3 days 16 hours ago

Bankruptcy can be considered a taboo subject because of the fears and misconceptions about bankruptcy. But sometimes people need a helping hand, and bankruptcy may be right for them. The good news is these negative stereotypes about bankruptcy are usually not true. We’ll discuss some common misconceptions of bankrutpcy and the truth regarding these misconceptions. You’ll be suprised at how forgiving the bankruptcy process can be!
1. Bankruptcy Permanently Kills Your Credit: Bankruptcy will never completely kill your credit. A bankruptcy remains on your credit report for 7-10 years, so you can expect limited access during those years, but it is not permanent. Most people even receive credit card offers right after their successful bankruptcy discharge. Usually, a year after a successful bankruptcy discharge, your credit will even go up. This is based on multiple factors. These factors are capacity, payment history, and your debt to income ratio. After bankruptcy, all three of these factors are improved. As soon as you go and get a new credit card, you now have a large capacity, all your late payments have been wiped off your credit, and your debt to income ratio is much improved.
2. Bankruptcy Discharges All Debt: This is not true. Chapter 7 bankruptcy can discharge most unsecured debts like personal loans, utility bills, credit card charges, and medical bills. Chapter 7 may be able to even discharge secured debts under certain circumstances. Debts that can not be discharged in bankruptcy are child support, spousal support, student loans, and more.
3. I Can Incur Debt Right Before I File For Bankruptcy: You can not. 90 days before you file for bankruptcy, you are presumed to be insolvent. This means you are presumed to be unable to pay all debts owed. If you are maxing out credit cards right before filing for bankruptcy, this can cause major problems when you finally go to file. This is because it will look like you intend to defraud your creditors.
4. You’ll Lose Everything In Bankruptcy: This is far from the truth. Most property in a bankruptcy is exempt. In a bankruptcy, your home, vehicle, and clothes are exempt. Usually, creditors are not interested in the items that aren’t exempt like your air fryer or flat screen tv. So most likely, you’ll be able to keep majority of the items you own.
5. Bankruptcy Filers Are Financially Irresponsible: This is false. No one who filed for bankruptcy wanted to go through a global pandemic. No one intended to lose their jobs. No one intended to become severely ill and rack up thousands in medical bills. Filing bankruptcy should never be a shameful situation. Bad things happen to everyone and not everyone has the funds to pay for everything.
For more bankruptcy myths debunked, click here!
The post Bankruptcy Misconceptions & Truths appeared first on Allmand Law Firm, PLLC.

5 days 16 hours ago

In May 2021, we reported that Real Housewives of Beverly Hills star, Erika Jayne may be brought in to her estranged husbands bankruptcy case. Now, E! News reports that Jayne is being sued for $25 million by Tom Girardi’s bankruptcy trustee, Elissa Miller. This lawsuits stems from Jayne alledgedly using the funds from Girardi’s company for her extravagant lifestyle.
Erika Jayne allegedly received jewelry and other various luxuries that were purchased using funds from Girardi’s company, Girardi Keese. Erika has stated that due to her not receiving the payments directly from the Girardi Keese comapany, she is not liable and therefore should not have to pay the $25 million back. Per her lawsuit, Jayne charged $14 million on her credit card and another $11 million to shopping vendors. None of these payments made to Jayne from the Girardi Keese company were legitimite firm expenses, but instead used for the sole purpose of Jayne’s lavish lifestyle.
From The Article:

“Even though Erika contends ‘she did not know her husband was maintaining a debt,’ the trustee feels ‘it would be a miscarriage of justice’ if the reality star was allowed to ‘simply walk completely free’ while owing more than $25 million to the estate, according to the filing. ‘Erika signed all of her tax returns, numerous credit card slips, and was well aware of the money she spent on the Debtor’s credit cards and the Debtor’s payment of her personal expenses,’ Miller argues. ‘Her feigned willful blindness and ostrich approach to these expenditures will do absolutely nothing to limit her liability.'”

Erika’s attorney, Evan Borges, claims Erika did not deceive anyone. He claims that “the trustee and her legal team are ‘jumping to conclusions without a full investigation,’ as well as ‘bullying and blaming Erika for actions taken by Girardi Keese for which Erika does not have legal liability.'”
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The post Tom Girardi’s Bankruptcy Trustee Sues Erika Jayne For $25 Million appeared first on Allmand Law Firm, PLLC.

