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If you are a California resident who is struggling financially due to unemployment, it may be time to consider filing for bankruptcy, which can help you get a fresh start by reducing or eliminating many of the debts that you owe. However, while unemployment may help you qualify for certain types of bankruptcy, lacking a job could prevent you from choosing others. Continue reading to learn more about how job loss and unemployment could affect your ability to file bankruptcy in California. Then, contact the Roseville Chapter 7 lawyers of The Bankruptcy Group for a free legal consultation about your financial options for getting debt relief.
Do You Need a Job to File Chapter 7?
According to the Bureau of Labor Statistics, about 4.1% of Americans are currently unemployed. However, California’s unemployment rate is slightly higher than the national average, hovering around 4.3% as of February 2018.
Without a regular source of income, many unemployed Californians struggle to keep current on their mortgages, utility bills, credit card bills, and other expenses. For many families and individuals, a single medical bill or auto repair is all that stands between relative stability and total insolvency.
Fortunately, it isn’t necessary to struggle day in and day out just to make ends meet. If you are experiencing financial hardship due to job loss or prolonged unemployment, bankruptcy could be a potential solution.
While there are many types of bankruptcy, most cases fall into one of two categories: Chapter 7, also called “liquidation,” or Chapter 13, also called “reorganization.” Both provide debt relief, but through drastically different financial approaches. Therefore, unemployment may be an advantage in Chapter 7, yet a hindrance in Chapter 13. Our Rocklin Chapter 7 attorneys will begin by discussing Chapter 7 bankruptcy and unemployment. To read more about unemployment and Chapter 13, scroll down to the next section of this article.
You do not need a job to file for Chapter 7 in California. In fact, being unemployed can actually help you qualify for Chapter 7 due to a step of the bankruptcy process called “means testing.”
As the name implies, means testing measures (tests) your financial ability (means) to repay your creditors. If your household income falls below the California median income for a household of equivalent size – something which is more likely to occur if you are unemployed – you pass the means test and may therefore file for Chapter 7.
Because means testing considers your gross income over the past six months, it may be strategic to temporarily delay filing if the job loss occurred recently. If liquidation bankruptcy is appropriate for your situation, our Elk Grove Chapter 7 lawyers can help you determine the right time to file.
Can You File Chapter 13 if You Are Unemployed?
Technically speaking, you do not need a job to file for Chapter 13 in California. However, unemployment can become a major obstacle in Chapter 13, and could potentially prevent you from successfully completing the Chapter 13 process in Sacramento, Roseville, Elk Grove, Rocklin, or elsewhere in California. To understand why, you need to have some background about how Chapter 13 bankruptcy works.
In Chapter 13, debtors create a financial plan, known as a “reorganization plan,” with assistance from a Chapter 13 bankruptcy attorney. The purpose of the plan, which must be approved by the bankruptcy court, is to establish an agreement between you (the debtor) and the individuals or entities to whom you owe debts (your creditors). The plan, which lasts from three to five years depending on your financial situation, organizes your debts based on their importance, ensuring that priority debts, such as child support, and debts that are secured by collateral, such as auto loans, are the first to be repaid.
In order for a Chapter 13 debtor to continually stay current with his or her reorganization plan, which generally calls for monthly payments, the debtor must have sufficient disposable income – which is where unemployment can pose a problem. If the court determines that you lack enough disposable income to manage a reorganization plan successfully, you may need to file Chapter 7 instead. However, if you can demonstrate that you have adequate income from sources other than a job – for instance, Social Security benefits or money you’ve made by investing – you may be able to file Chapter 13 while unemployed.
California Bankruptcy Attorneys Can Help You Get Debt Relief
Unemployment does not necessarily have to prevent you from filing bankruptcy. If you are out of a job and need help clearing away your debts, personal bankruptcy could be a viable strategy. Depending on which type of bankruptcy you file, which exemptions you use, and other factors in your case, you could achieve financial goals like saving your home from foreclosure, getting caught up on past-due car payments, or delaying service shut-offs from nonpayment. Additionally, getting your debts under control can give you the freedom and flexibility to start building better credit in the future.
