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People want to know whether a bankruptcy can be overturned or revoked. There are three ways that a bankruptcy can be overturned or revoked: 1) denial of discharge, 2) revocation of discharge, or 3) denial of dischargeability. Each one is different.
Denial of Discharge
A bankruptcy discharge is denied through an adversary proceeding. Denial of discharge is usually what people mean when they ask if a bankruptcy can be denied.
When the discharge is denied it means that none of the debts are discharged in the bankruptcy and that those debts can never be discharged in bankruptcy. If the debtor files a bankruptcy in the future – even many years in the future – they cannot discharge any debt that could have been included in the bankruptcy where the discharge was denied. Obviously this is a severe penalty that has far reaching financial consequences for a debtor.
A denial of discharge requires a creditor or trustee to bring an adversary proceeding and prove that the debtor has committed fraud in connection with the bankruptcy, made false oaths in connection with the bankruptcy, refused to comply with a bankruptcy court order, or wrongfully denied the trustee access to property of the estate.
Denial of discharge is most common where the debtor has made a major omission on their petition or wrongfully transferred property during or after the bankruptcy was filed.
There is a deadline to file an action to deny the discharge. The deadline can be extended, provided the request is filed with the court before the deadline expires.
Revocation of Discharge
A revocation of discharge occurs after the discharge has been entered. It also requires an adversary proceeding. Similar to the denial of discharge, the revocation of discharge revokes the entire bankruptcy and none of the debts that were part of that bankruptcy can be discharged in any future bankruptcy.
Revocation of the discharge is more complicated than denial of the discharge and is granted on more limited grounds. One issue in a discharge revocation case is whether the complaining creditor or trustee had knowledge of the facts of the case before the discharge was entered.
Basically, if a creditor or trustee finds out that the debtor violated the Bankruptcy Code before the discharge is entered, then they must act on that knowledge before the discharge is entered. A discharge cannot be revoked at all if more than one year has passed since the case was closed.
Dischargeability
An adversary proceeding to determine dischargeability only applies to specific debts. Unlike a revocation or denial of the discharge, a creditor has to prove that a specific debt should not be discharged in the bankruptcy. There are two types of debts that are nondischargeable: 1) self-executing, and 2) action required.
Action Required Non-Dischargeable Debts
The actin required non-dischargeable debts require a creditor to bring an adversary proceeding to deny the dischargeability of the debt. The adversary proceeding must be brought before the expiration of the deadline to object to discharge or the creditor must seek an extension of that deadline.
There are three types of debt that require an adversary proceeding to be deemed non-dischargeable:
- Money, property, services, or an extension of the same obtained through actual fraud or a written false statement of financial condition.
- Fraud or defalcation by a fiduciary, embezzlement, or larceny.
- Willful and malicious injury.
Self-Executing Non-Dischargeable Debts
If a debt is a self-executing non-dischargeable debt, then the creditor does not have to bring an adversary proceeding to deny the dischargeability of that debt. If the Debtor wants that debt discharged, then they have to bring an adversary proceeding to determine dischargeability.
The most common self-executing non-dischargeable debts include taxes, domestic support obligations, student loans, fines and penalties from criminal cases, student loans, personal injury claims related to a DUI, debts not listed on the bankruptcy petition, debts not listed on a previous bankruptcy petition, non-support obligations from a divorce, debt incurred for the purpose of paying taxes, and debts owed to a retirement fund (i.e. 401(k), IRA, or pension). There are other forms of nondischargeable debt, but they are case specific and do not arise as often.
If you’re facing foreclosure, you need to talk to an experienced professional immediately. A qualified expert can evaluate your situation and explore your options with you. Whether you are victim of improper mortgage servicing practices or have just struggled financially in the past, an attorney can help.
One foreclosure alternative that has received a lot of attention lately is a short sale. In fact, new legislation, Prompt Decision for Qualification for Short Sale Act of 2013, was just introduced this March to expand legislation from last year and to improve the short sale process overall. Even if you have received a foreclosure notice, a short sale may be an option.
