Be honest Be honest with yourself, your attorney, the trustee, the court and anyone else involved in your bankruptcy case. The first question to ask is do you really need the help? Are you someone who has a small amount of debt that is manageable over the course of six months to a year or+ Read More
The post 3 Tips For A Successful Bankruptcy Experience appeared first on David M. Siegel.
Here at Shenwick & Associates, the debtors that we represent (we represent creditors, too) are primarily looking to get their debts discharged in bankruptcy. However, what most debtors don't know is that besides getting rid of unsecured and secured debt, some liens or judgments secured by property can be eliminated by making a motion under § 522(f) of the Bankruptcy Code, which permits a debtor to wipe out the interest that a creditor has in property if the debtor's interest in the property would be exempt but for the existence of the creditor's lien or interest.
The most common types of liens that can be avoided under § 522(f) are judicial liens (a lien created when someone obtains a judgment against you and attaches the judgment against your property), but not including liens that secure a domestic support obligation); and nonpossessory, nonpurchase-money security interests. To qualify as a nonpossessory, nonpurchase-money security interest: (1) you (not the creditor) still possess the collateral; and (2) you used property you already owned as collateral for the loan, not money that you borrowed.
A lien is considered to impair an exemption to the extent that the sum of: (i) the lien; (ii) all other liens on the property; and (iii) the amount of the exemption that the debtor could claim if there were no liens on the property, exceeds the value that the debtor's interest in the property would have in the absence of any liens.
By way of example, let's assume that a house owned by a husband and wife has an appraised value of $500,000. The house is subject to a $200,000 mortgage. The husband and wife file for chapter 7 bankruptcy and have a combined $300,000 homestead exemption under New York State law. Prior to their bankruptcy filing, a judgment creditor records a $75,000 judgment against the house. The debtors may commence a motion under § 522(f) of the Bankruptcy Code to avoid or eliminate the $75,000 judgment docketed against the house.
To discuss whether lien avoidance as part of a bankruptcy filing would be a beneficial strategy for your debt issues, please contact Jim Shenwick.
Why do debt collectors keep calling me at work after I tell them to stop? The Fair Debt Collection Practices Act protects you from debt collectors calling your workplace. But, if you tell them you want them to stop, the debt collectors keep calling. How’s that? To get them to stop calling, you need to […]The post Debt Collectors Keep Calling Me At Work by Robert Weed appeared first on Robert Weed.
Wells Fargo Bank has admitted to opening millions of customer accounts and credit card accounts without customer authorization since 2005. Stories have emerged of a bank gone wild where employees working in an intense sales culture felt pressured to open new accounts to meet sales quotas.
Wells Fargo has agreed to pay $185 million in fines to the Consumer Financial Protection Bureau.
So what happens when customers file bankruptcy on credit card accounts fraudulently opened without any authorization? Naturally, Wells Fargo filed bankruptcy Proof of Claims with the court itemizing the amounts not legally owed. And that reality leads to the next logical question: Has Wells Fargo committed bankruptcy fraud for filing false proof of claims?
False Claims—18 U.S.C. § 152(4):
A person who…knowingly and fraudulently presents any false claim for proof against the estate of a debtor, or uses any such claim in any case under title 11, in a personal capacity or as or through an agent, proxy, or attorney;…shall be fined…, imprisoned…, or both.
It would be hard for Wells Fargo to argue that it has not “knowingly and fraudulently” presented false claims in bankruptcy proceedings since they authored the false debt.
HOW DOES A BANKRUPTCY ATTORNEY IDENTIFY FRAUDULENT WELLS FARGO CLAIMS?
A tougher question for bankruptcy attorneys is how they will be able to distinguish valid claims filed by Wells Fargo from the fraudulent claim. All the claims look the same, so how do you tell the difference?
Most claims filed in bankruptcy cases do not attach copies of signed credit agreements, so it is unlikely that clients will be able to spot fraudulent claims either. Signed credit agreements are becoming a thing of the past and it is extremely rare for a proof of claim to include a copy of a signed revolving credit card agreement.