If you are unemployed, bankruptcy may offer financial hope. To learn more about whether Chapter 7 or Chapter 13 could be right for your situation, contact our Roseville bankruptcy attorneys online for a free consultation, or call us at (800) 920-5351.
The post Can You File Bankruptcy if You Are Unemployed in California? appeared first on The Bankruptcy Group, P.C..
If you are a California resident who is struggling financially due to unemployment, it may be time to consider filing for bankruptcy, which can help you get a fresh start by reducing or eliminating many of the debts that you owe. However, while unemployment may help you qualify for certain types of bankruptcy, lacking a […]
The post Can You File Bankruptcy if You Are Unemployed in California? appeared first on The Bankruptcy Group, P.C..
The March 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are James Shenwick’s comments about those sales results.
1. The volume of sales continues to remain low. In March, there were only 29 taxi medallion sales (excluding stock transfers).2. 14 of the 29 sales (almost half) were foreclosure or estate sales, which means that either: (1) the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion or; (2) the medallion owner died, and the estate was selling the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value). An additional transfer was from an individual to an LLC for no consideration, which we have also excluded from our analysis.3. The 14 regular sales they ranged from a low of $163,333 (four medallions), to six medallions at $180,000, to two medallions at $225,000, and two medallions at the higher end of the price scale at $300,000 and $350,000.4. The low sales volume seems to indicate that at this stage of the market, not many parties are involved in selling or buying medallions, possibly due to the fear that medallion prices may further decrease.5. The median of March’s sales was $180,000, a $17,500 (9 %) decrease from February’s median sales of $197,500.6. However, politicians have spoken recently about capping the number of ride–share app drivers and/or instituting congestion pricing in Manhattan – either of these measures would stabilize or increase the price of medallions.
Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at j[email protected].
By Danielle D'Onfro
Nestled among several potential blockbuster cases in the court’s penultimate week of argument this term, there’s a quiet personal bankruptcy case. The case, Lamar, Archer & Cofrin, LLP v. Appling, ostensibly concerns the breadth of the word “respecting” in the Bankruptcy Code.
But in simpler terms, the case is about how the Bankruptcy Code treats dishonest debtors. The goal of consumer bankruptcy is giving debtors a “fresh start” so that they can get on with their lives despite past financial missteps. The Bankruptcy Code does this by discharging debtors’ personal responsibility to repay many, but not all, obligations incurred before they filed their bankruptcy petitions. Of course, relieving debtors of their obligations necessitates that their creditors bear losses.
And that result, in turn, has its own ripple effects throughout the economy — from increasing the cost of credit for everyone to further bankruptcies when a creditor cannot itself absorb the loss. The Bankruptcy Code thus balances the competing goals of providing individuals the relief they need and minimizing unfairness to creditors. One way the Bankruptcy Code does this is by limiting bankruptcy’s discharge to “honest but unfortunate debtors.” Debtors remain personally liable for any non-dischargeable debt even after the conclusion of their cases, meaning that they can face wage garnishment and any other method of collection authorized under state law.
This case arises from a dispute between Lamar, Archer & Cofrin, LLP, an Atlanta law firm, and one of its former clients, R. Scott Appling. Like many bankruptcy disputes, this one involves questionable financial and strategic choices by both parties. In 2004, Appling hired Lamar and another firm to represent him in a dispute against the former owner of his business. By March 2005, Appling’s bill had grown to $60,000, which he could not (or would not) pay at the time. He allegedly induced Lamar to continue working on the case by explaining that he was expecting a tax refund of approximately $100,000 that would enable him to pay the outstanding bill. Appling contends that he never promised that the refund would be that large, but merely represented his accountant’s best estimate. In fact, Appling received a far smaller tax refund in October 2005 and promptly spent the money on business expenses. According to Lamar, in November 2005 Appling claimed to still be waiting for his tax refund; Lamar thus kept working for Appling until June 2006, when the firm learned the truth. The firm sued and won a judgment for $104,179 in Georgia state court in October 2012.
