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A change in the Median Family Income used to determine eligibility to file a bankruptcy changes on November 1, 2009.
The Median Family Income for Louisiana beginning November 1, 2009 is as follows:
One Person: $37,464.00
Two Persons: $48,287.00
Three Persons: $53,461.00
Four Persons: $66,256.00
For each additional person in the household and additional $6,900.00 is allowed.
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Sections 707(b)(2) and 1325(b) of the bankruptcy code allow a chapter 7 or chapter 13 debtor to claim an expense for charitable contributions, including tithing to a religious organization. This has the possible effect of allowing a debtor to qualify more easily for chapter 7, or allowing a chapter 13 debtor to pay less money [...]
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Refinancing can be a fraudulent transfer in bankruptcy
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A Chapter 13 is a bankruptcy reorganization for individuals–a payment plan, in other words. The bankruptcy court appoints a trustee (there are standing trustees who serve that function in each district) and the trustee collects payments from debtors, and distributes that money to creditors. So, how does the Chapter 13 trustee get paid?
The Chapter 13 [...]
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Rhode Island Bankruptcy Court gives key support to certain mortgage modifications.
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Be sure to tell the truth, the whole truth and nothing but, when it comes to advising your attorney about your financial picture.
When meeting or speaking with your attorney you will often be asked a number of questions. Each question asked by your attorney, is being asked because it is relevant to your bankruptcy case, [...]
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In Chapter 13, if you want to retain your vehicle, you cannot alter the principle amount owed on the vehicle if you bought it within 910 days of the filing of the bankruptcy petition. This is notoriously known as the “hanging paragraph” of Bankruptcy Code § 1325(a).
However, as Jacksonville Chapter 11 attorney Brett Mearkle explains, [...]
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There really are few reasons which are good enough to justify rescheduling a bankruptcy meeting of creditors (or section 341(a) meeting). After all, the bankruptcy filing amounts to “making a federal case out of things,” and it just doesn’t seem right for the debtor to fail to make room in his or her schedule to [...]
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Bankruptcy relief accomplishes three main goals: i) for the debtor, provides the necessary “breathing room” to propose a debt adjustment plan or reorganization plan; ii) for the debtor’s creditors, ensuring property of the estate (which includes wages earned post-petition) is distributed in accordance with priorities set forth under the Bankruptcy Code; and iii) preservation and [...]
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If you are in a Chapter 13 Plan in the Eastern District of Louisiana, which is the Bankruptcy Court for the Greater New Orleans area, the mailing address for the mailing of your Chapter 13 Plan payments has changed.
You should now send your Chapter 13 Plan payments to:
S. J. Beaulieu, Jr., Chapter 13 Trustee, P.O. Box 113, [...]
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The point of filing a bankruptcy case is to get a discharge of your debts. The deal is simple. An honest debtor gets a fresh start. The price of the bargain? You have to let the trustee have all of your “non-exempt” assets. That means you have to tell the trustee about everything you have.
If [...]
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Bankruptcy lawyers can’t help but pay special attention to TV or radio ads aired on behalf of so-called “debt settlement” companies. Aside from the fact that such firms have frequently been the subject of federal or state regulatory investigations, their ads are often filled with misleading or questionable claims.
Here are some quotes from ads recently aired [...]
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Previously, I discussed how one change to Chapter 11 of the Bankruptcy Code opened up the door for middle-class consumers to take advantage of the code in a way traditionally reserved only for the big boys.
Honestly, I am still a neophyte in this realm of bankruptcy, but I have the good fortune to work with [...]
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We all handle medical problems differently. Go to any Emergency Room and you may wonder why the guy experiencing chest pains for the past week didn’t come in earlier and why the kid with the splinter is there at all.
Financial problems are the same. Some delay getting financial counsel, while others are pro-active and want [...]
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Wow, my previous post on Individual Chapter 11 cases lit up my email! Well, I can understand the interest. How is Chapter 11 better than Chapter 13, and how could a Chapter 11 bankruptcy possibly be cheaper than a Chapter 13?
According to Chapter 11 attorney Brett Mearkle, the first major difference between an Individual Chapter [...]