The Wells Fargo scandal highlights a major problem with this new age of “inferred consent” in the credit card industry. As the the industry has moved away from traditional signed credit agreements to modern methods of assent over the phone or internet, it becomes increasingly difficult for consumers to deny liability for revolving credit accounts. Increasingly, credit card bill collectors sue not under traditional breach of contract legal theories but under Account Stated doctrines where liability is claimed because the liability is stated in monthly account statements.
So, if a Wells Fargo Proof of claim does not attach copies of signed credit agreements, how can we be sure the debt is real? How should debtor attorneys react to all Wells Fargo claims? Should objections be automatically filed to every Wells Fargo claim until they can be verified? If no written agreement can be produced, should it be assumed that the debt is invalid? Should the bank be entitled to recoup the money loaned without interest under some type of Quantum Meruit or Unjust Enrichment theory?
This latest Wells Fargo scandal poses a major dilemma for Wells Fargo, bankruptcy attorneys and the court. Generally speaking, the filing of a proof of claim is prima facia evidence of the validity of a debt. Does that legal presumption belong to Wells Fargo claims going forward?
Are you facing wage garnishment? Can you afford to have your wages garnished? Many people, just like you, are struggling from paycheck to paycheck just to pay their mortgage or rent, utilities, and groceries. When wages are garnished against a person in this type of financial strain, it may mean that person or family cannot afford groceries or afford to pay their electric bill in full anymore. They end up having to make a sacrifice, choosing what bill or necessity not to pay now, because of the wage garnishment. Are you in this type of situation right now? If so, our East Troy bankruptcy lawyer, Shannon Wynn can help.
Most of us mean well and want to pay off all of our debt as soon as we are able. However, sometimes a creditor cannot wait and wage garnishment happens. There are even more implications when it happens this time of year, right before the holidays and right before the winter utility bills go up. Read below to find out how our East Troy bankruptcy lawyer, Shannon Wynn, can help stop wage garnishment before the holidays.
What Does A Wage Garnishment Mean?
A wage garnishment is when a creditor is given permission from the court to be forwarded money due and owing from a portion of the debtor’s paycheck. If your wages are being threatened by wage garnishment by a creditor, you may want to consider how bankruptcy can help. You can contact our East Troy bankruptcy lawyer, Shannon Wynn, at 262-725-0175 for a free, initial bankruptcy consultation.
How Can An East Troy Bankruptcy Lawyer Stop Wage Garnishment?
There are two ways our East Troy bankruptcy lawyer, Shannon Wynn, can stop wage garnishment before the holidays. One way, is through the filing of a Chapter 7 bankruptcy. If you qualify for a Chapter 7 bankruptcy, determined through a means test, wage garnishment will be avoided or cease the moment you file. All creditors will be notified that you have filed for a Chapter 7 bankruptcy and that all debt collection attempts should immediately stop. The other way, is through a Chapter 128 Debt Amortization Plan. If you do not qualify for a Chapter 7 bankruptcy, you can file a Chapter 128 Debt Amortization Plan. Chapter 128 can stop wage garnishments, stop accruing interest, and requires no court appearance for the majority of cases.
Contact East Troy Bankruptcy Lawyer, Shannon Wynn
To learn more about Chapter 7 bankruptcy and Chapter 128, schedule a free, initial consultation with our East Troy bankruptcy lawyer, Shannon Wynn, by calling 262-725-0175. Attorney Shannon Wynn will listen closely to your situation and discuss all options available to you. Call or stop by one of our bankruptcy offices today. Wynn at Law, LLC has bankruptcy offices located in Lake Geneva, Delavan, Muskego, and Salem, Wisconsin.
Find out if you qualify for bankruptcy.
