ask them why are they seeking bankruptcy advice, they say, I have run out of credit. Further questioning reveals they have been taking cash advances from one credit card to pay another. [...]
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Filing bankruptcy usually doesn’t require a court appearance in front of a judge. It does, however, require the debtor to appear at a meeting in front of a trustee and be questioned about the paperwork filed in her case. If you file as a married couple, both spouses will have to appear. Your attorney gets [...]
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The phrase “Meeting of Creditors” strikes fear into most of my clients’ hearts. They hear these words and get a mental image of sitting in a large, darkened room with a spotlight in their face and their creditors in hooded robes surrounding them.
The reality? In virtually all cases, there’s nothing to worry about. In fact, [...]
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The Eastern District of North Carolina has created a uniform document production list. All debtors in chapter 7 cases are required to produce the documents that are listed below:
1) Tax Returns including the W-2s attached to the tax returns for the most recent year along with copies of any extensions filed.
2) Bank account statements including [...]
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A Bankruptcy Court garnishment can be as high as you want it to be. There is no limit on the amount a Court can take from your paycheck because the federal limit on paycheck garnishment does not apply to chapter 13 payments.
The amount of the garnishment is selected by the debtor, who submits a written [...]
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If you’re considering a chapter 7 bankruptcy filing to eliminate your debts, you may be wondering how the process works. For many filers, bankruptcy can be an overwhelming process, but understanding how bankruptcy works can make the process a bit less frightening.
Here are the 9 steps involved with filing Chapter 7 bankruptcy:
1. Meet with your lawyer. [...]
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On June 25, 2009, the Ninth Circuit Court of Appeals ruled that a Chapter 7 Trustee could not undo a highly unbalanced property distribution arising from a dissolution proceeding where judgment was entered in State Court. Such a ruling is significant in now providing more security to debtors that seek bankruptcy after divorce, and where [...]
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One of the most common questions for bankruptcy lawyers is how late can you be in paying a Chapter 13 bankruptcy plan.
The simple answer really is that there’s no grace period. The Bankruptcy code requires that payments begin no later than 30-days after the case is filed and that they continue to be made every [...]
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If you’ve been thinking about filing bankruptcy, you have probably wondered what your life will be like afterwards. Many consumers assume that, since your credit report will list a bankruptcy for ten years, they’ll be unable to obtain any kind of credit at all.
It is true that you’ll deal with the effects of bankruptcy for [...]