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Oregon residents will be affected by the new means test/median income numbers announced by the United States Trustee Program Department of Justice. The numbers are adjusted periodically by the U.S. Trustee Program and generally have a negative impact on those wishing to file a Chapter 7 bankruptcy.
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Usually, if a bankruptcy is necessary for one spouse, both spouses will file. Sometimes only one does — does it matter? What happens?This begins a 10-part series on some of the issues when only one spouse files. Issues to be covered include:
Must the non-filing spouse’s information be disclosed?
What if my spouse’s assets are separate — [...]
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Absolutely not! Many people have expressed concern that if a judgment is entered against them in state (or federal) court, then they are stuck with that particular debt. In most instances, this is simply not the case.
To understand what occurs, it is helpful to know how a judgment works against you. First, when a court enters [...]
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Can I keep one of my credit cards when I file for bankruptcy?
A common question heard by bankruptcy attorneys and a common temptation.
And understandable!
In today’s world, it is almost impossible to rent a car or reserve a hotel room without a credit card.
Sure, you can use your debit card, but many hotels and rental car [...]
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Although it has been in effect for several years, the median income/means test provisions of the Bankruptcy Code continue to confuse potential bankruptcy filers.
In my Atlanta, Georgia bankruptcy practice, I regularly get questions from new clients about the two “budgets” that are filed in Chapter 7 and Chapter 13 cases. The first “budget” is the [...]
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On October 1, 2009, the Ninth Circuit Court of Appeals issued its decision in Sternberg v. Johnston, No. 07-16870 wherein it affirmed a stay violation under 11 USC 362, yet held that attorney fees were only recoverable related to enforcing the automatic stay and remedying the stay violation, and not in the litigation of damages. In [...]
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attorney client privilege in bankruptcy applies
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In my 17 years of practicing bankruptcy law, I have never been as excited by anything as the development of the individual Chapter 11 case.
Traditionally, Chapter 13 has been used for personal reorganizations while Chapter 11 has been reserved for more complex corporate reorganizations. However, a small handful of sophisticated bankruptcy lawyers, like Brett Mearkle [...]
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This question comes up often in a bankruptcy lawyer’s office, and each time it does the answer is nearly always the same: no.
Of course, this question could just as easily be asked the other way, should the husband refrain from joining in his wife’s bankruptcy? The question is based on the perception that the family [...]
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As you may know the Bankruptcy Code provides that Chapter 13 plans must last at least three years but no more than five years. As a practical matter, most of the Chapter 13 plans I file in my Atlanta area bankruptcy practice end up as five year plans (this is because the disposable income calculations [...]
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If you are sitting in jail wondering if you can file bankruptcy then your search is over. The answer is yes if you otherwise qualify for bankruptcy relief under the code. Just because you are sitting behind bars does not prevent you from accessing the Bankruptcy Court. Depending of where you are located will depend [...]
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You just filed a bankruptcy. You thought everything was under control. Now you got a letter from the bankruptcy court. Inside that letter is a notice from the court. This notice contains all sorts of important things and you should read it.
What is in the notice? If you file a Chapter 7 Bankruptcy the notice [...]
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The law that defines what you can keep despite filing bankruptcy is found in law books, you’d think. There are two alternate sets of California exemptions in the Code of Civil Procedure. The state law exemptions, for instance, permit the debtor to keep $2550 in equity in vehicles, while the California bankruptcy exemptions allow $3300.
But [...]
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Most likely, your bankruptcy lawyer didn’t screw up. You see, even after getting a discharge in bankruptcy, it is possible that creditors will STILL harass you. However, before you get mad at your bankruptcy lawyer, understand its probably not his/her fault.
This may come as a surprise, but sometimes creditors simply ignore the fact that a [...]
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Lawyers have a saying about trying a case: Put the skunk on the table. It means if you’ve got something really bad going on in your case, it’s best to just deal with it. Tell the judge or jury before the other side does so you can minimize the damage.
It’s really no different with [...]
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When filing bankruptcy, a client’s first question often involves whether or not they can keep things they own, like their home, their car, or their 401(k).
