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The Automatic Stay Stops The Wage Garnishment When you file for bankruptcy, you obtain an automatic stay. The automatic stay is the instrument which basically tells creditors that they can no longer take certain actions in an effort to collect a debt from you. If you are being garnished and you decide to file bankruptcy,+ Read MoreThe post What Happens With My Wage Garnishment Prior To Filing For Bankruptcy? appeared first on David M. Siegel.
In the case of In re Buonopane, ___ B.R. ____, 2007 WL 247888 (Bkrtcy. M.D. Fla.)Williamson, J.) the Bankruptcy Court for the Middle District of Florida held that the cap imposed by section 522(p) on the state homestead exemption that a debtor can claim in residential property acquired within 1,215 days of the petition date applied only to the Florida homestead exemption that the debtor could claim under 522(b)(3)(A) and not to the separate exemption available under section 522(b)(3)(B) for property held as tenants by the entireties. In Florida, a judgment against one spouse individually is not enforceable against property owned by both spouses as tenants by the entirety. The court's decision is in accord with a recent decision in the Southern District of Florida in the case of In re Schwarz, __ B.R. ___, 2007 WL 247649 (Bkrtcy.S.D.Fla.)(Olson, J.).
The Court stated while its ruling would appear to provide a way for a debtor to "end run" the $125,000 cap contained in section 522(p), that its ruling is consistent with the legislative history of section 522(p)(1) which was directed to close the "mansion loophole" and not against a state's common law on tenancy by the entireties property.(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
Wisconsin lawmakers, in a fit of rage about the onerous nature of student loans, are pushing for a new way for the state to make money and help borrowers. But does it make sense for borrowers?
Dubbed the “Higher Ed, Lower Debt” bill, the measure was introduced by State Rep. Cory Mason as a way to ease student-loan struggles got a hearing Monday in the state Assembly.
The law proposes to create a state authority to refinance federal student loan debts, as well as to extend tax benefits to those who borrow for their educational needs.
For the life of me, I can’t figure out why this law is a good idea.
First, Who’s Going To Fund It?
First, it’s useful to note that federal student loans carry an interest rate of just 3.68%. In order for Wisconsin to lower payments, they’d need to refinance those loans at a lower rate than 3.68%. The state would have to sell bonds to finance the lending at below four percent, which doesn’t seem possible given the fact that such bonds wouldn’t be backed by the state.
It’s unlikely that investors are going to buy those bonds because, without state backing, the risk of loss is too great to counterbalance the low rate of return.
- Rep. Mason’s student debt bill gets a hearing
- Student loan refinancing bill draws packed hearing, questions about its effectiveness
Next, Who’s Going To Go For It?
But let’s pretend that investors look at these bonds and decide that they’re a good deal. What student in their right mind would go for such a deal?
Federal student loans offer a number of repayment options. You’ve got your standard 10-year repayment, your income-based repayment, Pay-As-You-Earn, and more.
Federal loans also offer ways to eliminate your student loans if you’re disabled or work in certain fields.
Once you refinance them, those opportunities disappear. All flexibility is out the window, leaving the borrower on the hook without any escape valve.
Full Of Sound and Fury
Wisconsin lawmakers are putting a consumer-friendly face on the law, but I’d be shocked if anyone on the inside expected this to pass into law.
And once it fails, someone can stand up on Election Day and proclaim himself or herself as a friend of the student loan borrower. They get to point a finger at the other side and call them bad names, and brand them as an enemy of the people.
Makes for good politics and a good story. But if lawmakers want to effect change in the way that people cope with student loan debts, this isn’t the way to go.
Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for February 11, 2014 Vince Young Settles Bankruptcy, Plans Return to NFL First Mariner Bancorp files for bankruptcy Former Baywatch star Donna D’Errico files for bankruptcy
A company in West Virginia blamed for the chemical spill that left hundreds of thousands of residents without safe drinking water has filed for bankruptcy. Freedom Industries Inc. filed Chapter 11 bankruptcy recently to provide the company temporary protection from possible lawsuits that may be filed against them. According to documents related to the filing, [...]
The recent case of In re Bast, ___ BR ___, 2007 WL 1429481 (Bkrtcy.S.D. Fla.)(Friedman J.) dealt with a motion by a discharged chapter 7 trustee to vacate the final decree and his discharge as trustee about a year after the chapter 7 case was closed as a "no asset case." The motions were filed as part of his efforts to administer an asset for the benefit of creditors. The asset involved was an $82,000 surplus generated by a foreclosure sale of scheduled non-exempt real property after the chapter 7 case was closed.
The Court denied the chapter 7 trustee's motion to vacate the final decree and the trustee discharge. During the chapter 7 case, which was filed in March, 2005, it was not apparent that there was equity in the real property and the chapter 7 trustee did not administer the real property and filed a report of no distribution in April, 2005. Subsequently though, a foreclosure sale on the courthouse steps in St. Lucie County produced a surplus of $82,000 from the sale of the real property.
The Court discussed that there are "basically three types of abandonment that may occur in a bankruptcy case" as set forth in section 554. The first two types of abandonment are set forth in sections 554(a) and (b) and take place upon motion of a party. The third type of abandonment is found in section 554(c). It does not involve a motion and is commonly referred to as a "technical abandonment." A technical abandonment generally results under section 554(c) upon the closing of the case if an asset is disclosed in the schedules and is not administered during the course of the bankruptcy case.