6 days 10 hours ago

five-star“Her assurance that there was nothing to be ashamed of, gave us the incentive to proceed.” S.R.
BANKRUPTCYDiane was fabulous during our bankruptcy, guiding us every step of the way. After medical bills got us behind, we didn’t know where to turn and felt uncomfortable filing. Her assurance that there was nothing to be ashamed of, gave us the incentive to proceed. Two years later we had questions in another matter, in which she again went to bat for us without further fees. I would recommend her firm to anyone in financial difficulties.  S.R.
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The post Diane Was Fabulous During Our Bankruptcy appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

1 week 2 days ago

When there is a court judgement against you, one of the ways the creditor can collect on this judgement is by filing a “wage garnishment” to deduct a portion of you paycheck to pay back the debt. In my experience, … Continue reading →
The post How Do I Stop a Garnishment in Alabama appeared first on Vonda S. McLeod, Attorney at Law.

1 week 2 days ago

The Wall Street Journal reports that USA Gymnastics proposed a $425 million settlement in their bankruptcy. This settlement will go to the victims of former gymnastics physician, Larry Nassar.
Larry Nassar is a former physician who has been accused of sexually abusing USA gymnasts as well as student athletes from Michigan State University. Victims who have come forward against Nassar go back as far at 1996. Nassar was sentenced to 40 to 175 years in prison due to him pleading guilty on seven counts of sexual misconduct.
This settlement offer comes 5 years after the first public accusation again Nassar. The hundreds of lawsuits against USA Gymnastics forced them to file for bankruptcy back in 2018. Lawyers representing the victims have accused USA Gymnastics of creating “a toxic environment filled with pressure on young teenage athletes to be seen as compliant in which a predator could flourish.”
From The Article:

“John Manly, a lawyer for many of those gymnasts including Biles, Maroney, and Raisman, as well as the first Olympian to accuse Nassar of abuse, Jamie Dantzscher, said he was supportive of the figure proposed by USA Gymnastics, though he still believed that it was lower and slower coming than it should have been because of USA Gymnastics’ bankruptcy filing. He said he wanted to see changes that would prevent bankruptcy being used in that way in the future. ‘These weren’t bad business decisions or a bad loan. This was systemic coordinated criminal conduct,’ Manly said.”

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The post USA Gymnastics Proposes $425 Million Settlement For Larry Nassar’s Abuse Victims After Bankruptcy appeared first on Allmand Law Firm, PLLC.

2 days 13 hours ago

While there is an age requirement to vote, consume alcohol, or drive a car, the Bankruptcy Code does not require an individual to be a certain age to file for bankruptcy. However, even though there is no legal requirement under federal law, state laws make filing for bankruptcy at a young age impractical. In California, […]
The post Is There an Age Requirement for Filing for Bankruptcy in California? appeared first on The Bankruptcy Group, P.C..

1 week 3 days ago

Today marks the start of Hispanic Heritage Month! We celebrate this month to recognize the achievements of inspiring Hispanic Americans! Check out these festive local events for the next month in the Dallas – Forth Worth, Texas area.

We celebrate Hispanic Heritage Month to recognize the achievements and contributions of Hispanic American champions who have inspired others to achieve success.