These questions are important, and the answer to the question is two-fold:
1. Is there a lien against the property?
2. If no lien exists, what Bankruptcy Exemptions are available?
If there is [...]
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frequently asked bankruptcy questions
bankruptcy eligibility test changes November 1, 2009
converting from chapter 13 to chapter 7
I don’t qualify for chapter 13
chapter 13 may be your best option
video: the six chapters of bankruptcy
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California Homestead Amounts To Increase
Governor Schwarzenegger signed into law new legislation that raises the amounts that can be claimed as a homestead in California. The law, Assembly Bill 1046 is one of several new pieces of California legislation aimed at protecting homeowners.
Previously, the equity in your home was exempt from execution or in a bankruptcy [...]
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Recently I posted a Blog on the unfavorable In re Martinez decision recently handed down by the Ninth Circuit BAP on October 5, 2009. Well, the Ninth Circuit BAP did it again that same day in another case with a slightly different twist in the Smith matter.
The BAP essentially issued almost the same opinion, but applied [...]
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According to the United States Department of Justice, U.S. Trustee program, Americans make less money today than eight months ago.
In order for bankruptcy practitioners to determine whether a person or couple qualifies for Chapter 7, we look to the latest median income figures periodically published by the U.S. Trustee. Normally, and as anyone would expect, [...]
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Americans tend to move a lot. When the economy is in distress, folks often move out of state in search of work or lower cost of living. If you filed bankruptcy, do you have to stay put while the case is going on? Does your case have to move to another court?
The answer is pretty [...]
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On October 5th, 2009, the Ninth Circuit Bankruptcy Appellate Panel (BAP) published its decision in In re Martinez, wherein it concluded that debtors who strip junior liens off mortgages are not entitled to deduct those payments from the chapter 13 projected disposable income test. While the decision was ordered published, the 3 judge panel disagreed with each [...]
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Judge Long of the Massachusetts Land Court recently reaffirmed his groundbreaking May decision (Ibanez) invalidating a foreclosure sale due to a lack of properly-recorded proof of assignment. The assignment issue boiled down to this. Due to the bundling of mortgages for sale and trading on Wall Street, mortgages have been transfered more and [...]
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One day this week, I got so angry at my potential clients. I did not express this anger out loud, but I did want to reach across my desk and say YOU SHOULD HAVE COME HERE WEEKS OR MONTHS AGO. Three new clients, and all three of them, would have had much better options had [...]
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What is bankruptcy? What a short video for an overview of bankruptcy.
FAQ: bankruptcy basics
Frequently asked questions about bankruptcy – part one
Frequently asked questions about bankruptcy – part two
Frequently asked questions about bankruptcy – part three
Frequently asked questions about bankruptcy – part four
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Chapter 13 bankruptcy provides a powerful tool — You can provide for special treatment of co-signed debt, allowing it to be paid more than other similar creditors. In this way, you can “protect” your co-signer from having to repay part or all of the debt you incurred with their help.
But what happens when you owe [...]
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Chapter 13 Plans must be proposed to last a minimum of 36 months, and a maximum of 60 months. Three to five years is a long time!
And a lot can change during that time.
As plans are proposed and confirmed by the court based upon your set of circumstances at that time, it is possible that [...]
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Sometimes the bank forgets to file the paperwork to put a lien on a car’s certificate of title when they make a car loan. Does that mean you don’t owe the money? Or if you file bankruptcy, you get the car for free?
Usually it’s not so simple. When you take out a loan on a [...]
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Must You Have A Lawyer To File Bankruptcy?
Certainly not! You have the absolute right to represent yourself. But, the better question is: “Should you have a lawyer to file bankruptcy?”
Let’s make a list of the pros and cons to have an attorney, starting with all of the reasons not to have one:
1. An attorney will [...]
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What will they ask me at my bankruptcy hearing?
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You’ve filed bankruptcy and now your § 341 Creditors Meeting is coming up. What should you expect? Understandably, many people are apprehensive about their “court” appearance. Usually, in most consumer oriented bankruptcy cases, the § 341 Meeting of Creditors is not an ordeal.
First, the § 341 Creditors Meeting is required and it is required that you attend this [...]