In this case, the requirements for a technical abandonment were met and the non-exempt real property was abandoned from the estate to the debtor at the close of the case. The trustee's subsequent efforts to administer the $82,000 surplus for the benefit of the creditors were denied by the Court. As a result, the debtor was entitled to the $82,000.(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
Positive Experience After Filing Bankruptcy The overwhelming majority of my clients who go through filing bankruptcy through my office find it to be a very positive and rewarding experience. They get to start over again financially. They are allowed to obtain credit immediately after filing and that might take the place of a credit card+ Read MoreThe post What Do Clients Experience After Filing Bankruptcy? appeared first on David M. Siegel.
If you got through the recession without filing for bankruptcy, the government is happy – even if you lost your home, went into default, and had your bank accounts and wages seized.
A January 2014 working paper from the Federal Reserve Bank of St. Louis, titled, “Labor Market Upheaval, Default Regulations, and Consumer Debt,” find that
the 2005 bankruptcy reform likely prevented a substantial increase in bankruptcy filings, but had only limited effect on the observed path of delinquencies. Thus, the reform appears to have ‘worked.’
Click here for the entire study in PDF format.
I don’t often comment on a change in the law that was signed into law nearly 9 years ago, but I can’t help but wonder how the lack of an uptick in bankruptcy filings during the worst financial downturn since the Great Depression is something to be lauded.
People lost their jobs in record numbers, foreclosures washed over the nation at a rate that left entire towns empty and a generation scarred.
And lots of people filed for bankruptcy. Good, smart people who just got kicked in the groin by circumstances beyond their control.
People like you and me, our neighbors and friends.
The Safety Valve Was Shut Off
In spite of the increase in bankruptcy filings, the study says that it could have been a lot worse. And because it wasn’t, the study claims victory.
The study, however, misses the point – something the economists seem to recognize when they indicate that delinquencies were still extraordinarily high during the period in question. It’s as if nobody bothered to consider the effects of millions of people walking around with delinquent debt on their credit reports.
These people can’t go out and buy a new home, or a car, or even get a decent credit card. They aren’t able to buy big-ticket items like refrigerators and furniture because they’re wallowing in unpaid bills.
Some of these folks have been sued, and are contending with wage garnishments and bank account freezes. Others haven’t been sued, but will be paying debt collectors $10 each month until long after they die. Their credit is shot, with no hope of improving until the debts are all paid off.
It Could Have Been Different
Let’s contrast this with the situation if these folks had filed for bankruptcy.
With their debts gone, these people would have been free to begin saving money again.
At the same time, their credit score would have begun to rise as the old debts began to fade into the past.
People would have been better able to pay their student loans and tax debts that didn’t get wiped out in bankruptcy.
Buying a car or home furnishings wouldn’t be out of the question anymore.
In short order, more people would have re-entered the wheel of commerce. Money would have changed hands, exchanged for goods and services.
The Government Laughed as You Cried
You know the government bailed out the banks rather than help you out. But this study shows clearly how you were kicked when you were already down for the count.
The Democrats called the Republicans evil as they pushed through the bankruptcy reforms of 2005. Then the Democrats gleefully reaped the benefits of the Republican efforts.
As Bob Dylan asked, “how does it feel?”
Remember this the next time the vote comes around.
Bankruptcy has created stereotypical views of consumers who file for protection. While each situation is different, you should not let rumors, misconceptions, or false presumptions steer you from learning the facts about filing. There are people who have been known to be careless about their finances and seek protection. Yet, most cases do not include [...]
If you are on cusp of filing for divorce in Oregon and need to figure out what to do about all the debt, meeting with an experienced Portland or Salem Bankruptcy Attorney is likely a great first step.
If there aren’t any potential conflicts between you and your spouse (no secured debts, no potential child support obligations, no tax issues, just a bunch of unsecured debt), filing together prior to dissolution is often a great way to resolve the debt issues and save alot of money in the divorce since you no longer have to spend any time and attorney fees figuring out who is going to deal with the credit cards and who is going to handle the collectors.
If there are potential conflicts, you will need to file individually. For example, if you are both on the boat and car loans, he wants to keep them and you are worried that he might not be able to later, you should probably not file together. You want to keep the house, he isn’t so sure, you want to get rid of the cars, he wants to keep making payments.
Your spouse’s income level can also be an issue. Let’s say he makes more than you do and he doesn’t qualify for Chapter 7 bankruptcy, only Chapter 13. Do you really want to be part of his Chapter 13 when you can file Chapter 7 alone later after the divorce. Normally, you wouldn’t but, under some circumstances it might actually be helpful. Only you with the help of your Portland or Salem, Oregon Bankruptcy attorney can tell.
What you are going to owe your spouse after bankruptcy or what he is going to owe you is also going to have a huge impact on what kind of bankruptcy you opt to file and whether you file with him. Ultimately, if there are debt issues of any kind, you should meet with an Oregon bankruptcy attorney prior to finalizing the divorce. If you do have questions about divorce and bankruptcy , please feel free to give our office a call or set an appointment at either our Salem or Portland, Oregon Bankruptcy Law Offices.a
The original post is titled Oregon Divorce and Bankruptcy , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
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