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Archive for the ‘Bankruptcy Tips’ Category

Is Bankruptcy A Wise Decision?

Posted by Oswald Goldstein on October 5th, 2010

The decision to file a personal bankruptcy can be emotionally difficult for many individuals.  Sometimes these emotions can make it difficult to accurately assess your financial picture.  If you are facing a financial dilemma, it is a good idea to consult with someone skilled in evaluating your finances and obtain advice.  The answer to a financial problem can vary from reducing spending, to increasing income, to selling assets, and finally to reorganizing or liquidating in bankruptcy. 

 

Filing bankruptcy should always be your last good option.  Unfortunately, good people will make bad decisions when trying to avoid this last good option.  Bankruptcy attorneys see people regularly who have made bad decisions regarding their finances in the hope of avoiding bankruptcy.  These bad decisions always make matters worse.  Some of these bad decisions include:

 

* Borrowing from retirement funds

* Borrowing money from a business, family, or friends

* Misappropriating money, kiting checks, or other illegal activities

* Borrowing from payday loan companies, taking cash advances from credit

* Selling assets that may be protected from creditors

 

It is true that desperate people do desperate things.  When things get desperate, it is time to consult with an experienced bankruptcy attorney and discover how the bankruptcy process can help you and your family.  Bankruptcy is a legal process that is authorized by the Constitution of the United States.  Its laws are drafted by Congress and a federal bankruptcy judge oversees your case along with a trustee appointed by the Department of Justice.

 

One goal of the bankruptcy process is to return the debtor to financial health by relieving the burdens of overwhelming debt.  The great majority of debtors never file bankruptcy again and rebuild their financial lives by making good decisions after the bankruptcy discharge.  For these people, bankruptcy provides a second chance.

 

If you need a second chance and a fresh financial start, speak with an experienced bankruptcy attorney and discuss your options.  Make wise decisions about your personal finances.  The bankruptcy laws help over a million families get a new financial beginning each year, and it can help you too!

Tags: Decision
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Robo-Signers Exposed Only the Tip of the Iceberg

Posted by Jim Karlson on October 5th, 2010

The sub-servicers of the mortgage industry are in the business of foreclosure, not loan workouts; in case you were wondering. GMAC has dressed up in sheep’s clothing by changing its name to Ally Bank; owned by GMAC, LLC.  Now, GMAC has even California Attorney General Jerry Brown halting their foreclosures after a deposition of one of GMAC’s employees was leaked to the press.  So what’s all the fuss about? 

GMAC Mortgage is only one of the many loan servicers nationwide, including J.P. Chase, and Bank of America among others to have banks of employees with alleged limited signing authority as Vice Presidents, Assistant Secretaries of Mortgage Electronic Registration Systems, Inc. that assigned your deed of trust in order to correct the record after your home has been foreclosed.  We call them “Robo-Signers” because that’s all they do all day long is sign documents they have no idea as to what the documents are or the consequences of their actions.

How does knowing all this help the homeowner who hasn’t yet lost their American Dream?  Have your loan documents reviewed by an attorney who understands the securitization process and whether your home is worth fighting for and whether you can afford to keep it.  You need to do this before the home is foreclosed; before any sale date is set. Consi

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Complying With the Payment Advice Rule in Consumer Bankruptcy Cases

Posted by Oswald Goldstein on October 2nd, 2010

  We all know that under the new bankruptcy laws, debtors are required to file copies of all pay stubs for income received during the 60-day period prior to filing.   To put teeth into this requirement, the law further provides that failure to do so will result in the automatic dismissal of the bankruptcy case – a scary thought.  What happens if a debtor files just one pay stub, but otherwise documents the payments they received?   The Second Circuit Court of Appeals just decided a case last month, on August 9, 2010.  It held that debtors do not need to file all of their pre-petition payment advices if they otherwise document all payment received from employers during the 60-day pre-petition period.    This case addressed for the first time in our circuit what obligations the Bankruptcy Code imposes upon a debtor with respect to the filing of payments advices. The bottom line is that debtors merely need to provide the necessary information on payments as opposed to the actual pay stubs themselves.   Read full post…

Tags: Bankruptcy, Bankruptcy Cases
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Can Chapter 13 Debtor Add A Second Mortgage Strip To An Already Confirmed Chapter 13 Plan?

Posted by Jim Karlson on September 30th, 2010

A Chapter 13 debtor can strip a second mortgage from his primary residency if the value of his home is worth less than the first mortgage so that there is no equity securing the second. I received a call from one of my Chapter 13 clients who had filed Chapter 13 bankruptcy in 2007. The debtor had a first and second mortgage on his residence. At the time he filed the house was worth more than the first mortgage so the Chapter 13 plan did not attempt to strip the second mortgage. The debtor’s plan was confirmed at the end of 2007. The debtor is current on his payments. He reports that since the plan confirmation his residence has continued decreasing in value, and that currently the house is worth significantly less than the first mortgage. He wants to know if he can modify his confirmed Chapter 13 plan to strip the second mortgage.