Three months later, Appling filed for Chapter 7 bankruptcy and Lamar filed an adversary proceeding in the Middle District of Georgia, seeking a determination that Appling’s $104,000 outstanding bill was non-dischargeable under 11 U.S.C. § 523(a)(2)(A) because it was “obtained by fraud.” That case went to trial in September 2014, in order to resolve the parties’ competing accounts of two conversations that had occurred nearly a decade earlier.
The provision at issue is 11 U.S.C. §523(a)(2), which states: “A discharge … does not discharge an individual debtor from any debt … for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.” Then, §523(a)(2)(B) says: “(B) use of a statement in writing—(i) that is materially false; (ii) respecting the debtor’s or an insider’s financial condition; (iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive.” Whether one should read an “or” between §523(a)(2)(A) and §523(a)(2)(B) is one of the issues in this case.
The provision at issue is 11 U.S.C. §523(a)(2), which states:
(a) A discharge … does not discharge an individual debtor from any debt— …
(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—
(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition;
(B) use of a statement in writing—
(i) that is materially false;
(ii) respecting the debtor’s or an insider’s financial condition;
(iii) on which the creditor to whom the debtor is liable for such money, property, services, or credit reasonably relied; and
(iv) that the debtor caused to be made or published with intent to deceive.
Whether one should read an “or” between §523(a)(2)(A) and §523(a)(2)(B) is one of the issues in this case.
Appling filed a motion to dismiss, arguing that his debt did not fall within the exception under Section 523(a)(2)(A) because the alleged misrepresentation was a “statement respecting [his] financial condition.” The bankruptcy court denied the motion, reasoning that the term “statement respecting the debtor’s . . . financial condition” covers only statements about a debtor’s “overall financial condition or net worth.” Because Appling allegedly lied about a single asset — his tax refund — he did not lie about his overall financial condition. The court did not grapple with Section 523(a)(2)(B).
The U.S. Court of Appeals for the 11th Circuit reversed, joining the U.S. Court of Appeals for the 4th Circuit in holding that a statement about a single asset could be a statement respecting the debtor’s financial condition. It went on to find that Lamar could not bring a claim because Section 523(a)(2)(B) provides that misrepresentations about the debtor’s financial condition are only non-dischargeable if made in writing. The Supreme Court granted certiorari on the question of “whether (and, if so, when) a statement concerning a specific asset can be a ‘statement respecting the debtor’s … financial condition’ within Section 523(a)(2).”
In their briefing, the parties offer strikingly different interpretations of Section 523(a)(2). Lamar argues that the Supreme Court should follow the U.S. Courts of Appeals for the 8th, 10th and 5th Circuits and hold that statements about a single asset are not statements respecting the debtor’s financial condition. Under this view, only misrepresentations about the debtor’s overall personal balance sheet fall within Section 523(a)(2)(A)’s exception (really, the exception to the exception, because dischargeability is the norm).
Appling, for his part, contends that whatever statements he may have made about the tax refund were statements respecting his overall financial condition and therefore fell within the exception. He rests his argument on the ample precedent interpreting terms like “respecting” and “relating to” broadly. A group of law professors, represented by the Institute of Bankruptcy Policy, make a third, and perhaps more appealing, argument in an amicus brief supporting Appling. They maintain that this case need not test the boundaries of “respecting” because Appling actually intended to talk about his financial condition — his ability to pay his bills as they came due — when he spoke about his tax return.
Although the current Bankruptcy Code dates only to 1978, Congress built the code on nearly a century of prior bankruptcy practice. Both parties argue that this historical practice militates in favor of their desired reading of the statute, but Appling’s amici have the more sophisticated argument.