Click Here to Get a Free Bankruptcy Assessment
from Wynn at Law, LLC
It’s Free. It’s Easy.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
Code Provision There are times when you may need to convert a chapter 13 bankruptcy case to a chapter 7 bankruptcy case. Section 1307 of title 11 USC provides for conversion or dismissal. In essence, under section (a), a debtor may convert a case under Chapter 13 to a case under Chapter 7 at any+ Read More
The post Converting A Bankruptcy Case From Chapter 13 To Chapter 7 appeared first on David M. Siegel.
Junk debt buyers are the modern version of a post Civil War carpetbagger as they suck money out of every county in the State of Nebraska without contributing anything in return. I cannot think of a single positive thing these debt collectors contribute to our state.
Junk debt buyers typically purchase defaulted credit card accounts for about 3 to 7 cents on the dollar. Common debt buyers include Midland Funding, Portfolio Recovery Associates, Calvary Portfolio Recovery, Cach LLC, Asset Acceptance LLC, and many others.
Debt buyers clog our courts with collection lawsuits. In a sense, the debt buyer is in a race to recover its investment before the debtor is garnished by another creditor or files bankruptcy, so they are quick to file lawsuits after acquiring the debt.
Most junk debt buyers are located outside the State of Nebraska. Consider the damage they do to our state:
- Nebraska courts are clogged with tens of thousand of junk debt buyer lawsuits annually. Our taxpayers are burdened with providing enough judges and court personnel to handle these lawsuits.
- Debtors lose up to 25% of their paychecks and all of their bank account balances due to garnishments. Where does all that money go? To the debt buyers residing in other states.
- Every dollar garnished by junk debt buyers is a dollar not spent in the Nebraska economy.
- Junk debt buyers pay no taxes to Nebraska.
So why is Nebraska allowing junk debt buyers to suck money out of our state, to burden our courts with tens of thousand of lawsuits, and to economically damage working families in our state without paying anything back in return? What is Nebraska getting out of this arrangement? I honestly cannot see why Nebraska is being so generous to these carpet-bagging outsiders.
Perhaps or legislators should consider a few modest reforms:
- Debt buyers that file more than 100 lawsuits per year should be required to register with the Nebraska Secretary of State and pay an annual licensing fee.
- Debt buyers should not be awarded Default Judgments on credit card accounts unless they can provide the courts with a copy of the signed credit agreement.
- Debt buyers should not be allowed to garnish more than 10% of a debtor’s wage income or bank account balances.
- Telephone collection calls should be limited to one call per week.
- Junk debt buyers should pay state income taxes on the revenue they generate from our state.
Debt buyers are certainly entitled to enforcement of the contracts they purchase, but such rights should not cause an undue burden for the taxpayers of our state. If they want the benefits of our efficient court system, they should pay their fair share of the cost of that system.
The most famous name in the getting out of debt industry is Dave Ramsey. As a young man Dave himself was in a pile of debt and wound up filing bankruptcy. The pain of that experience lead him on a quest to learn about personal finance and he began a career in advising others how to get out of debt.
I’m a talk radio/podcast junkie. I don’t care what the topic is as long as it is interesting. Dave Ramsey is the host of a nationwide talk show and it played on the radio as I was driving home. So, as I counseled clients every day about how to file bankruptcy, I would listen to Dave on the way home explaining how to avoid it. Gosh, was I doing my clients wrong by not teaching them the tough road out of debt that Dave advocated?
The hallmark of the Dave Ramsey system is a series of seven “Baby Steps” one takes to eliminate debt and build wealth.
- Step 1: Save $1,000 Emergency Fund.
- Step 2: Debt Snowball. Pay off all debt.
- Step 3: Save 3 to 6 months of expenses.
- Step 4: Invest 15% of income in retirement.
- Step 5: Establish College Fund for children.
- Step 6: Pay off house.
- Step 7: Build Wealth and Give.
The Debt Snowball is the program to eliminate debt. The basics of the program are as follows:
- List all debts from Smallest to Largest.
- Maintain minimum payments on all debts and get all debts out of default status.
- Devote all extra income to pay off the smallest debt first, regardless of whether that debt has a higher or lower interest rate.
