Posted by Kevin on December 11, 2011 under Bankruptcy Blog | 
Every year about this time, my bankruptcy practice slows down. Why? People are focused on the holidays and buying presents. Then, in January and February, I get lots of calls for consultation. Sort of like a last hurrah.
Well my advice is that if you really want to file bankruptcy in January or February, then do not use your credit cards during the holiday season.
When you file bankruptcy, you want to get a discharge from your debts. There are exceptions to discharge, however. One exception is exceptions is for consumer debts totaling over $500 to a single creditor for luxury goods or services incurred with 90 days of filing. Another is for cash advances totaling over $750 obtained within 70 days of filing. For these situation, the presumption is that if you bought the HD tv or took the cash advance, you do not get the discharge.
In addition, there is the catch all that if you obtain credit by false pretenses, then it usually is not dischargeable. This could mean that you ran up a credit card and then filed. The court takes the position that the debtor had no intention of re-paying the debt.
A word to the wise.
Posted by Kevin on October 5, 2011 under Bankruptcy Blog |
When the Code was changed back in the late 1970′s, a debtor could discharge a student loan if there was a hardship situation or if loan payments were due more than 5 years before the filing. Now, a debtor can only get a hardship discharge. I tell all my clients that you have to be in pretty bad shape with little or no prospects for a decent living to get a hardship discharge . Even then, it was iffy.
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Posted by Kevin on September 4, 2011 under Bankruptcy Blog |
Now, this is a little advanced. You open your mail in Hackensack and have been hit with a Notice of Federal Tax Lien. Not good because it applies to all your property and, more importantly, the collection agent is the IRS. The one thing that you do not want is for the IRS to start levying on your property to satisfy the lien. That will ruin your day or year, for that matter.
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Posted by Kevin on August 22, 2011 under Bankruptcy Blog |
Bankruptcy has its own language- sometimes quite colorful. We have cram downs and strip offs. Long before we talked about mortgages being underwater, underwater was a term used frequently in bankruptcy to determine whether a claim was secured or not.
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Posted by Kevin on August 13, 2011 under Bankruptcy Blog |
The object of a consumer bankruptcy is to get a discharge of your debts. That means that you do not have to pay them back. The Code, however, has certain exceptions to discharge. Among them is a debt for willful and malicious injury by the debtor to another person or the property of another person or entity.
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Posted by Kevin on August 8, 2011 under Bankruptcy Blog |
Many middle class families find themselves in economic distress when the kids go to college. Well, unfortunately, the bankruptcy code does not help those families. It basically says that if you have to choose between paying your creditors and Junior’s tuition, Junior is SOL.
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Posted by Kevin on July 20, 2011 under Bankruptcy Blog |
Under the 2005 Code know as BAPCPA, a consumer debtor must pass the means test to qualify for Chapter 7 bankruptcy. Chapter 7 allows a debtor to make no payments to unsecured creditors while keeping all exempt property.
What most consumers believe is that if you are under the median income for your area , you pass the means test, and you get to file under Chapter 7. Yes and no.
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Posted by Kevin on July 16, 2011 under Bankruptcy Blog |
The 2005 Act, BAPCPA, requires that a debtor submit to a means test to determine eligibility for Chapter 7. The means test was based on an IRS test to determine what part of income a taxpayer can pay on back taxes.
The means test has a two part test for motor vehicles. The first is an ownership allowance. The second is an operations allowance. The ownership allowance gives the debtor a $496 deduction per vehicle per month no matter what you owe on it. If your monthly payment is $200- you get $496. If your monthly payment is $600- you get $496. But what happens if you have your vehicle paid off?
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Posted by Kevin on July 9, 2011 under Bankruptcy Blog |
The main purpose of this blog (in fact, this whole website) is to give you, the consumer, information so that you may make an informed decision concerning whether to file bankruptcy. Your entire financial future can be riding on this decision.
From time to time, I review the posts to see that they are covering a wide range of topics in bankruptcy. I did that this morning. Then, I started to think back why I wanted to get involved in bankruptcy law in the first place. Besides helping people, I found bankruptcy to be more complex that I had imaged, was ever changing (2 Codes and numerous revisions over the years), and allowed me to be a deal negotiator and a litigator (trial lawyer) at the same time.
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Posted by Kevin on July 8, 2011 under Bankruptcy Blog |
In a Chapter 13, the debtor is limited to $360,475 of unsecured debt. Unsecured debt is debt where there is no collateral. Like credit card debt.
However, in a Chapter 13, a debtor can strip off otherwise secured debt that is completely underwater. For example, if your house is worth $300,000 and the first mortgage is for $350,000 and the second mortgage is for $100,000, the second mortgage is totally unsecured and could be “stripped off”. When it is stripped off, it becomes unsecured debt and must be added to other unsecured debt.
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