They argue that Section 523(a)(2)(A) in the 1978 Code merely re-enacted provisions from the Bankruptcy Act of 1898, as amended in 1903, 1926 and 1960. The 1903 and 1926 amendments to the code codified the discharge exception, they argue, but limited it to cases in which the debtor made a written misrepresentation. Consumer lenders, being a creative lot, realized that their debt would be non-dischargeable if the debtor lied in the origination process, and so they began requiring debtors to sign forms misrepresenting their assets in the origination process. Congress attempted to fix this problem in 1960 when it provided that false written financial statements regarding a debtor’s financial condition were not a basis for denying a discharge unless the lender actually relied on the falsehood. Before Congress replaced these provisions with Section 523(a)(2) in 1978, the weight of the case law held that a statement about any one of a debtor’s assets could be a statement about the debtor’s financial condition.
If Congress meant to incorporate this case law, then, many statements about a debtor’s assets would qualify under the exception to non-dischargeability. This interpretation is appealing in practical terms: If a homeowner says “my house is in foreclosure,” the listener knows something about that homeowner’s overall financial condition, just as she does if the same homeowner says “my net worth is a million dollars.” Lamar responds, though, that this approach stretches the word “respecting” too far, arguing that it “takes a sledgehammer” to the well-established principle that debt obtained by fraud is non-dischargeable.
Depending on how it resolves the main issue in the case, the court may also need to decide how Section 523(a)(2)(B)’s “use of a statement in writing” language fits with Section 523(a)(2)(A)’s exception to non-dischargeability. Appling and the 11th Circuit treat this provision as an exception to the exception to the exception: Written fraudulent statements about the debtor’s financial condition on which the creditor relies render a debt non-dischargeable. In its opinion, the 11th Circuit explained that this rule “may seem harsh after the fact, especially in the case of fraud,” but “it gives creditors an incentive to create writings before the fact, which provide the court with reliable evidence upon which to make a decision.” The 11th Circuit’s reading seems like the most plausible interpretation of the statutory text. At the same time, though, it raises some difficulties. Lamar argues that this reading involves the court substituting its own policy preferences for those of Congress. Indeed, the 11th Circuit’s view is somewhat difficult to square with the very problem that the 1960 amendment sought to fix: shady lenders encouraging borrowers to falsify documents to render their debts non-dischargeable. Moreover, Lamar’s amicus, the National Federation of Independent Business Small Business Legal Center, raises additional states’ rights concerns, calling this reading an encroachment on the states’ prerogative to create their own statutes of frauds.
Frankly, it is surprising that the Supreme Court even chose to hear this case. Although the case largely turns on a legal question, the parties still seem to be fighting about factual premises, arguing about who said what to whom 10 years before the trial. That said, it is good to see the court willing to tolerate a slightly messy vehicle to bring much-needed clarity to the Bankruptcy Code, especially because, as I’ve observed before, messy vehicles are the norm in the bankruptcy world.
By Jillian Berman
A recent court ruling may offer hope for thousands of struggling borrowers looking to escape education-related debts.
A Texas bankruptcy judge denied a request by student loan company, Navient, last month to dismiss a class-action lawsuit accusing the firm of illegally collecting on loans that were discharged in bankruptcy. Navient is appealing.
Patricia Christel, a spokeswoman for the Navient, declined to comment on pending litigation, but noted in an email that the company supports reform “that would allow federal and private student loans to be dischargeable in bankruptcy for those who have made a good-faith effort to repay their student loans over a five-to-seven year period and who still experience financial difficulty.”
The decision last month means the case can move forward and it also offers the opportunity for an appellate court to weigh in on whether loans historically viewed as exempt from bankruptcy discharge can actually be wiped away in the process.
“This is one to watch for potential,” said John Rao, an attorney at the National Consumer Law Center and expert on consumer bankruptcies.
The ruling comes as lawyers across the country are increasingly looking to challenge the conventional wisdom that any type of student loan isn’t dischargeable in bankruptcy. It also comes as the Department of Education is reviewing the high standard student loan borrowers must meet in order to have their debts discharged in bankruptcy.
This case centers around a very specific type of debt — and a small share of Navient’s private loan portfolio — money loaned to borrowers to pay for unaccredited programs, such as bar exam study courses and K-12 educational expenses. The lawyers representing the class estimate that about 16,000 borrowers fall into this category, according to Austin Smith, one of those attorneys.
