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Archive for the ‘Bankruptcy Tips’ Category

Debts Excluded From Chapter 7 Discharge

Posted by Oswald Goldstein on July 6th, 2011

The purpose of a Chapter 7 bankruptcy is to liquidate all of the debtor’s non-exempt property to pay creditors, and to legally discharge any remaining debt the debtor is unable to pay. The creditors get whatever the law allows them to take from the debtor (usually nothing), and the debtor gets a fresh financial start, without the heavy burden of debt.

While a Chapter 7 bankruptcy case will discharge many types of debts, there are 19 categories of debts that Congress has identified as not dischargeable (called “excepted from discharge”). A complete list of the 19 categories is below:

1. Most taxes. In some cases tax debt can be discharged. For instance, if an income tax debt is more than three years old, it may be dischargeable. 2. Debts incurred through false pretenses. This category includes debts for luxury goods or services within 90 days before the bankruptcy was filed, and cash advances within 70 days before filing. 3. Unlisted debts, if the failure to list the debt prevented notice to the creditor and an opportunity to file a claim or object to the discharge of the debt.

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Tags: Discharge
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How About a 30% Interest Rate Forever, If You Miss One Credit Card Payment

Posted by Oswald Goldstein on July 5th, 2011

It never ceases to amaze me how much credit card companies are doing to send me business.

Let’s think about this for a minute; I’m a bankruptcy attorney in Arizona, and people of all sorts come to me when they reach the conclusion that their debt is overwhelming.

And now major banks announce that if you miss a payment, they’ll run interest at 30% on your account. Forever.

Now, with unemployment at record levels, and inflation at 10%, and gas prices through the roof and rising, I’m impressed by the “let’s pile on” mentality of the banks.

And it used to be that if a lawyer sent another lawyer a client, a small gift might change hands; a box of candy, or a box of cigars, or a bottle of scotch.

I just can’t think what I should send to the banks as a “thank you” gift for sending me so many clients.

I know!

I’ll find some of those valentine-shaped boxes of candy, and send those to the banks.

Because, after all, the banks are clearly in need of…a heart.

Tags: Card, Credit Card
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Can Stay-at-Home Moms Become Millionaires?

Posted by Oswald Goldstein on June 30th, 2011

This article suggests that a stay-at-home mom can simply whip up an idea and become a millionaire.

Sadly, the smart money bets otherwise.

But I look forward to a better economic climate, when starting a business requires less of a leap of faith.

Because small businesses in the United States hire locally, and that’s a good thing. Read full post…

Tags: Become, Become Millionaires
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Discharging Tax Debt in Bankruptcy

Posted by Oswald Goldstein on June 30th, 2011

 Certain debts have been given special status by the Bankruptcy Code and are generally excluded from the debtor’s bankruptcy discharge. Child support obligations, student loans, and income tax debts are three of the most common types of debts that are not dischargeable. However, each of these debts may be eligible for discharge in bankruptcy under certain circumstances.

The rules for discharging an income tax debt can be complicated, and the debtor’s ability to discharge all or a portion of the tax debt or penalties may depend on whether the case is filed under Chapter 7 or Chapter 13 of the Bankruptcy Code. An income tax debt arises from a tax return for a particular tax year. In general, an income tax debt for a particular tax year may be discharged if the following criteria are met:

1. The due date for filing the tax return was at least three years prior to the bankruptcy filing date. This due date includes any extensions.

2. The tax return was filed at least two years prior to the bankruptcy filing. This date is the time the return was actually filed with the IRS.

3. A ta

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Tags: Bankruptcy, Tax Debt
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I Don’t Have to List Charged-off Debts in My Bankruptcy, Do I?

Posted by Oswald Goldstein on June 29th, 2011

Uh. Yes. Heck yes. Heck yes with exclamation points.

I know that hope springs eternal in the human breast, but it’s a bad idea to leave any debt, of any sort, off of your bankruptcy petition and schedules. If a creditor doesn’t get actual notice by the drop dead date, that creditor may well not be affected by your Bankruptcy Discharge Order.