What Is a Short Sale?
A short sale provides borrowers the opportunity to avoid foreclosure by allowing them to sell their home for less than their mortgage’s remaining balance. If the servicer accepts that less-than-full amount, the house is sold to the new purchaser, and the lien against the property is released. However, the borrower will still owe the remaining unpaid balance of any first or second mortgage on the property.
This can eliminate or reduce your mortgage debt, help you avoid the negative impact of foreclosure, allow you to begin repairing your credit sooner than if you experienced foreclosure, and may give you the chance to get another Fannie Mae or Freddie Mac mortgage in as little as two years. Note that a short sale will negatively impact your credit score, but for many, getting out from under an overwhelmingly burdensome mortgage is worth the credit score hit.
Speedier Short Sales
In the past, short sales were rarer than they are now, because fewer people qualified for them, the market has drastically changed from what it was, and the short sale process was long and frustrating. Now, borrowers whose loans have been purchased or guaranteed by Fannie Mae or Freddie Mac enjoy a standardized and streamlined short sale process.
Short sales used to often fail because mortgage servicers took an inordinate amount of time to make decisions and process paperwork. Potential buyers would make an offer, the servicers would take too long to proceed, and the buyers would get frustrated and back out of the transaction.
A program that took effect last year makes the short sale process take much less time. For federally-backed loans, lenders must decide whether to accept a short sale offer within 30 days, aligning short sales with a traditional home-selling and home-purchasing experience. New legislation introduced just this month seeks to expand this 30-day limit to mortgages not backed by Fannie Mae or Freddie Mac. Speedier short sales means increased closing rates, which allows buyers and sellers to move on with their lives more quickly, and boosts the housing market.
More People Are Eligible for Short Sales
Historically, only delinquent borrowers were eligible for short sales, but an important short sale program went into effect last year. That Fannie Mae and Freddie Mac program allows short sales not only for homeowners whose mortgages are in default, but also for those who are not in default but are encountering a substantial hardship that could push them into default.
Now, servicers may approve borrowers for a short sale even if they are current on their payments if they are suffering a hardship such as divorce or separation, death of a borrower or primary wage earner, borrower or dependant family member having a long-term or permanent disability, natural or man-made disaster, sudden increase in housing expenses beyond the borrower’s control, a business failure, or distant employment transfer or relocation (including Permanent Change of Station orders for service members). This list is not exhaustive, as a servicer may submit a short sale recommendation for approval if a non-delinquent borrower is facing a hardship not listed above. (There are also other, non-hardship eligibility criteria not discussed here. See Fannie Mae or Freddie Mac for more details.)
Preparing for Short Sale
Collect your basic financial and loan information. This includes your mortgage statements, other monthly debt payments, and income details like paystubs and income tax returns. Then outline why you are having difficulty making your mortgage payments. You will need to explain to your servicer your hardship and why it is a long-term problem. The documentation required to show need is reduced or eliminated for those who have missed several mortgage payments, have low credit scores, and are facing serious financial hardships.
As I mentioned previously, your very first step should be to talk to a qualified professional. An experienced attorney will need the above information to help you determine your best course of action, so it is a good idea to have these materials on hand. But remember, a foreclosure may not have to be your fate, and a short sale certainly is not your only option. For instance, if you are behind on your payments but can afford your mortgage and just need some help getting back on track, consider a Chapter 13 bankruptcy plan to prevent foreclosure and to avoid a short sale. Or, if you have other debts that you cannot manage, a Chapter 7 bankruptcy may help you resolve all of your debts, including the mortgage, in one short process.
See Related Blog Posts:
Fannie Mae Loss Mitigation Options
What is a Qualified Mortgage?
The post Is a Short Sale Right for You? appeared first on AKB.
By Ryan C. Wood The short answer is because corporate profits and corporations in general are favored over protecting the individual from harm these days. Below is only one court decision in the long dismantlement of individual rights in favor of corporate rights. Every state, well, every state used to have usury laws. Have you [...]The post Ever Wonder Why Credit Card Companies Can Charge Such High Interest Rates? appeared first on National Bankruptcy Forum.
