Blogs

6 years 5 months ago

Debts that Survive a Chapter 13 BankruptcyThere are certain debts that are discharged regardless of whether a Chapter 7 or a Chapter 13 is filed. Discharged means that you will no longer be responsible for repaying them once the bankruptcy is over. In a Chapter 7 you will not have to repay any portion of the debts unless there are unexempt assets that the trustee divides among your creditors. In a Chapter 13 the repayment plan will most likely provide for some portion of the debts to be paid back. If you complete the plan successfully, the remaining unpaid debt will be discharged.Regardless of which chapter of bankruptcy you file, certain debts will be discharged with exempt of the portion paid back as mentioned above. These types of debts include credit cards, medical bills, some lawsuit judgments, obligations under leases and contracts, personal loans and promissory notes.Debts that survive a Chapter 13 bankruptcy no matter what include:

  • Domestic Support Obligations
  • Criminal Penalties
  • Certain Taxes
  • Intoxicated Driving Debts
  • Debts Arising from Willful or Malicious Actions
  • Debts or Creditors You Do Not List

Debts that are discharged in a Chapter 13, not Chapter 7 include:

  • Marital debts created in a divorce settlement (unless they are determined to be support)
  • Debts incurred to pay nondischargeable tax debts
  • Court fees
  • Condo fees incurred after the bankruptcy filing date
  • Debts for loans from a retirement plan
  • Debts that could not be discharged in a previous bankruptcy due to failure to received discharge

You can convert from one chapter of bankruptcy to another. When you convert, you are then subject to the dischargeability rules of the chapter to which you converted, not the chapter you started out in. There are many reasons you might convert from one chapter to another. Reasons include: inability to complete a Chapter 13 plan, abuse found by the court of a chapter 7 requiring conversion to a Chapter 13. You may also convert because it is determined that some of your debts are only discharged in a Chapter 13 and not a Chapter 7.Dischargeability of debts can be an complicated issue and should not be determined by this non-exhaustive list of some of the debts that are not discharged. If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for your situation. 


6 years 5 months ago

How Will the Bankruptcy Affect Me? I am Filing Bankruptcy: Will I Lose My Job? No employer may fire you because you filed bankruptcy. In addition, an employer cannot discriminate against you in other terms and conditions of employment; reducing salary, demoting you, or taking away responsibilities because of a bankruptcy. However, if there are other valid reasons for taking these actions, then the bankruptcy will not protect you. Simply put, if an employer wants to take action against you, they can as long as there are other valid reasons such as incompetence, tardiness, or dishonesty.How does my Employer Find out About the Bankruptcy?Typically if you are filing a Chapter 7, your employer rarely finds out. However, if you have been sued and are having your wages garnished, your employer is notified. The bankruptcy stops that garnishment, so again your employer is notified in order to stop the garnishment. If you file a Chapter 13, your employer typically will receive notice. In a Chapter 13 plan it is likely that the Judge will order that your Chapter 13 plan payments be deducted from your paychecks and sent directly to the trustee. In order to accomplish this, your employer or at least the payroll department is notified of how much money to withhold and where to send the funds.Do I have to do a wage order for my Chapter 13?The simple answer is that is depends. You may not like the idea of the wage order, however the order will make the plan easier to complete. The success rates of Chapter 13 cases is higher where the Debtor has a wage order for their Chapter 13 plan payments over Debtors who pay the trustee themselves. The very obvious explanation is that it is hard to spend money that you never see meaning that if you employer is deducting the payment from your check and mailing it directly to the trustee then you are not tempted to use a portion of the money for other purposes.Can Bankruptcy Effect Child Custody?There is no reported evidence of a parent losing custody because of a bankruptcy. Bankruptcy and divorce are so often related these days that one often times follows the other. Family law and bankruptcy are being to overlap in many ways requiring bankruptcy attorneys and Judges to know more about family law and vice versa.  However, keep in mind that bankruptcy does NOT relieve you of child support or alimony obligations.  