But if the appellate court rules in favor of the plaintiffs that could indicate that borrowers with similar loans from other companies could also be entitled to relief. “If I were advising other companies who have these loans and have taken similar positions as Navient — I would be worried,” said Dalié Jiménez, a professor of law at the University of California-Irvine’s School of Law.
Reasons for student loans to be exempt from discharge in bankruptcy
To discharge a loan in bankruptcy, they must fall into one of four categories:
1. A federal student loan.
2. A student loan made by a qualified nonprofit (say, by a school).
3. A qualified education loan, which could be made by a for-profit company, but would need to be made for qualified educational expenses; in other words, those incurred at an accredited program for the cost of attendance.
4. Funds received as an “educational benefit.”
Traditionally, bankruptcy courts have determined that the types of loans in question in this case can’t be discharged because they were received as an “educational benefit.” But recently, lawyers and judges have started to question whether loans to help borrowers study for the bar and other similar debts truly fit into that category.
“It does definitely reflect a trend of this kind of decision,” Rao said of the recent ruling.
In his order, the judge argues that the phrase “educational benefit,” likely refers to something different from simply a loan used for educational expenses. And, instead, refers to arrangements like money fronted by an employer for a worker to attend college that would need to be repaid if that employee leaves their job.
“By its use throughout [the provision], Congress was certainly aware of the term “loan” and is presumed to have made a conscious decision of when to use it and when to choose something different,” the order reads. The legislative history of funds with ‘educational benefit’ That rationale appears to be in line with the legislative history of the educational benefit term, according to a recent paper by Jason Iuliano, a fellow at the University of Pennsylvania School of Law. The paper argues that — by viewing funds received for educational benefit to mean loans — judges have been interpreting the educational benefit language too broadly. Iuliano notes that during congressional hearings around the time the language was added, an expert explained to members of Congress that it was meant to only exempt conditional grants from being discharged in bankruptcy. “It was an effort to stop this very, very narrow category of exceptions,” Iuliano said. “It just ballooned up to cover pretty much anything you can make a case that advances one’s education.”Judges have been using this broader interpretation in part because it’s been so rarely challenged historically, Iuliano said. Because of the popular narrative that student debt is impossible to discharge in bankruptcy, it’s extremely rare for debtors to actually attempt to do so. What’s more, lawyers have also historically shied away from representing student loan borrowers trying to discharge their debt in bankruptcy, Iuliano said.
Now that’s starting to change, said Rao. As more lawyers are beginning to challenge whether these debts are dischargeable in bankruptcy, judges are now hearing and carefully considering both arguments, he said. “Judges are not just going to automatically assume that the loan is entitled to this protection from discharge,” Rao said.
Of course, the case is far from over. And Iuliano notes that even if the judge rules in a way that’s the most favorably possible to the debtors, the ruling would still only cover a fraction of borrowers or those with these very specific types of loans from this company. Still, he said there’s reason to believe these borrowers tend to be worse off than others with student loans and so it would help those who are struggling the most.
“There’s probably a large swath of people that this applies to that they could get some fairly immediate relief,” Jiménez said.
Copyright © 2018 MarketWatch, Inc. All rights reserved.
When deciding to file bankruptcy, Portland residents should consider several factors, including which type of bankruptcy petition to file, when to file it for maximum protection from creditors and how much of your property you can keep. Finding the appropriate Portland Bankruptcy Attorney can make the difference of having a smooth filing or the opposite.
Portland bankruptcy attorneys can be an invaluable resource in helping you work through these and other important issues. Although you are not required to use a lawyer to file bankruptcy, the Oregon Bankruptcy Court notes that it would be very difficult for someone without an experienced Portland bankruptcy lawyer to succeed in bankruptcy court.
Your Portland bankruptcy lawyer can explain your legal options, guide you through the bankruptcy process and advocate on your behalf when meeting with creditors and the bankruptcy trustee. This article will explain how an Portland bankruptcy lawyer can assist with your bankruptcy filing.
Which Form of Oregon Bankruptcy Is Right for You?