Mortgage companies and banks often put you on a “no communication” list after you file bankruptcy. Your on-line access log-in may stop working, you will no longer receive loan statements, and when you call customer service you may be told that because you are in bankruptcy, the lender cannot talk to you anymore.Lenders are not giving you the silent treatment because they are angry at you for filing bankruptcy, nor are they trying to be rude. They are not talking to you because the automatic stay protection of the Bankruptcy Code says that once you file, it is a violation of the stay to make any effort to collect a debt.Arguably, a loan statement could be construed as attempting to collect a debt and customer service reps not knowledgeable about bankruptcy may say something inproper. Basically your bank or mortgage company does not want to find itself facing a claim for damages arising from violating the stay so many of these companies simply cut off all communication.The problem for you, of course, is that you may have a need to speak with a representative. Perhaps you need to confirm receipt of a mortgage payment that was paid directly after filing. You may need to make an electronic payment directly from your checking account. You may need a copy of your payment history.How do you get past the wall of silence?I have found that one tactic which does work many times involves a letter from me (or your attorney) stating that I represent you in a particular bankruptcy case and that I authorize the lender to communicate with you directly about your account and to resume sending statements.Many lenders find this type of letter sufficient to ease their concern about potential liability for communicating with a bankruptcy debtor.Obviously you, as the debtor, must be careful about what you say to a creditor representative and limit your discussions to your specific needs. For example, you would not want to engage the lender’s representative in a discussion about your failings at managing your credit card bills. You should assume that any conversation you have with a bank or mortgage company representative is being recorded.Generally, your lender will communicate with me as your lawyer. I regularly receive notices of changes in payments, escrow changes and payment address changes. I will forward these along to my clients but obviously it is better if my clients receive these directly.The post Bank Won’t Talk to You Now that You have Filed Bankruptcy – Here’s a Solution appeared first on theBKBlog.
Attorney’s fees are always a big issue for my clients, because money is tight and they are worried about how they can afford a bankruptcy attorney. It is important you to understand how attorneys’ fees work in chapter 7 bankruptcy.
I charge a flat fee for chapter 7 bankruptcy. This is because a flat fee is the easiest and fairest way to setup a client’s case. With a flat fee bankruptcy, the cost is predictable for the client and there aren’t any surprises. It also makes it easier to get the chapter 7 case filed, because a bankruptcy attorney can’t file a case when there are fees are due and owing. With an hourly rate, you run the risk of a big bill before the case is filed. With a flat fee, you know exactly how much is required to file the case and can plan accordingly.
So how much should you pay for a chapter 7 bankruptcy? Seattle Tacoma area you may see ads for bankruptcy attorneys that charge as little as $600 – $700 for a chapter 7 bankruptcy. That is the low end of the market, and you should be careful. You get what you pay for; and if you low rates, you should expect low quality. My chapter 7 flat fee is in the middle of the range. I charge from $1,200 to $1,500 for most chapter 7 cases, more if you are self-employed.
Why is my chapter 7 flat fee in the middle of the range? I believe in providing quality representation. Quality representation means taking the time to talk with my clients, return phone calls, exchange emails, and carefully analyze their case. It takes time. Additionally, I don’t have any hidden fees. I’m not going to quote you a lowball price, and then tell you that there are a bunch of extra fees. I don’t charge top of the market rates, because I believe in making bankruptcy accessible to my clients. That means I set my prices at a level where I can provide you the best representation money can buy, but the prices are still fair and affordable.
Are there every any extra costs on top of the flat fee? Rarely. Litigation is not included in the flat fee, because litigation is rare and the cost is hard to predict. The majority of my clients will not have any litigation in their cases. Typically, we can spot litigation before the case is filed and plan accordingly. Either we budget for it in the flat fee or we figure out how to avoid it. If you fill out the questionnaire completely and participate in the petition review process, then the risk of litigation is small and all you’ll pay is one simple flat fee for your chapter 7.