6 years 5 months ago

Why Do I Have to Take a Pre-Filing Bankruptcy Class and a Pre-Discharge Class? Why do I have to complete a pre-filing class? Before your bankruptcy can be filed, you must complete a credit counseling session. The cost ranges from $10.95-$50.00. The agency provides a certificate of completion that must be filed with the bankruptcy petition, schedules, and statements. The course is available online, over the phone, and through the mail. The agency must be approved by the U.S. Trustee.The alleged purpose of the credit counseling is to give you an idea as to whether you need to file bankruptcy or whether a payment plan with your creditors would suffice to get you back on your feet. However, the counseling is required even if it is obvious that a repayment plan will not work for your situation. This is usually the case when your debt is high and your income is low or you are facing balances on debts with inflated interest rates and penalties.The requirement is that you complete the counseling but does not require that you follow the counseling’s recommendation. Even if a repayment plan is feasible, you are not required to agree to it.Why do I have to complete a pre-discharge class? You are required to take an approved personal finance course before the court will discharge your debts in a Chapter 7 or Chapter 13. The agencies providing this service must be approved by U.S. Trustee. In a Chapter 7 the course is to be completed within 45 days after the date on which the creditors meeting was scheduled.  If you miss the deadline the court may close the case without a discharge of your debts. That means you will have to pay to reopen the case so that the course certificate can be filed in order to receive a discharge.If you are considering bankruptcy, contact our office for a free consultation to meet with one of our attorneys to determine if bankruptcy is right for your situation.What is the cost of each course?The cost varies depending on which company you chose to go with. The typically range from $10.95-$50.00 depending on which company and which method to take the class. Online classes are cheaper than the phone course. Some companies may also have financial aid meaning that depending on income, they may waive the fee for taking the course. 


6 years 5 months ago

Casey Anthony BankruptcyBringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for April 09, 2013 Bankruptcy trustee wants to sell Casey Anthony’s life story Doctors driven to bankruptcy Greensboro mayor is $10.8 million in debt, bankruptcy records show


6 years 5 months ago

Penn Foster BankruptcyFor consumers considering bankruptcy protection, you may be unaware of the credit counseling requirement needed in order to file your petition.  There is also a financial management courses that are required in order for debts to be successfully discharged.  Many may not be fully aware of the second course requirement since it is different from [...]


6 years 5 months ago

New York Judgments Frozen Bank Account ExemptionsWhen you’ve got a judgment against you, collection gets scary. For New Yorkers, there’s some relief.
When people call me for help with their bill problems it’s usually because they’re scared of a judgment.
The fear doesn’t stem from the actual lawsuit from a creditor, but rather the efforts that creditor can take after the lawsuit is completed.
Wage garnishments, bank account freezes and the prospect of being penniless are powerful motivators when it comes to clearing up bill problems.
Luckily, the law’s on your side this time.

New York Exempt Income Protection Act
Once upon a time, a creditor with a judgment against you could lock up your entire bank account as a way of enforcing the judgment. A little known New York law called the Exempt Income Protection Act prevents that from happening.
The Exempt Income Protection Act prevents judgment creditors from taking certain funds in bank accounts to satisfy money judgments. It’s not a cure-all, but it does take some of the heat off you as you plan your next move for getting out of debt.
What’s Protected?
Under the EIPA, the following funds cannot be frozen:

  • The first $1,740 in any bank account;
  • The first $2,500 in any bank account received within 45 days from the following sources:

    • Social Security benefits
    • Supplemental security income (SSI)
    • Disability benefits
    • Child support payments
    • Worker’s Compensation benefits
    • Veterans Administration benefits
    • Railroad Retirement benefits
    • Public or private pension payments
    • Unemployment benefits
    • Public assistance