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What Can I Keep If I File For Bankruptcy In Michigan?
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If a creditor files a proof of claim in a Bankruptcy Proceeding, it is deemed allowed unless you or another interested party objects. So what does “allowed” mean and what are its ramifications?
An allowed claim can have significant repercussions. To start, if there are dividends that will be paid in the bankruptcy proceeding to creditors, it [...]
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You’re behind on your mortgage, and a foreclosure is threatened. You speak with a bankruptcy attorney, and are eligible for a Chapter 13, which will let you catch up on the payments and save the house. But should you?
I speak with clients every day in this situation, and one of the most important things I [...]
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In a Chapter 13 bankruptcy the debtor proposes a Plan where he makes monthly payments of the arrearages (past due debt) to the Chapter 13 trustee.
Because money is already tight, the question I hear most often from clients is when will the first Chapter 13 Plan payment due?
The general rule is found in the Bankruptcy Code, 11 U.S.C. [...]
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Planning for bankruptcy can be similar to planning to file your income tax returns. You have to be accurate. You have to be honest. But you do have the right to engage in some planning before you file. You do have the right to do things legally to leave yourself in the best position [...]
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I’ve been asked the question a thousand times. “How can your clients afford to file bankruptcy if they don’t have any money?” Its a good question. Certainly a question I asked before opening my consumer bankruptcy practice 18 years ago. Where does the money come from?
Lets start with the obvious. Family. I have seen parents [...]
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Medical bills from a prolonged or serious illness are one the most common reasons why people need to file for bankruptcy. I often get calls from people looking to file a medical bankruptcy.
But there is no such thing as a medical bankruptcy.
Medical bills are unsecured debts ( just like credit card debts), so a debtor filing for a [...]
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When will they figure it out? Wells Fargo and Chase have announced they plan to kick consumers while they are down again. Credit card rates are being increased, 3 percentage points by Wells following a similar increase by Chase, in the worst economic climate since the 1930s.
A Wells Fargo spokesman said that the bank waited [...]
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For the first time since means testing was introduced in 2005, several of the median income numbers for Georgia families have gone down. This means that the presumption of abuse is more likely to arise for Georgia filers.
Here is an example: if you have a family of 4 and file Chapter 7 on October 31 [...]
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Pamela Stewart, a Houston/Victoria (Texas) consumer bankruptcy lawyer spoke recently about bankruptcy at The People’s Law School sponsored by The University of Houston Law Center – Center for Consumer Law.
Highlights of the session included discussion of the different chapters of bankruptcy, who is eligible to file a Chapter 7 or Chapter 13 bankruptcy, the meeting of creditors that all [...]
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Unless you’ve been living under a rock, you know that foreclosures are at record levels. That’s true all over, but it’s even more of a problem for folks in Michigan. Caught between the real estate meltdown and increasing globalization of manufacturing, things haven’t been this bad since the Great Depression. Unemployment is [...]
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There is a new irony dealt by the bankruptcy means test, which has been required since the 2005 changes to the bankruptcy laws. On November 1, 2009 a new set of median income figures will apply to debtors seeking relief under bankruptcy that will kick more people when they are down.
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Can Bankruptcy keep you from getting student loans?
No. That’s the simple answer. If the loan is either funded or guaranteed by the government, you can’t be denied your right to get such a loan simply because you filed for, or were a debtor in a bankruptcy.
In most cases, getting loans immediately after filing for bankruptcy [...]
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Under the Bankruptcy Code, we calculate your “current monthly income” to see if you qualify for a chapter 7 case. Those with “current monthly income” more than the median income are presumed to be abusing the bankruptcy system if they file a chapter 7. They can “overcome” this presumption in some cases through the complex [...]
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Filing for Bankruptcy is no walk in the park. It is an extensive process, with significant document gathering and processing, in addition to research, disclosures, and sometimes multiple court and trustee hearings. Nevertheless, the more work done up front, the smoother the process will be. One such area involves compiling all the due diligence documents [...]
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I am often asked what to I need to do to file a bankruptcy. My reply is you have taken the first step. You have contacted a bankruptcy lawyer seeking information. Only with this information can you determine if you can file bankruptcy and if bankruptcy is the right thing for you to do. I [...]