The first thing your Portland bankruptcy lawyer will help you to determine is whether to file a Chapter 7 or a Chapter 13 type of bankruptcy. These names refer to the United States Bankruptcy Code, and each type of bankruptcy has different rules.
In general, if you qualify under a means test that looks at your income and compares it to the amount you owe, you may be able to file Chapter 7 bankruptcy, which wipes out all of your debts. If you do not qualify under the means test, you will likely file a Chapter 13 bankruptcy, which requires you to pay back a portion of your debt over a period of several years. Your attorney can help you decide which type of bankruptcy you should file.
Understanding Oregon Bankruptcy Forms
There are many bankruptcy forms to be completed in filing an Oregon bankruptcy. Because Portland bankruptcy attorneys deal with these forms every day, they are in the best position to help you complete them. The courts are very tough about the information that must be provided, and incomplete or incorrect forms may cause your bankruptcy case to be dismissed or thrown out of court.
Your bankruptcy lawyer will ensure that the proper forms are filed with the court, that all necessary information is included and that you’ve supplied the appropriate supporting documents. If any filed forms need to be amended or modified, your lawyer can handle that as well.
Meeting With the Bankruptcy Trustee & Working With Creditors
Your Portland bankruptcy lawyer can help you prepare for your first meeting with the bankruptcy trustee and tell you what to expect there. He can then also go with you to the meeting, help you to make your best case and achieve the outcome you’re hoping for.
Your Portland bankruptcy attorney is also your best buffer if creditors illegally continue to try to collect money from you once your bankruptcy has been filed. Your attorney can handle notifying these creditors that they are in violation of the law and can ask the court to make the creditors stop contacting you.
Schedule a Free Consultation with Your Portland Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Portland, Oregon. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post How Can an Portland Bankruptcy Attorney Help You? appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
When deciding to file bankruptcy, Portland residents should consider several factors, including which type of bankruptcy petition to file, when to file it for maximum protection from creditors and how much of your property you can keep. Finding the appropriate Portland Bankruptcy Attorney can make the difference of having a smooth filing or the opposite.
Portland bankruptcy attorneys can be an invaluable resource in helping you work through these and other important issues. Although you are not required to use a lawyer to file bankruptcy, the Oregon Bankruptcy Court notes that it would be very difficult for someone without an experienced Portland bankruptcy lawyer to succeed in bankruptcy court.
Your Portland bankruptcy lawyer can explain your legal options, guide you through the bankruptcy process and advocate on your behalf when meeting with creditors and the bankruptcy trustee. This article will explain how an Portland bankruptcy lawyer can assist with your bankruptcy filing.
Which Form of Oregon Bankruptcy Is Right for You?
The first thing your Portland bankruptcy lawyer will help you to determine is whether to file a Chapter 7 or a Chapter 13 type of bankruptcy. These names refer to the United States Bankruptcy Code, and each type of bankruptcy has different rules.
In general, if you qualify under a means test that looks at your income and compares it to the amount you owe, you may be able to file Chapter 7 bankruptcy, which wipes out all of your debts. If you do not qualify under the means test, you will likely file a Chapter 13 bankruptcy, which requires you to pay back a portion of your debt over a period of several years. Your attorney can help you decide which type of bankruptcy you should file.
Understanding Oregon Bankruptcy Forms
There are many bankruptcy forms to be completed in filing an Oregon bankruptcy. Because Portland bankruptcy attorneys deal with these forms every day, they are in the best position to help you complete them. The courts are very tough about the information that must be provided, and incomplete or incorrect forms may cause your bankruptcy case to be dismissed or thrown out of court.
Your bankruptcy lawyer will ensure that the proper forms are filed with the court, that all necessary information is included and that you’ve supplied the appropriate supporting documents. If any filed forms need to be amended or modified, your lawyer can handle that as well.
Meeting With the Bankruptcy Trustee & Working With Creditors
Your Portland bankruptcy lawyer can help you prepare for your first meeting with the bankruptcy trustee and tell you what to expect there. He can then also go with you to the meeting, help you to make your best case and achieve the outcome you’re hoping for.