For more information on Hispanic Heritage Month, please check out:
Dallas / Fort Worth Hispanic Heritage Month Celebrations
Canto y Grito – Celebrando Nat’l Hispanic Heritage Month
Enjoy performances: Poetry, DJ, Ballet Folklorico, Mariachi- On the cool breeze, starry sky, free parking, food & drink.
-Where: Latino Cultural Center, 2600 Live Oak Street, Dallas, TX, USA
-When: September 15, 2021 (6:30 p.m. – 9:30 p.m.)
-Cost: $5
-For more info: Click here!
DANCE CARDIO: Fiesta Latina with Social Joy
We’re taking one of Dallas’s best dance-fitness classes outside to kick off Latinx Heritage Month! Experience a true outdoor dance cardio party with popular Zumba® instructor and Fitness Ambassador Martha Palacios (@fitwithmartha) in downtown’s Klyde Warren Park.
– Where: Kylde Warren Park
-When: September 15, 2021 ( 7:00 p.m.- 7:45 p.m.)
-Cost: Free (Must register here)
-For more info: Click here!
Latino Heritage Festival – DeSoto
Join us under the covered outdoor Amphitheater at DeSoto Town Center as we enjoy the sounds of local and national Latin recording artists. Bring your lawn chairs and prepare for an evening full of live music, great food, a variety of vendors and fun for the entire family.
-Where: DeSoto Amphitheater, 211 E. Pleasant Run Road
-When: September 18, 2021 (6:00 p.m.-10:00 p.m. | Gates open at 5:00 p.m.)
-Cost: Free
-For more info: Click here!
Hispanic Heritage Celebration – Grand Prairie
-Where: Grand Prairie Farmer’s Market, 120 W. Main St
-When: Saturday, September 25, 2021 (8:00 a.m. – 1:00 p.m.)
-Cost: Free
-For more info: Click here!
The post Hispanic Heritage Month Celebrations in DFW appeared first on Allmand Law Firm, PLLC.

1 week 4 days ago

The Massachusetts Attorney General recently settled a major consumer fraud case against subprime auto lender Credit Acceptance Corporation.
The case is long and complicated, but the issue that caught my eye is the argument about the true purchase price of a vehicle.
For example, assume a dealer sells a vehicle for $10,000 and the buyer signs an 18% loan spread over 60 months at $253.93 per month.  Then, assume the dealer immediately sells the loan to a subprime lender for $8,000 cash.
What is the true purchase price of the vehicle? Is it $8,000 or is it $10,000.
I would argue the true sales price is $8,000 because that is what the dealer actually received. In fact, I’m quite certain the dealer would report on its tax return that the vehicle was sold for $8,000.  And the financial records subprime lender probably reports that it acquired the loan for $8,000 as well.  So, isn’t that the true sales price?
But all the purchase documents state a purchase price of $10,000.  All the finance charges and disclosure statements say the cost was $10,000 and that the interest rate is only 18%.
If, however, substance rules over form, both the car dealer and the subprime lender have a major problem. The problem is that they are lying about the true sales price of the vehicle and the true interest rate being charged.  If the true sales price is $8,000, then the actual interest rate is actually 29%, not 18%.  And by failing to disclose the true interest rate, the dealer and lender have committed a violation of the Truth in Lending Act disclosure.
Determining the real purchase price of a vehicle also has importance in a chapter 13 case when the vehicle was purchased within 910 days of filing bankruptcy. Under Section 1325(a)(9) of the Bankruptcy Code, a debtor must pay a lender the current balance of the loan, even if the vehicle is worth less than the balance of the loan.
So it makes a BIG difference if the actual loan amount is $8,000 instead of $10,000.  It also makes a big difference if the true interest rate is 29% and not 18%.
The legal consequence of violating Nebraska laws on usury is that a creditor is entitled to no interest at all.  See Nebraska Statute 45-1024. (“If any amount, in excess of the charges permitted, is charged, contracted for, or received, the loan contract shall not on that account be void, but the licensee shall have no right to collect or receive any interest or other charges whatsoever.”)
Interest rates for installment loans in Nebraska are capped at 24% on the fist $1,000 and 21% on balances above 21%.  If Nebraska Courts rule that the true purchase price of a car is $8,000 and not $10,000, that automatically triggers a violation of these interest rate caps.
So, in theory, a debtor could propose to pay off the car loan at $8,000 and offer no interest to the creditor as a penalty for violating Nebraska Statute 45-1024.  That’s a big deal.
Our courts have routinely ruled that we apply the law to the facts at hand and disregard the forms of a transaction. Labels do not control.