If your account contains less than the amount you can exempt, then the restraining notice sent by the creditor to the bank is considered void – in other words, the bank gets to rip it up and ignore it.
Beware The Exceptions
Don’t jump for joy yet – the exemptions have exceptions.  If the State of New York, or any of its agencies or municipal corporations, is the judgment creditor then all of your funds can be frozen. In addition, if the debt being enforced is for child support, spousal support, maintenance or alimony then the exemption doesn’t apply either.
For that reason, it’s important to take a look at the debt collection lawsuit as well as the judgment carefully.
The EIPA Doesn’t Solve Your Problem
You probably can’t live off the amount of money excepted under the EIPA, so it’s not going to solve the problem of having a judgment against you.
It doesn’t prevent a judgment creditor from taking a portion of your income to pay off the debt.
The interest on the judgment continues to pile up.
And if you’re like most of my clients, this isn’t the only debt you’ve got.
With that in mind, remember that the EIPA is designed to give you some breathing room so you can take stock of your situation and figure out the best course of action to work through your bill problems. For some people, negotiating with the creditor is the right solution. For others, bankruptcy makes sense. And for a very few, allowing the creditor to collect on the judgment through a wage garnishment is going to cause the least financial pain.
Regardless, the EIPA gives you the opportunity to sit down with a lawyer and map out a course of action.
Image credit:  rofltosh
Bank Account Frozen? For New Yorkers, There’s Hope. was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.


6 years 5 months ago

By Mary Ann Pekara
In Tampa this afternoon arguments will be heard in the Casey Anthony bankruptcy case as to whether or not Casey Anthony's life story can be considered property or not.
Last month, Stephen Meininger, the bankruptcy trustee handling Anthony's case, filed a motion that essentially said her life story could be used to pay her off her debt.
In the motion, "the Property" included details of Anthony's childhood (which includes allegations of sexual abuse by her father) as well as the disappearance and death of her daughter, Caylee.
Anthony's attorneys disagree on the basis that such a thing would be invading her constitutional rights and "private thoughts." They say the motion "should be denied because the 'property' that the Trustee seeks to sell does not exist."
"By allowing property that can only be created by post-petition labor to be sold as part of the bankruptcy estate, a debtor would never be able to achieve a "fresh start," the filing says. "Perhaps more troubling, the Order sought by the Trustee would result in the judicial invasion and taking of thoughts and memories that have not been memorialized but are contained solely within the debtor's mind. This is a terrifying Orwellian prospect that would destroy the long-standing protections guaranteed by the Bankruptcy Code."
A $10,000 bid was made on the story by James Schober, an attorney in Texas, who wants to prevent the story from ever getting out. This would stop Anthony from ever making a profit on her life story.
Meininger thinks auctioning off Anthony's story to the highest bidder would best maximize the value for those Anthony owes in her bankruptcy filing, listing over $792,000 in debt.
Anthony, 27, has been unemployed and living with friends since she was acquitted of her daughter's death in 2011. She has yet to share her side of the story.


6 years 5 months ago

Despite the image and stigma associated with bankruptcy, financial reorganization of failing businesses (and nonprofit organizations) through Chapter 11 bankruptcy is actually helping the economy by giving companies a chance to find new financing, reject onerous contracts, renegotiate leases, and expedite the sale of assets.

Harvard Business School recently published an article reviewing comments made by Stuart C. Gilson, a Harvard business professor and advocate of Chapter 11 bankruptcies in his new book, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." Gilson believes that the first step is getting the public to realize that Chapter 11 is not about "dying companies," but about "reviving" them.

During the financial crisis of 2008, debt restructuring and Chapter 11 played a heroic role in reviving the US economy. Not only does it speed up a company's reorganization process, but it focuses in on what is necessary to "rehabilitate" the company rather than focusing solely on paying back creditors and stakeholders. (US bankruptcy laws differ from other countries in that they strive to restore the companies facing bankruptcy in order to make them viable and competitive rather than simply liquidating them.)

Restoring Chapter 11's Image

Chapter 11 was often seen as slow and expensive, however, it is emerging and evolving in a way that allows "managers and financiers to work with companies facing bankruptcies and deal with them effectively and appropriately."

For example, one of the ways Chapter 11 is evolving is through the use of the "prepackaged bankruptcy." A "prepackaged bankruptcy" combines the traditional notions of a Chapter 11 bankruptcy while incorporating "out-of-court" restructuring. Companies are able to negotiate restructuring plans with creditors to give them assurance that once they file the actual bankruptcy, the creditors all will be on the same page.

