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Archive for the ‘Bankruptcy Tips’ Category

Student Loan Bankruptcy Case Reaches Supreme Court

Posted by admin on December 19th, 2009

As an Indiana bankruptcy attorney and debt consolidation lawyer, , I offer student loan debt help.  This past calendar year, there’s been a lot of debate about whether student loans should be treated the same as other consumer debt when it comes to bankruptcy. While some measures were passed extending repayment time for parents, student loan debt in Indiana (as I pointed out in yesterday’s blog post), is a big problem getting bigger all the time.

Two weeks ago, National Public Radio ran a story about a Supreme Court case involving bankruptcy and student loans. Since my blog is devoted to offering Indiana bankruptcy information, I thought sharing the details of the case with my Indiana bankruptcy clients and blog readers would help me teach certain principles about how bankruptcy law works.

In 1988, Francisco Espinosa, a baggage handler for America West Airlines, enrolled in technical school to learn computer drafting and design.  When Francisco graduated, he had student loans of $13,000 and no other debt.  But, when America West began to falter, the company cut back on pay, so that Francisco was making only $6 an hour.  He no longer was able to keep up the payments on the student loans.  United Student Aid Funds, Inc. bega

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Tags: Bankruptcy, Student Loan
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Is the Stock Market a Barometer for Consumer Bankruptcy Filings?

Posted by admin on December 19th, 2009
 
After reading a recent New York Times article about stock market jitters caused by worried consumers, I wondered if the stock market indexes could be used as a barometer to predict future personal bankruptcy filings.
 
After all, we have often heard that the fear on Wall Street is that nervous consumers can short-circuit the country’s economic recovery, which is just starting to pick up, despite the fact that consumer bankruptcy filings continue in very high numbers.
 
When consumer sentiment falls significantly short of expectations, which is what happened towards the end of the summer (before a slight rebound), it was a sign that consumers were cutting back on their spending as they worried about layoffs.  With unemployment approaching ten percent, many consumers are growing increasingly concerned about losing their jobs, assuming they still have them.
 
Job loss is one of the major reasons why consumers file for bankruptcy help.  I see this daily in my Long Island bankruptcy practice, meeting one person or another who has lost a job, lost the ability to work overtime, or has a family member who was laid off.
 
Although the stock market is indeed rebounding, I would conclude that the ebbs in the stock market have a rebound effect and lead to increased consumer bankruptcy filings several months (or even years) later, as consumers face job loss or the effects of reduced income.

Tags: Consumer, Stock Market
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Bankruptcy Mortgage Lenders

Posted by admin on December 18th, 2009

Bankruptcy mortgage lenders offer some hope to individuals who are trying to buy a home after a bankruptcy. Some lenders advise potential customers to wait two years before applying for a new mortgage. Obtaining a home loan sooner will probably mean having to pay a large down payment and paying higher interest on the funding. Bankruptcy mortgage lenders encourage their clients to work on reestablishing credit and making all payments on time after the discharge of the bankruptcy. Recent good credit can help in getting an approval on funding for a home. Some non profit organizations offer help with making a down payment on a home. The funds are usually from government grants and some do not have to be paid back but the applicant must qualify according to the terms through payment assistance programs.

The main reasons for denial when trying to buy a home vary depending upon the underwriters with the lender. Bankruptcy mortgage lenders have guidelines that a customer has to fit into in order to qualify for funding. The underwriters may believe that the customer is just too much of a risk to approve. Read full post…

Tags: Bankruptcy Mortgage, Bankruptcy Mortgage Lenders, Lenders, Mortgage Lenders
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Removing Property Liens in Chapter 7 Bankruptcy

Posted by admin on December 16th, 2009

 

Removing Property Liens in Chapter 7 Bankruptcy

Normally a second mortgage lien can not be removed in a chapter 7 bankruptcy.  However, if the creditor has put a “judgment” lien on the home instead of a “mortgage” lien; it can be done.  We recently had a debtor who is buying a home valued at $250,000, due to the first mortgage, there is no equity available.  We made a Motion to Remove Judicial Lien based on this fact.  The creditor made no objection in the proper time allotted and the Motion was granted.  The lien was for $59,000.  Because a creditor made a mistake, it lost out on recovering money loaned.  Perhaps not surprising to realize, creditors make mistakes like this all the time.  Simply researching your client’s case and reviewing any liens involved could save your client a vast amount of money. 