- Reduce expenses, sell off unnecessary possessions, and take on part-time jobs to fund the debt snowball.
- Once the smallest debt is paid, move onto the next smallest debt and then the next smallest, etc., etc., until all debt (except the home mortgage) is paid in full.
Why pay off the smallest debt first instead of the debts with the highest interest rate? Because, according to Ramsey, getting out of debt is 80% emotion and 20% head knowledge.
If it were about math, you wouldn’t have credit card debt. It’s not about math. It’s about behavior modification.
Paying off the smallest debt “fires you up!” says Ramsey, and that small success helps ignite an emotional reaction to kill off the remaining debts. There is actually a lot of scientific fact to back up that claim, especially in the study of healthy habit formation. Small victories do lead to bigger wins.
The challenge is you. You are the problem with your money.
Ramsey focuses on “behavior modification” as the key to solving a debt problem.
Most financial people make the mistake of trying to show you the numbers, thinking that you just don’t get the math. I am sure that the problem with my money is he guy in my mirror.
A large part of the behavior modification is about daring to be radical–to sell your home and fancy car and to take on a part-time pizza delivery job–to drop out of society’s pressure to keep up with the Jones’.
Stop buying things you don’t need with money you don’t have to impress people you don’t even like.
It is hard to disagree with any of this. This is sensible and old-fashion advice to getting out of debt. Cut expenses. Increase income. List the debts and have a plan of attack. Paying off debts from smallest to largest is also a valid strategy since getting out of debt does require a person to be “fired up” and focused.
The power of focus is what causes our Baby Steps to work . . . if you attack too many areas at once you don’t finish anything you start for a long time . . . That makes you feel that you aren’t accomplishing anything, which is dangerous.
The key weakness of the Debt Snowball program, however, is the requirement that you must be able to get all debts out of default status and maintain minimum payments on all debts during the plan. Is that feasible? Can you really maintain minimum payments on all debts and get the delinquent debts current while you pound away at the smallest debt? Yes, some folks just need to cut the cable bill and downsize their life to free up the necessary money to make this plan work, but that simply does not work for the vast majority of people I see on a daily basis.
So, if you squander a lot of money on foolish entertainment, cars, eating out, cell phones, etc., the Dave Ramsey program may work just fine for you. Get on a financial diet and start paying off the debt. Yep, that works . . . if you have the income. But what if you don’t? Then what? What if 25% of your paycheck is being garnished and the judgments are stacking up one on top of another and the mortgage payment is behind on a house worth no more than what is owed? How do you downsize that expense?
And what if you can’t get a second job to speed up the debt snowball? What if your health, both physical and mental, is already taxed to the maximum? What if getting a part-time job means abandoning your children and a stressed out spouse for another 20 hours a week? Is that a smart decision? Sure, you might become debt-free, but will you have a family left to come back to?
Dave Ramsey is a positive voice of reason and encouragement in the personal finance industry. I like his attitude and enthusiasm. Overall, I think we all should really pay attention to his message. Stop lying to yourself and stop pretending to be somebody you are not. Downsize your life, become debt free, and then realize the blessing of truly being a free person. That’s a great message and goal.
But the Dave Ramsey program is not for everyone and it is just not feasible for too many. If you are living beyond your means, try it. But if you are already struggling after devoting every dime to stay out of debt and now you are draining your retirement or mortgaging your home to make minimum payments on debts, consider other options.
Image courtesy of Flickr and Bonnie Brown.
Fall is one of the best times to purchase real estate in Walworth County. Although spring is normally considered the best time to purchase real estate, the autumn season can be an even better time to purchase. Our Walworth County real estate attorney, Shannon Wynn, lists several reasons why in the list below.
7 Reasons Fall is a Great Time to Buy Real Estate in Walworth County
1. Your competition is reduced. Many home buyers are looking to get into that new home before the school year starts. In the fall, those buyers are out of the picture.
2. Home prices are reduced. “Home sellers who did not sell their home during the prime market real estate season of spring and summer are eager to make a sale before winter,” explains Walworth County real estate attorney, Shannon Wynn.