A Federal Trade Commission report released this month revealed that it received nearly 370,000 reports of identity theft in 2012, nearly 90,000 more than in 2011. Identity theft was the number one complaint reported to the Federal Trade Commission, with debt collection issues coming in at a distant second. This was the highest total ever reported by the agency.
Identity theft not only hurts victims regarding their immediate finances, but it also has the potential to ruin one’s credit rating. It seems there are endless ways identity thieves are stealing and using information. This is ever the more reason to be vigilant about your credit and prepared for what may, unfortunately, be the inevitable—having your identity stolen.
Controlling Damage from Identity Theft
Make sure you check your credit report and score regularly. Being vigilant about your credit can help you catch problems before they create more serious damage. Check to see if your insurance provider, bank, credit card provider, etc. provides an identity theft program to help protect you or minimize damage in case you become a victim. If you suspect there may be some problem with your credit report, consider placing a fraud alert on your credit reporting with the reporting agencies.
Handling Identity Theft
If you do find fraudulent activity, the first thing you need to do is alert any of your creditors that are involved. This will help contain the damage. Next, report the crime to the police. This cannot hurt you, and it very well may help you down the line. After contacting the police, contact the FTC. While the FTC does not resolve individual complaints, your report may help the FTC spot a pattern of violations requiring law enforcement action. Once you have reported the fraudulent activity to the above groups, go through your credit reports with a fine-toothed comb. You can retrieve them online from all three credit reporting agencies. Look for any suspicious personal information or any credit event that you do not recognize.
Do not forget to keep track of all of your actions. You want to be able to review the entire process, from when you discovered the issue until you hopefully find some resolution. A clear and accurate record of everything you do, who you talk to, what is said, and when it occurred will not only keep you on top of things, but it may be useful in any possible lawsuit in the future.
Your Credit Report Following Identity Theft
- Following identity theft, some of your rights include the right to:
- Block fraudulent information from your credit report,
- Dispute fraudulent or inaccurate information on your credit report,
- Stop creditors and debt collectors from reporting fraudulent accounts,
- Get copies of documents related to the theft of your identity, and
- Stop a debt collector from contacting you.
Ideally, your credit report will eventually reflect only accurate information. Unfortunately, that may not occur. Inaccurate information can not only cause you to be denied credit, refused insurance, and denied employment, but it can also lead to higher fees and interest rates for credit that you do receive. It is your right to have an accurate credit report and to be fairly evaluated based on that information. If you believe your rights have been infringed, contact an experienced attorney.
See Related Blog Posts:
Reports by the FTC and by 60 Minutes Spotlight Deficiencies in Credit Reporting
Report Says 1 in 5 Consumers Know Their Credit Score
The post Credit Rating Beware: Identity Theft at All-Time High appeared first on AKB.
When you have a security clearance, financial problems are even more stressful because you worry about your security clearance. For most people, bankruptcy seems like an obvious solution to financial trouble. If you have a security clearance, you worry about whether the bankruptcy will affect your security clearance. Here’ what you need to know about your security clearance and bankruptcy.
- Bankruptcy does not mean that you will automatically lose your security clearance.
- Financial problems are grounds for revocation or denial of a security clearance.
- Failing to take care of your financial problems, increases the risk that you will lose your security clearance.
- Bankruptcy is provided for in the United States Constitution and is established at federal law as a means for dealing with financial problems. However, you need to go into a bankruptcy with open eyes and all the facts.
No lawyer can guarantee an outcome. That is particularly true when it comes to security clearances, because the basis for revoking or denying a security clearance is discretionary and includes a review of your entire background. I won’t make a guarantee that your security clearance won’t be affected; however, I can give you the guidance to minimize the risk to your security clearance.
- Security clearance reviews are exercises in trust. Can the United States government trust you with its secrets? Make sure that you are absolutely truthful with your bankruptcy lawyer.
- The reviewing officer will see your financial problems on your credit report, whether its repossessions, lawsuits, missed payments, or foreclosure. Bankruptcy is a method of dealing with your financial problems. It is better to show the reviewing officer that you are handling your problems than it is to just act like the problems don’t exist of don’t need to be handled.