Your Portland bankruptcy attorney is also your best buffer if creditors illegally continue to try to collect money from you once your bankruptcy has been filed. Your attorney can handle notifying these creditors that they are in violation of the law and can ask the court to make the creditors stop contacting you.
Schedule a Free Consultation with Your Portland Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Portland, Oregon. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post How Can an Portland Bankruptcy Attorney Help You? appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
What can happen if you default on a federal student loan?
You are “in default” on your federal student loan if you have not paid in 270 days (approximately nine months). Your wages can be garnished or your tax refunds seized.
How do you stop seizure of your tax refunds?
You can request an offset refund, but there are limitations. Here are a few examples:
- You filed for bankruptcy and the case is still open, or the student loan was discharged in bankruptcy.
- You repaid the loan.
- The student loan is not yours – the Social Security number attached is incorrect.
- You are in a repayment agreement with the Department of Education and have started making payments as required.
- You are totally and permanently disabled.
- The loan isn’t enforceable.
If you fit the bill, you’ll need to complete a student loan tax offset hardship refund form and provide proof of your hardship. You also can contact the Treasury Offset Program at 800-304-3107 for more information.
What can happen if you default on a federal student loan?
You are “in default” on your federal student loan if you have not paid in 270 days (approximately nine months). Your wages can be garnished or your tax refunds seized.
How do you stop seizure of your tax refunds?
Tax refund seized
You can request an offset refund, but there are limitations. Here are a few examples:
- You filed for bankruptcy and the case is still open, or the student loan was discharged in bankruptcy.
- You repaid the loan.
- The student loan is not yours – the Social Security number attached is incorrect.
- You are in a repayment agreement with the Department of Education and have started making payments as required.
- You are totally and permanently disabled.
- The loan isn’t enforceable.
If you fit the bill, you’ll need to complete a student loan tax offset hardship refund form and provide proof of your hardship. You also can contact the Treasury Offset Program at 800-304-3107 for more information.
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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys. 
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post In Bankruptcy, but Tax Refunds Seized? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
What can happen if you default on a federal student loan?
You are “in default” on your federal student loan if you have not paid in 270 days (approximately nine months). Your wages can be garnished or your tax refunds seized.
How do you stop seizure of your tax refunds?
Tax refund seized
You can request an offset refund, but there are limitations. Here are a few examples:
- You filed for bankruptcy and the case is still open, or the student loan was discharged in bankruptcy.
- You repaid the loan.
- The student loan is not yours – the Social Security number attached is incorrect.
- You are in a repayment agreement with the Department of Education and have started making payments as required.
- You are totally and permanently disabled.
- The loan isn’t enforceable.
If you fit the bill, you’ll need to complete a student loan tax offset hardship refund form and provide proof of your hardship. You also can contact the Treasury Offset Program at 800-304-3107 for more information.
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post What Happens if You Default on a Federal Student Loan? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
By Sarah O'Brien
For people facing crushing debt, the weight of carrying it can seem unbearable. As bills go unpaid and debt collectors start calling, one nagging question might loom large: Would bankruptcy fix this?
Depending on the type of debt you face and the rest of your financial picture, the answer could be yes.
"Many people who file for bankruptcy probably never thought they would," said Harvey Bezozi, a certified financial planner and certified public accountant at The Tax Wizard in Boca Raton, Florida.
"It's freeing, but it definitely can be traumatic to do it."
An estimated 733,000 businesses and individuals are expected to wipe out or reduce their debt through bankruptcy in fiscal year 2018, according to the U.S. Trustees Program. That's far below the peak of 1.5 million filings in 2010, yet up from an estimated 685,000 in 2017.
Meanwhile, overall household debt stood at more than $13 trillion at the end of 2017, according to the Federal Reserve. That includes $8.8 trillion in mortgages, $1.4 trillion in student loans, $1.2 trillion in car loans and more than $1 trillion in credit card debt.
While student loan debt currently is difficult to discharge in bankruptcy — you must prove undue hardship — most other consumer debt is fair game for either eliminating or negotiating a lower payback amount, depending on the specifics of your case.