Allowing for prepackaged bankruptcies gives companies the flexibility and assurance from creditors that they will "vote for the restructure plan once the firm officially enters into chapter 11." By choosing this path, it allows companies a chance to "avoid the steep costs associated with spending [time] in bankruptcy court."

Another emerging frequent use of Chapter 11 is for a bankrupt company to sell its assets in a competitive auction that is supervised by the courts under Section 363 of the Bankruptcy Code. Companies who utilize this option can expedite the sell-off of their assets free and clear.

In addition to expedited asset sell off, Chapter 11 gives companies other options for generating income. During Chapter 11, the company pays no interest on any "pre-bankruptcy debts," they can "reject unprofitable leases" and "new lenders are given priority in the capital structure" using what is known as "debtor in possession financing" by new lenders gain super priority and stand ahead of pre-existing creditors. This priority encourages banks and other lenders to lend to companies in Chapter 11 rather than discourage it.

Should My Company Seek Advice From a Bankruptcy Attorney?

Chapter 11 is changing and becoming an integral part in saving US companies and the economy. If you feel your company or organization could benefit from filing for Chapter 11 it is advisable to speak with an attorney, and in particular an attorney familiar with bankruptcy practice in Maryland, Virginia and Washington, DC. An attorney will evaluate your company's situation and determine whether you would benefit from reorganizing. Additionally, an attorney will aid you throughout the process as well as assist you through the restructuring process to meet your goals.


4 years 9 months ago

Despite the image and stigma associated with bankruptcy, financial reorganization of failing businesses (and nonprofit organizations) through Chapter 11 bankruptcy is actually helping the economy by giving companies a chance to find new financing, reject onerous contracts, renegotiate leases, and expedite the sale of assets.

Harvard Business School recently published an article reviewing comments made by Stuart C. Gilson, a Harvard business professor and advocate of Chapter 11 bankruptcies in his new book, "Creating Value Through Corporate Restructuring: Case Studies in Bankruptcies, Buyouts, and Breakups." Gilson believes that the first step is getting the public to realize that Chapter 11 is not about "dying companies," but about "reviving" them.

During the financial crisis of 2008, debt restructuring and Chapter 11 played a heroic role in reviving the US economy. Not only does it speed up a company's reorganization process, but it focuses in on what is necessary to "rehabilitate" the company rather than focusing solely on paying back creditors and stakeholders. (US bankruptcy laws differ from other countries in that they strive to restore the companies facing bankruptcy in order to make them viable and competitive rather than simply liquidating them.)

Restoring Chapter 11's Image

Chapter 11 was often seen as slow and expensive, however, it is emerging and evolving in a way that allows "managers and financiers to work with companies facing bankruptcies and deal with them effectively and appropriately."

For example, one of the ways Chapter 11 is evolving is through the use of the "prepackaged bankruptcy." A "prepackaged bankruptcy" combines the traditional notions of a Chapter 11 bankruptcy while incorporating "out-of-court" restructuring. Companies are able to negotiate restructuring plans with creditors to give them assurance that once they file the actual bankruptcy, the creditors all will be on the same page.

Allowing for prepackaged bankruptcies gives companies the flexibility and assurance from creditors that they will "vote for the restructure plan once the firm officially enters into chapter 11." By choosing this path, it allows companies a chance to "avoid the steep costs associated with spending [time] in bankruptcy court."

Another emerging frequent use of Chapter 11 is for a bankrupt company to sell its assets in a competitive auction that is supervised by the courts under Section 363 of the Bankruptcy Code. Companies who utilize this option can expedite the sell-off of their assets free and clear.

In addition to expedited asset sell off, Chapter 11 gives companies other options for generating income. During Chapter 11, the company pays no interest on any "pre-bankruptcy debts," they can "reject unprofitable leases" and "new lenders are given priority in the capital structure" using what is known as "debtor in possession financing" by new lenders gain super priority and stand ahead of pre-existing creditors. This priority encourages banks and other lenders to lend to companies in Chapter 11 rather than discourage it.