3. Home sellers are more desperate. Home sellers who listed with too high of a sale price or who have had no action on their home listing are eager to make a deal. Sellers want their homes sold before the stagnant winter real estate season and before the holidays.
4. You can get a better price. Not only are home prices being reduced, but negotiations are more likely to go in the buyers’ favor. “With fewer buyers on the scene and a long winter approaching, home sellers are more likely to take a much lower offer,” states Walworth County real estate attorney, Shannon Wynn.
5. There are more time-sensitive home sales. Many homes that are listed in the fall are time-sensitive sales. These sellers didn’t decide to put their home up for sale in the spring and wait around until they were offered a good price. These are home sellers who need to move because of a job, a family situation, or because their new construction home is finished. These sellers more determined to make a sale quickly.
6. You can get a serious tax break. “Mortgage interest and property taxes are tax deductible, even if you close on your new home in December. Any payments you make before closing are also tax-deductible. This can really make a difference in your owed taxes,” states Attorney Shannon Wynn.
7. Your buyer’s agent gives you more attention. Since real estate agents are busier during the prime spring and summer seasons, they don’t have as much attention to give you. During the fall, there are less home buyers. Because of this, real estate agents can provide you with much more detailed attention. This is also true for mortgage lenders, moving companies, and other real estate related companies.
Contact Walworth County Real Estate Attorney Shannon Wynn
Our Walworth County Real Estate Attorney, Shannon Wynn, assists home buyers with reviewing offers and counteroffers, evaluating financing options, reviewing title commitments, reviewing closing documents, and much more. By law, only an attorney can provide you legal advice – not a real estate agent, loan officer, or closing agent. It is always a good idea to have a qualified and knowledgeable Walworth County real estate attorney in your corner. Contact Shannon Wynn to discuss your real estate needs. She can be reached by phone at 262-725-0175. Wynn a Law, LLC has real estate law offices located in Lake Geneva, Salem, Muskego, and Delavan, Wisconsin.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
Here at Shenwick & Associates, we've written extensively about the "means test," which is a complex calculation that debtors must pass to qualify for relief under chapter 7 of the Bankruptcy Code if they're over the median income for their state and household size.
Since the means test was implemented as a result of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, we've filed hundreds of Chapter 7 cases, and usually manage to vault potential debtors over the hurdle of the means test. Here are a few of our tips and strategies on how to pass the means test:
- Determine if a majority of a debtor's debt is non–consumer/business debt. If it is, they are exempt from the means test.
- Make sure that all of your expenses are listed:
- Taxes are deductible from the means test–includes FICA, Social Security, federal, state and local income taxes. These can add up for most debtors, and has made the margin of difference between passing and failing in many cases.
- Involuntary deductions from wages, such as mandatory retirement plans, union dues, uniform costs, and work shoes, but not voluntary 401(k) contributions or loan repayments.
- Term life insurance, health insurance and disability insurance.
- Payments on secured claims (for mortgage, car loans, etc.) coming due in the 60 months following filing, as long as the debtor is keeping the collateral.
- Continuing charitable contributions, up to 15% of gross income.
- Child care expenses for babysitting, nursery school, daycare and preschool.
- Out of pocket health care expenses, to the extent they exceed the national standards amount of $54/month per household member under 65 and $130/month per household member 65 or over.
- Add other members to the household to increase household size. Bring the kids back home!
- If possible, reduce your income and your spouse's income for six months (the lookback period for the means test).
- Make sure your expenses from a business or rental property are fully listed to minimize your net income. In one case, a client who was providing independent transportation services failed to listed his expenses. Once we listed those and deducted them from his gross income, he passed the means test.
- If you have a spouse, make sure that you're deducting any part of your spouse's income not used for the household expenses of you or your dependents (i.e. for your spouse's tax debts or support of people other than you or your dependents).
If you have questions about your unique financial situation and whether you might be eligible to file Chapter 7 bankruptcy, please contact Jim Shenwick.