  • Lease to Own Transactions:  The most common form over substance transaction we find is where a creditor tries to disguise a purchase in the form of a lease. Several years ago I litigated against a company called Cash In a Flash Inc. that disguised high interest rate title loans in the form of a lease.  The Nebraska bankruptcy court  and Nebraska Department of Banking ruled that the transactions were really loans and the lender had violated Truth in Lending disclosure requirements.
  • Reasonable Compensation:  Tax courts routinely take issue with business owners who evade payment of Social Security taxes by paying themselves artificially low salaries.
  • IRS Disguised Sales Rules: The IRS commonly recharacterizes transactions between partners under Section 707 of the Internal Revenue Code.
  • Time Sale Transaction:  “It appears quite clearly that the transaction was a loan to Jones disguised as a conditional or time sale with defendant as surety or guarantor. As such it is usurious and subject to the forfeiture of interest. See §§ 45–105 and 45–138(3), R.R.S.1943.” Midstates Acceptance v. Voss, 202 N.W.2d 822, 189 Neb. 411 (Neb. 1972).  Midstates Accceptance v. Voss, 202 N.W. 2d 822, 189 Neb. 411 (Neb. 1972)

But when it comes to the subprime auto lending two-step dance, our courts fail to confront the nonsense of these transactions.

Overcharging is not in itself usury

The Michigan bankruptcy court confronted this issue in the case of Allen-Morris v. Nicholas Fin., Inc. (In re Allen-Morris), 523 B.R. 532 (E.D. Mich. 2014).  In that case the debtor claimed that the auto dealership was inflating the price of the auto to disguise a usurious rate of interest (above 25%).  The debtor attempted to prove the hidden interest rate by relying on NADA and Kelly Blue Book values to prove the cars were sold at inflated prices.
The bankruptcy court disagreed, and on appeal the district court ruled  that “overcharging is not in itself usury.”  The court also stated that “even overcharging solely because a product is being sold on credit rather than for cash in not in itself usury.” However, the court also stated that the debtor did not allege that he was forced to purchase the vehicle at an inflated price to secure the loan, so perhaps the door is not completely shut on this argument.
What I take away from this is that it is so important to shop for the auto loan before shopping for the vehicle itself.
There is an incestuous relationship between car dealers and subprime lenders. In the above example the car dealer is clearly selling the vehicle for $8,000, but the bill of sale says $10,000.  It is also clear that the dealer does not care if the buyer pays the $8,000 cash or if it is paid by the subprime lender. The case price is $8,000.
I suspect that most buyers would object to paying 29% interest on a car loan. But from what I can see, if your credit is hurting and you agree to finance a car at 18% interest, chances are you are really paying 29% but just don’t realize it.
Cash talks. When consumers walk onto a car lot with their loan already secured, they tend to negotiate lower prices.  Instead of paying $10,000 they negotiate the price down to $8,000.
Never depend on a car dealer to supply financing. Always shop the loan before shopping the car.
Image courtesy Flickr and Nicole Yeary.

1 week 5 days ago

Why does New York state sue its college students? Thousands have been taken to court, and can defend themselves only in Albany — even if they live hundreds of miles away? 
This article can be found at Hechinger Report at

1 week 5 days ago

Clark Howard shares some advice on how to improve credit scores.
In order to improve your credit score, it is important to understand the factors that go into calculating your score. The chart below shows the 5 factors that go into improving credit. It also shows how much each factor matters when it comes to improving credit scores.
Credit Score FactorsPayment History– This factor is the most important factor. “Not paying your bills on time can do serious damage to your credit score. Even if you’ve had some late payments in the past, you can improve your score going forward by paying each and every bill on time. Not paying your bills on time can do serious damage to your credit score. Even if you’ve had some late payments in the past, you can improve your score going forward by paying each and every bill on time.”
Amounts Owed– This is the second most important factor. This factor is calculated as a percentage. “The amount you owe divided by the total amount of credit you have available. It’s best to keep this under 30% — even better if you can keep it under 10%. So if your total credit line (between all of your credit cards and other loans) is $10,000, it’s good to owe less than $3,000 and great if you owe less than $1,000.”
Length of Credit History– The next most important factor is how long you’ve had credit. “This is determined by the date you opened your oldest credit account that’s still active. Since you can’t go back in time and open an account any earlier, the most important thing you can do in this area is to make sure you don’t close any of your old accounts.”
New Credit & Credit Mix– New credit & the type of credit amount for 10% each. New credit is credit that you’ve recently applied for. Any time you apply for credit, your score will drop. It won’t take long to recover. Just remember to only apply for credit you really need. “Your credit mix refers to the different types of credit you have.” Someone with just credit cards will be less favorable than someone with credit cards, a mortgage, and a car loan.
Bankruptcy is also a fast way you can fix your score! How? Click here to find out more!
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