- The circumstances of your financial distress are critical. The reviewing officer is going to be a lot more understanding if you are filing bankruptcy because of the financial toll from multiple deployments, divorce, a spouse’s unemployment, or because you made some financial mistakes years ago that you just can’t get on top of without a bankruptcy.
- Debts from gambling or substance abuse are high risk, because problem gambling and substance abuse are by themselves grounds for denial or revocation of your security clearance.
If you are experiencing financial distress and you have a security clearance, then you need to take action to address your financial problems. I offer a free confidential consultation, where you can openly discuss your financial situation, and I can offer possible solutions.
Legislation introduced in Congress,The Fair Access to Credit Scores Act of 2013, proposes to amend the Fair Credit Reporting Act. The bill calls for the inclusion of credit scores with the free credit report available to consumers every year. The two members of Congress who introduced the bill, Rep. Steve Cohen, D-Tenn.; and Sen. Bernie Sanders, I-VT, cited concerns about consumers paying credit agencies for inaccurate credit scores and for credit monitoring services that consumers are lured into by false promises of “free” reports.
Free Credit Score with Your Report
By federal law, consumers are allowed a free copy of their credit score after being refused credit, receiving higher interest rates on loans, or being given unfavorable terms on credit cards. Additionally, all consumers, regardless of such circumstances, have access to a free credit report each year. The Cohen/Sanders bill would expand upon these rights. The proposed bill mandates that consumers receive not only a free credit report, but also a free, reliable, accurate credit score every year.
Errors on Your Credit Report
As we have previously explained, material errors in credit reports are far from rare, with tens of millions of consumers paying for those errors. To make things worse, reports estimate that between only one-fifth to one-half of Americans know their credit score. That means there are a lot of people out there who are suffering from their credit score without even knowing what it is. Get your credit report, get your credit score, and if you have a mistake on your credit report, do not ignore it—your credit score will thank you.
Effects of Credit Report Mistakes
Employers run credit checks on applicants all the time. According to one survey, one in seven job applicants with poor credit were informed they were not hired because of their credit. (Keep in mind that employers may not necessarily admit to all applicants that they were not hired because of poor credit, even though, by law, they are required to do so.) Many find themselves in a cycle of poor credit, financial struggle, and unemployment. Do not fall into that cycle because of credit reporting mistakes.
Of course, poor credit can also negatively impact interest rates on car loans, student loans, and mortgages. It can prevent you from signing a rental agreement, securing insurance, or getting a decent credit card rate. Anything credit-related can suffer from a poor credit score, and your credit score is based on your credit report. So, a healthy credit report leads to a higher credit score, and a higher credit score generally leads to lower interest rates. Basically, the higher your credit score, the less you pay for loans. It is obvious why you want to ensure that your credit report is accurate.
Protect Your Credit Score
If The Fair Access to Credit Scores Act of 2013 is successful, you will be better equipped to protect your credit score. You will not have to pay to see your credit score or wait until you are negatively impacted by it. You will, like your credit report, be able to view your credit score for free once a year.
This means you can better understand what affect the information on your credit report has on your credit score, because you will see it rise or fall as your credit report changes over time. While understanding the changes will not be that simple, a drastic plummet of your score will surely tip you off to serious mistakes or even identity theft. Stay on top of your credit report, dispute any errors, and if need be, contact an attorney for help.
See Related Blog Posts:
Reports by the FTC and by 60 Minutes Spotlight Deficiencies in Credit Reporting
Report Says 1 in 5 Consumers Know Their Credit Score
The post Free Access to Your Credit Score with Your Credit Report? appeared first on AKB.
This is the time of year when families across both Oregon and Washington are eagerly awaiting tax refunds. It is also a time when many of these same families are considering seeking the protection of the Bankruptcy Court. Unfortunately these goals, keeping the refund and getting bankruptcy protection, are often at odds in the state of Oregon.