            In another instance, we had a debtor who filed a chapter 7 bankruptcy and discovered that a creditor had put a lien on the debtor’s property for an above ground pool.  A pool is collateral in itself; it is never acceptable to place a lien on someone’s property for a secured item.  We thought at first to file an adversary proceeding against this creditor until realizing that the client had a second mortgage on his home that was wholly unsecured by lack of equity in the property.  By converting this client to a chapter 13 case, we can remove the second mortgage and the lien for the pool.

            Many times, some analytical thought regarding a client’s circumstances and petition can lead to money saving solutions such as these.  It is well worth spending extra time on a case to insure a debtor can indeed obtain a fresh start by filing bankruptcy.

Tags: Bankruptcy, Property Liens, Removing Property, Removing Property Liens
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Auto Loan After Chapter 13 Bankruptcy

Posted by admin on December 15th, 2009

Bankruptcy on car loans can be a tough break because shoppers never know how banks will respond to their attempts to get another vehicle. Consumers might go to car dealership after car dealership, only to hear the same answer over and over again. The consumer doesn’t have the right credit, their bankrupt status prevents getting a car, or he or she doesn’t qualify for a vehicle. This can be heartbreaking. Many people may have had to claim bankruptcy on car loans in the past, but they are trying to rebuild their lives and credit. Unfortunately, car dealers aren’t lenient when it comes to bad financial histories. Usually, salesmen can’t approve a purchase or have to charge outrageous interest for customers with an unfortunate spending history. These consumers and those thinking of going bankrupt should try talking with a creditor. By talking to the person or company to which money is owed, the current situation can be improved. The creditor might be able to give some insight on what going bankrupt really does – how the process affects credit and the like. Read full post…

Tags: 13 Bankruptcy, Bankruptcy
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Life After Bankruptcy

Posted by admin on December 14th, 2009

Life after bankruptcy is like a road with a fork in it–one can choose to take the path that leads to better financial decisions and a more prosperous future, or take the path of repetition and be no better off than before. The point is, for most people who have filed for help under Chapter 7 or 13, it will be necessary to handle finances differently than in their pre-bankruptcy days, according to those who give financial advice after bankruptcy. When debts piled up out of “wants” instead of “needs” a change in attitude is absolutely necessary. However, when the process has resulted from personal tragedy, i.e., job loss, illness, or accident that has drained a person’s financial reserves, the situation is quite different.

Financial advice after bankruptcy is available from more than one source. The attorney who helped to file the case in the first place would be the logical first choice for guidance. Where an individual filed on his own (not usually the best way, but for some it can be done), then finding an attorney who handles these cases would be a good beginning. Read full post…

Tags: Bankruptcy
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Why The Bankruptcy Rate in Canada Spikes After Christmas, and What You Can Do To Avoid Bankruptcy After Christmas

Posted by admin on December 14th, 2009

Doug Hoyes, Bankruptcy Trustee

I have worked as a personal bankruptcy trustee in Canada for many years, so I know from experience that one of our busiest phone days of the year is the first Monday back after the Christmas holidays. I assume that January 4, 2010 will be no different: the phones will be ringing off the hook.

I have worked as a personal bankruptcy trustee in Canada for many years, so I know from experience that one of our busiest phone days of the year is the first Monday back after the Christmas holidays. I assume that January 4, 2010 will be no different: the phones will be ringing off the hook.

Why? Because we all tend to spend too much at Christmas on our credit cards, and as the bills start to arrive in January we realize that we have a serious problem. But it’s not just the bills that cause us to worry.

Christmas is, for many people, a very stressful time of year. Canada is currently suffering through our worst recession in decades. Many Canadians have lost their jobs, and simply don’t have the money they’ve had in the past to buy Christmas presents. That’

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Tags: Bankruptcy, Bankruptcy Christmas
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When Women Become Bankruptcy Creditors

Posted by admin on December 12th, 2009

Indiana bankruptcy clients come in different flavors, of course – couples, singles, male, female, young, and old. In recent bankruptcy blog posts I highlighted the relationship between divorce and bankruptcy, and, in “Bankruptcy And Single Mother Families”, I wrote about research showing that single women face a much greater likelihood of financial collapse than either their male counterparts or married couples.

Back in 2002, the New York Times was reporting that in the preceding twenty years, “bankruptcy filings for female-headed households have increased at more than double the rate of bankruptcies for comparable households with an adult male present.”  Attorney and law school professor Elizabeth Warren expressed the opinion in that article that families with children are more economically vulnerable than those without, and since, in a divorce, women are more likely to keep the children, more women were filing bankruptcy.

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Tags: Bankruptcy, Bankruptcy Creditors
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