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If you are a consumer thinking about filing bankruptcy, you will want to figure out whether to file bankruptcy before or after November 1 when changes to the income eligibility guidelines take effect. For some people, the means test changes will help and for others the changes will hurt.
In Kansas, for example, median family income [...]
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The small business owner wants to know what the options are for a struggling business. To identify those options, I need to know the following:
Do you have the time, energy, and desire to continue the business?
Could the business prosper if it wasn’t servicing old debt?
Could the business prosper if it shed equipment or premises leases?
Could [...]
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I was sitting in a Section 341 Creditors’ Meeting a year or so ago and a somewhat elderly lady was at the table with the chapter 7 trustee. She had filed her petition herself and she was answering the trustee’s questions.
The trustee asked her about real estate that she had transferred. She replied that it was [...]
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Chapter 13 has always been an option for individuals, couples, and sole proprietors (not corporations) who are struggling financially. Since the changes to the Bankruptcy Code under BAPCPA in 2005, more people may have to opt to file Chapter 13 rather than Chapter 7.
When a debtor’s income exceeds the state’s median income, he may not [...]
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Most people want to file their bankruptcy case right away. That’s not always the best idea. Why? There can be many reasons
Means Testing
The means test looks at your average income during the past six months. If you received a bonus or an unusual item of income during the past six months, it might pay you [...]
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What happens when the debtor in bankruptcy dies or becomes incompetent before the case is closed?
In the case of a Chapter 7, death or incompetency does not change anything. Because the Chapter 7 trustee is in charge of administering the estate for the benefit of the unsecured creditors, it makes sense that the case be [...]
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Cars and reaffirmations were strange enough but with Household Goods things just get a little bit weirder.
Reaffirmation is the process in a Chapter 7 bankruptcy in which the debtor wishes to keep an item that secures a loan. The debtor agrees to continue to pay for the item and the creditor lets them keep it.
In [...]
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Reaffirmation is the process in a chapter 7 where the debtor agrees to re obligates themselves on a debt and the lender lets them keep the collateral. The debtor makes the payments and keeps the car etc.
Reaffirmations of cars and things with wheels are treated very differently through the country even through out certain states. [...]
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JUDGE LARRY WALTERS becomes the latest Ohio bankruptcy judge to agree that as long as you are contractually due on house you can deduct the monthly payments from the MEANS TEST even if you are surrendering the house. IN RE JANICE PHILLIPS
This is important as the more Judges sign on to this concept [...]
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You will have to keep making your mortgage payments if you have a mortgage and want to keep your house after filing for bankruptcy. I have had a number of phone calls recently from people who can’t afford their mortgage payments. They were under the impression that by filing bankruptcy, they could keep their [...]
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I wanted to share 13 tips from the FBI before filing bankruptcy. I often tell clients that lying to the court is a crime, but often they do not believe me. So many times you will hear of stories of debtors who filed bankruptcy and did not disclose assets such as a boat, land or [...]
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What Happens When A Corporation Or LLC Files A Chapter 7 Bankruptcy
A corporation or LLC can’t get a discharge by filing bankruptcy. That means there will be no final order from the court saying that all of the debts are gone. So why file a Chapter 7 bankruptcy for your company? My colleague, Russell A. [...]
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75% of tax filers get a refund. And the average refund amount is over $ 2,300. I was surprised by these figures. Am I the only one not getting an “annual bonus” from the government?
What is wrong with getting a refund check, and what does it have to do with filing for bankruptcy? Plenty.
Can you imagine your [...]
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When you go to a bankruptcy lawyer, things are pretty rotten in your life. You’ve got these awful overdue bills, the debt collectors are hounding you day and night, and your personal life feels like it’s in shambles. You can’t sleep, you’re fighting with your spouse over the pile of bills on the [...]
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The US Supreme Court plans to hear oral argument on several important bankruptcy cases in its 2009/10 term. One case, Milavetz Gallop v. U. S., deals with the relationship between bankruptcy lawyers and their clients. The case of U. S. Student Aid Funds v. Espinosa will determine what type of procedural steps must be taken [...]