First the good news. If any part of your refund is going to be Earned Income Credit, the portion that is EIC is completely protected; you keep it all. Also keep in mind that just because you currently live in Oregon doesn’t mean the Oregon exemptions apply. If you have lived here for less than two years, the Oregon exemptions most likely do not apply and, depending on the largess of your former home state, your refund may be protected in full. If, however, the Oregon exemptions do apply and you are expecting non-EIC refund money, some words of warning are in order.
Lets use the 2012 potential refund as an example. First, the trustee does not care that you really need the money. Second, the fact that you have not yet filed is not going to help. The Trustee is patient and will track on the fact that you are not filing until September. Ultimately, the best way for you to protect the 2012 refund is to file your return, get the refund and spend it in a reasonable and fully documented manner prior to filing bankruptcy. For example, pay off your attorney and filing fees prior to filing. You will obviously need to talk to your attorney about strategies regarding the way you spend down the refund before heading down that path. Additionally, if you want to save your EIC and spend down unprotected part of your refund, talk to your attorney about strategies for isolating the protected funds so that no portion of them can later be claimed by the trustee.
Beyond the issue of retaining your 2012 refund in bankruptcy, do keep in mind that the longer you wait in 2013 to file your bankruptcy, the larger the proportional share of your 2013 potential refund will be put at risk. Currently nearly twenty-five percent of 2013 has already gone by so count on losing twenty-five percent of your next refund and the percentages get worse with every month that goes by. Talk to your attorney about strategies for reducing your withholding before you file so that you don’t unnecessarily create asset an asset for the trustee to take away.
Finally, if you absolutely must file prior to getting your hands on your refund(you are getting garnished, property is in foreclosure, etc.) consider Chapter 13 Bankruptcy. Under certain circumstances, a Chapter 13 bankruptcy filer can often keep in upwards of $3000 of an upcoming refund without having to surrender it to the Chapter 13 Bankruptcy attorney. While the ability to retain a large part of a refund is rarely reason in and of itself to file Chapter 13, the advantage of doing so when coupled with other factors can argue for a Chapter 13 filing rather than Chapter 7.
Call the Northwest Debt Relief Law Firm today to go over strategies for filing bankruptcy and keeping your refund.
The original post is titled Oregon Bankruptcy and Keeping Tax Refunds , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
Can you reinstate the automatic stay? No, but you can get the same protection through injunctive relief. Some background will help make this clearer.
The automatic stay goes into effect when a bankruptcy is filed, and it prevents all actions to collect on a pre-petition debt. There are only a few exceptions to the automatic stay, for example it doesn’t stop a criminal prosecution. For the average client, the automatic stay puts a full stop to all creditor harassment.
If you have filed bankruptcy in the last year, then you will lose the automatic stay after 30 days if your bankruptcy attorney doesn’t take steps to keep the automatic stay in place. If you have filed multiple bankruptcies in the last year, then the automatic stay may not go into effect at all. However all is not lost.
First, you may not need the automatic stay reinstated. If you are in a chapter 13, then your creditors will be bound to the plan; and, the plan will prevent your creditors from harassing you. If you are in a chapter 7, the discharge will enter roughly 90 days after you file, and the discharge injunction will stop creditors from harassing you. In these cases, you probably do not need to worry about having the automatic stay reinstated.
Second, even though the court cannot reinstate the automatic stay, the bankruptcy judge can give you the same kind of relief that you would get from reinstating the automatic stay. This is because the bankruptcy court has the authority to enter an injunction that is the functional equivalent of the automatic stay. The only difference is that an injunction has to be targeted at a specific creditor or creditors and cannot simply be a blanket injunction. This isn’t a problem, because most of my clients have a whole bunch of creditors; but only one or two that are actively harassing them.
If you have had a bankruptcy dismissed without a discharge and need to file again, you need to make sure that you and your bankruptcy attorney work out a plan for dealing with the automatic stay. If you need to get the automatic stay, make sure that you attorney understands that they have the ability to seek a specific injunction against a creditor. A specific injunction is not the same thing as reinstating the automatic stay, but it has the same protective function.
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