Of course, getting to the point of actually filing the paperwork with the bankruptcy court means overcoming the emotions that accompany the decision.
"When people finally get to the point of coming to talk to me, it usually takes another six months for it to sink in that they have to file," said Cara O'Neill, a legal editor with Nolo who also is a bankruptcy and litigation attorney in Roseville, California.
She said there often is a triggering event — such as a lawsuit filed by a creditor — that makes people realize how much trouble they're in.
"People really don't want to have to go the bankruptcy route," O'Neill said. "They usually do everything they can to avoid it."
In fact, some end up tapping their retirement savings to stave off bankruptcy. Experts say this is a big no-no and often just delays the inevitable.
For starters, retirement assets — including 401(k) plans and individual retirement accounts that you own and contributed to — generally are protected in bankruptcy. (Inherited IRAs do not get the same protection.)
An exception to this broad rule applies to IRAs, both traditional and Roth: Up to a set amount per person — currently about $1.28 million — is safe from creditors. Any excess could go to pay off creditors. Additionally, if you already receive retirement income, that money is not necessarily protected in bankruptcy.
Meanwhile, if you are younger than 59½ and turn to your retirement assets to pare down debt, you will pay an early-withdrawal penalty of 10 percent unless you meet one of a few exceptions. That's on top of paying ordinary income taxes on the distribution.
"The most significant thing to avoid is using retirement funds to pay back debt," O'Neill said. "If you can come out of bankruptcy without debt but with your retirement savings still intact, you'll be in a [more] stable financial place."
Filing options There are several ways to file for bankruptcy. Most individuals typically choose between Chapter 7 and Chapter 13. Each has filing fees of a few hundred dollars, and enlisting an attorney can add $1,200 to about $3,500, depending on where you live and the complexity of your case.
"Most filers will stop paying the debts that are getting discharged and instead use that money to pay the costs of filing," O'Neill said.
It's also worth noting that while federal law governs bankruptcy, there are some differences among states regarding what property cannot be sold to pay off creditors. For instance, in some states, wedding rings up to a certain value are protected.
Both Chapter 7 and 13 stop collection activity like calls from creditors or debt collectors, wage garnishments and, potentially, lawsuits from creditors. (Court judgments already in place are trickier to get rid of in bankruptcy.)
However, there are differences in who qualifies and how debt is treated in each option. Chapter 7 generally is for people who lack enough income to repay their debt and have little in the way of assets. It also is the most common way to file individual bankruptcy.
This approach quickly erases certain forms of debt, including from credit cards, medical bills and personal loans. It does not, however, necessarily stop your car from being repossessed or prevent home foreclosure, O'Neill said.
Chapter 13 generally gives you three to five years to pay back certain debt and keep the asset (i.e., house or car). It also prevents creditors from garnishing your wages or putting a levy on your bank account. For this filing option, you must have income, and your debt must be below a certain amount (about $1.5 million total).
For individuals with debt above that threshold, Chapter 11 — which is largely similar to Chapter 13 — might be the best choice. This is the least commonly used option for individuals.
Credit impact The biggest downside of bankruptcy is the hit your credit report takes.
"You exchange not having that debt for having a bankruptcy on your report," said Ike Shulman, co-chair of the National Association of Consumer Bankruptcy Attorneys' legislative committee.
However, he said, many people who file for bankruptcy already have tarnished credit due to delinquent loans.
The filing remains on a credit report for seven to 10 years, although the impact decreases over time and your score will tick upward. In fact, most Chapter 7 filers can qualify for a mortgage loan four years later, O'Neill said.
Regardless of which bankruptcy approach you take, you should be prepared to provide detailed information on your financial life to the court. That includes tax returns, bank statements, pay stubs and the like.
Keep in mind, too, that having an initial consult with a bankruptcy attorney often is free. They also might have suggestions for handling your debt that does not involve bankruptcy.
"No one wants to acknowledge they can't handle their bills," Shulman said. "People don't file bankruptcy because it's an easy decision to come to. It's because they don't have other choices."
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