Should My Company Seek Advice From a Bankruptcy Attorney?

Chapter 11 is changing and becoming an integral part in saving US companies and the economy. If you feel your company or organization could benefit from filing for Chapter 11 it is advisable to speak with an attorney, and in particular an attorney familiar with bankruptcy practice in Maryland, Virginia and Washington, DC. An attorney will evaluate your company's situation and determine whether you would benefit from reorganizing. Additionally, an attorney will aid you throughout the process as well as assist you through the restructuring process to meet your goals.


6 years 5 months ago

official notice of mortgage foreclosureGeorgia foreclosure law allows lenders to start and complete the mortgage foreclosure process in as little as 37 days.  This means that just over a month from the start date of the foreclosure, you may lose all title interest in your home.With very limited exception, lenders in Georgia do not have to go to court to foreclose on your home.  Georgia law permits non-judicial foreclosure, which means that if you go into default, the mortgage company or bank needs only to send you a written notice of intent to foreclosure, then advertise the pending sale for four (4) weeks in the legal newspaper for the county where the property is located.By contrast, other states like Florida, Illinois and Ohio use a judicial foreclosure procedure where the lender must file a lawsuit against you, win a judgment allowing for a foreclosure then conduct the sale.  In these other states, a title transfer might not happen for 8 months to a year.Foreclosure sales in Georgia are conducted on the courthouse steps of the county where the property is located.  These sales occur only on the first Tuesday of each calendar month and consist of live auctions conducted by mortgage company lawyers.In many cases, the foreclosing back “buys” the property at the courthouse steps sale.  Any buyer would have to pay off any first mortgage so an investor would not be interested in a property where there is no equity.  Since property values have fallen in Georgia over the past few years many sales result in the bank or mortgage company taking title back.So, let’s assume that today is Wednesday and your house was sold on the courthouse steps yesterday (foreclosure Tuesday).  What happens?Usually, nothing happens, at least right away.  Under Georgia law, you have lost your title interest in your property and now you are considered a tenant at sufferance.  As long as you do not abandon the property, the new owner cannot use self help to take possession of the property.If the new owner was to forcibly change the locks, or worse, dispose of your property, you might have a claim for damages against the new owner.Usually, the new owner will contact you within a few days of the foreclosure sale to request that you move.  Some owners will offer “cash for keys” – usually a few hundred dollars to move and avoid an eviction.Other owners will file an eviction, which is a type of lawsuit that seeks a court order terminating any leasehold rights.  If you ignore the eviction or if you go to court and lose, the judge will issue an order of eviction and within a few days, the sheriff’s office will show up at your home and physically remove you and your possessions, putting your stuff on the street.I have seen a few cases where a homeowner answers the eviction proceeding by asserting a counterclaim that arises from a wrongful foreclosure claim.  A foreclosure may be wrongful if the lender did not give you proper notice, or if the lender did not properly credit you with payments.  Wrongful foreclosure actions can take months or even years to work their way through the court system – in this type of situation, the lender will most likely ask the court to require you to pay a monthly sum into the court registry as rent.My good friend and real estate expert Marc Oppenheimer recently testified as an expert witness in a case where a foreclosed homeowner is challenging the foreclosure but has not been paying rent.  The judge in the eviction proceeding accepted Marc’s testimony about what constitute reasonable rent for this particular home and the now former owner was ordered to pay monthly “rent” into the court registry while the wrongful foreclosure action proceeds in Superior Court.Bankruptcy can stop the eviction proceeding – sometimes permanently and sometimes temporarily – we’ll discuss that in a future post.Often, foreclosed homeowners can strike deals with foreclosing lenders whereby the homeowner has time to leave, cash to cover expenses and certainty as to what will happen.  If you are facing foreclosure, please call my office to discuss your options and the steps you can take to make the best of a bad situation.The post Home Foreclosed? Here’s What Happens Next appeared first on theBKBlog.


Pages