And if all of your other debts have been discharged, there’s more available to that creditor when he sues you and garnishes you and liens your house. And that doesn’t count the debtor’s exam, which is less fun than a root canal!

And “charged off” doesn’t mean you won’t be sued on that debt; it’s just an internal accounting phrase used by banks, and it has some bearing on how much money a bank can loan. It has no bearing on whether the bank can, or will, sue you.

Tags: Bankruptcy
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Wells Fargo is Still Freezing Bank Accounts!

Posted by Jim Karlson on June 28th, 2011

 Back in July, 2010 I reported on the 9th circuit case of Mwangi v. Wells Fargo Bank, N.A., “Wells Fargo Won’t Stop Freezing Bank Accounts.” Our local group of attorneys here in the Central District of California have it on good word from sources inside Wells Fargo’s bankruptcy department that the bank continues to freeze accounts while the litigation case is reviewed by the bankruptcy court in Nevada.  The Mwangi case has been remanded back to the bankruptcy court to determine whether Wells Fargo’s continuation of the administrative freeze and retention of the account funds claimed exempt, in the absence of instructions from the trustee, was reasonable in light of the debtor’s demand that the subject account funds be released for their use.

This is a case to watch as it affects all debtors filing bankruptcy, clients of Wells Fargo Bank, N.A. and the Automatic Stay under 11 U.S.C. § 362(a).  On January 21, 2011 Christopher P. Burke, Esq. and Scott C. Borison, Esq. attorneys for Eric Mwangi and Pauline Mwicharo filed case no. 11-01022-bam in U.S. Bankr

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Tags: Accounts, Bank Accounts, Freezing Bank, Freezing Bank Accounts
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You Must Take a Court Approved Credit Counseling Course BEFORE Filing Bankruptcy

Posted by Jim Karlson on June 28th, 2011

Every time I sit in court on confirmation hearings there are at least a few cases that get dismissed because the debtor’s did not complete their court required pre-filing credit counseling course before they filed their bankruptcy case. The Bankruptcy Code is very clear on this and

Your case will get dismissed if you fail to complete the course prior to filing your bankruptcy case.

There are plenty of courses to choose from and a few will provide you with a completion certificate on an emergency basis.  You can file your bankruptcy case, the moment your course is complete and can file the certificate at a later time.  Since the course certificate is date and time stamped, the court will be able to confirm that you’ve completed the course before your bankruptcy case was commenced.

Here’s a list of approved credit counseling agencies.  Just click on your state from the drop down menu and you can choose from any company on the list.  Here in California, we have the best deal in the market for pre-filing credit counseling courses.  This course was once offered for free, but now the certificate costs $5.00.  For this low cost course, go to Consumer Bankruptcy Counseling. Save y

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Tags: Counseling Course, Credit Counseling, Credit Counseling Course, Filing
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Chapter 7 Trustees Attacking Debtors’ Right To Stay Put In Their Upside Down Homestead Property

Posted by Jim Karlson on June 27th, 2011

The Florida Supreme Court’s expanded debtor’s $4,000 wildcard exemption earlier this year giving debtors substantially more exemptions to apply to their cars and personal property. Any debtor who does not need to use their homestead exemption can take the wildcard exemption; joint debtors have a combined additional $8,000 of available exemptions.

Chapter 7 bankruptcy trustees get compensated based upon the amount of non-exempt assets they capture and administer in the bankruptcy estate. The more that courts expand debtor exemptions the less property is available for trustees. Trustee pay goes down.. The wildcard exemption expansion is not good for bankruptcy trustees.

In today’s real estate market, most bankruptcy debtors live in upside down homestead properties. The debtor does not have to be current on his mortgage to stay in his house during bankruptcy, and a large percentage of Chapter 7 debtors, being in financial trouble for one reason or another, will remain in possession of their upside down house, default on their mortgage, and also claim the wildcard exemption because they have no homestead equity. Such

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Tags: Property
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