The general rule is that a debtor’s Chapter 13 plan can and should be modified to reflect significant increases or decreases in disposable monthly due to changes in income or expenses. I have never been asked before to insert a mortgage strip into a confirmed Chapter 13 plan. My

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Tags: Chapter, Chapter 13, Chapter 13 Debtor, Second Mortgage
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Credit Cards: The Fast Route to Bankruptcy in Canada

Posted by Jim Karlson on September 27th, 2010

What’s the fastest way to accumulate so much debt that you have no option but to file bankruptcy in Canada? As a bankruptcy trustee I have handled thousands of personal bankruptcy filings over the last two decades, and the answer to that question, based on my experience, is easy:

Douglas Hoyes, Bankruptcy Trustee

Credit cards.

If you want to get into serious financial trouble, excessive credit card debt is a sure fire way to invite financial disaster.

Two years ago my firm did a study of “Joe Debtor”, the average person who declares bankruptcy in Canada. Our study showed that 93% of Canadians that file personal bankruptcy or a consumer proposal have credit card debt, and the average they owed on their credit cards at the time of filing was just under $20,000. (With other debts, like taxes and lines of credit, the total unsecured debt was just over $50,000).

The facts are clear: it’s unlikely that someone with no credit card debt will have a need to file bankruptcy. The mor

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Tags: Canada
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What To Do When Facing Bankruptcy

Posted by Oswald Goldstein on September 27th, 2010

If you are in financial trouble, you are not alone.  More than 1.5 million bankruptcy cases were filed during the fiscal year that ended June 30, 2010.  Many of these cases were joint husband and wife filings, which conservatively equates to one person filing bankruptcy in the United States every 15 seconds!

 

Many people who are facing financial hardship believe that they are powerless to act and that the situation is hopeless.  Bankruptcy attorneys meet these people every day and show them how to recover from overwhelming debt.  If you are facing bankruptcy, there are a few things to do that will make the process considerably easier.

 

First, consult with an experienced bankruptcy attorney.  The initial consultation is free, so discuss your financial situation and learn how the federal bankruptcy laws can help you and your family.  Your bankruptcy attorney can help you develop a bankruptcy strategy and explain what property is protected or at risk, and identify debts that can be discharged or that survive the bankruptcy.

 

Second, tighten your belt.  This is the time to be financially conservative and begin your financial recovery.  You and your attorney will construct a reasonable budget which will allow you to gain control over your finances during and after the bankruptcy case.

 

Third, before you make a large financial transaction, discuss the matter with your attorney.  In many cases large financial transactions can undermine your bankruptcy case.  Your bankruptcy attorney can advise you whether to pay your mortgage, car payment, credit cards, or repay a loan from a family member.

 

Fourth, seek out advice regarding any expensive item that cannot be protected in your bankruptcy.  Rather than lose an item to the trustee, in many cases it can be sold and the proceeds used to pay ordinary expenses.  Discuss this matter with your attorney.

 

Fifth, stop using credit.  Credit transactions immediately before filing bankruptcy will send up a red flag to both creditors and to the bankruptcy trustee.  These credit purchases may also be found non-dischargeable, or worse, fraudulent.

 

If you are in a dire financial situation, break the inertia of depression and discuss your options with an experienced bankruptcy attorney.  Early attorney involvement can mean the difference between an easy and difficult bankruptcy case.  Get the advice you need today and begin on your path to a financial fresh start.

 

Tags: Bankruptcy
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Inheritance From Parents’ Revocable Living Trust Within 180 Days Is Not Captured In Debtor’s Bankruptcy Estate

Posted by Jim Karlson on September 26th, 2010

The general rule is that any property a debtor acquires after he files his bankruptcy petition is not part of his bankruptcy estate. The biggest exception to the general rule is money received as part of an inheritance or life insurance policy. All property the debtor receives by “bequest, devise, or inheritance:” or as a beneficiary of someone’s life insurance within 180 days after the filing date becomes part of the bankruptcy estate and is taken to pay the bankruptcy creditors. The debtor gets any part of the inheritance or insurance proceeds remaining, if any, after the creditors are paid.

I assumed it did not make a difference if the debtor’s inheritance of his parent or grandparent’s money was through the probate of a will as opposed to the administration of a living trust. In the past few decades the living trust has become the primary tool to pass on an inheritance because it avoids probate. I saw a 2

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Tags: Bankruptcy Estate, Estate
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Will Filing Chapter 7 Bankruptcy Wipe Out My Retirement Savings?

Posted by Oswald Goldstein on September 23rd, 2010

Most retirement savings accounts are considered either exempt or not part of the bankruptcy estate and, therefore, are protected from turn-over during Chapter 7 bankruptcy. When an account is considered “not property of the bankruptcy estate” it cannot be taken by the bankruptcy trustee for distribution to creditors. The U.S. Supreme Court has held that an employee’s interest in an employer pension plan (that qualifies under ERISA) is not property of the bankruptcy estate. The Bankruptcy Code also protects certain retirement funds during a Chapter 7 bankruptcy case. Retirement accounts classified under sections 401, 403, 408, 408A, 414, 457, or 501(a) of the Internal Revenue Code are exempt from collection (up to certain amounts). These sections cover most retirement plans and include pension plans, profit sharing plans, stock bonus plans, employee annuities, IRAs, Roth IRAs, government deferred compensation plans, plans of tax exempt organizations, and certain trusts. The laws generally exempt these accounts up to a million dollars for each debtor. Other

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Tags: Retirement Savings, Savings
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