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Beware Cut Rate Bankruptcy Advice

Wednesday, May 16th, 2012

Our elders always told us, “You get what you pay for,” but as we get older we learn that this advice isn’t always true. Sometimes you get more than you bargain for, and sometimes less. So how can you know if you are getting the best bankruptcy legal services for your money? The answer is actually simpler than you think. Below is a discussion of three little pigs attorneys who charged three different bankruptcy rates: the expensive rate, the market rate, and the discount rate.

The Expensive Bankruptcy Attorney

A consumer bankruptcy attorney who charges higher fees is telling you an important detail about his or her legal services. The expensive attorney does not need your business. The expensive attorney is often very experienced in consumer bankruptcy cases, but has committed his or her time to some other type of work. This is often true of bankruptcy attorneys who work for creditors, like banks and credit card companies. Sometimes Chapter 7 bankruptcy trustees represent bankruptcy clients, but most of their time is spent on trustee work. Sometimes bankruptcy is just a “side business” that the attorney can “take or leave.” Obviously the expensive attorney’s main focus is on something other than representing you.

The Discount Bankruptcy Attorney

The discount bankruptcy attorney needs your business either because he or she has started a new bankruptcy practice or because business is slow. A new bankruptcy practitioner is obviously a dangerous gamble. This attorney does not have the experience with the bankruptcy code, the local rules, the bankruptcy court judges and trustees, or the local creditors to reach the best outcome for the bankruptcy client. Practicing in the bankruptcy profession is not just a matter of knowing “what to do,” but the best result often depends on knowing “how to do it.” New bankruptcy attorneys simply do not know the “how to” of the bankruptcy practice.

A slow bankruptcy practice should also be a warning sign. Ask yourself, “Why is this firm offering a discount rate?” Is this attorney not getting referrals from other attorneys? No recommendations from previous clients? Why not? There may be reasons for the discount rate that could affect your case.

The Market Rate Bankruptcy Attorney

Successful consumer bankruptcy attorneys know what their competitors charge and will not over charge or under charge their clients. The market rate bankruptcy attorney knows the value of his or her services, and will confidently represent you in bankruptcy court. Most bankruptcy fees are simple and the process at a market rate attorney’s office is very efficient. This attorney can quickly identify issues with your case, recommend a course of action, and will zealously represent you. The market rate bankruptcy attorney has open lines of communication with the bankruptcy trustees and creditors, and can work quickly to achieve the best possible result.

Just like Goldilocks discovered, market rate bankruptcy services is just right! Your best option is an experienced bankruptcy attorney that charges a fair price.

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What Is a ‘Debt Relief Agency’?

Monday, May 14th, 2012

Ideally the process of completing a Las Vegas bankruptcy would go as smoothly as possible. Debtors would choose their lawyers, gather the appropriate information, sign the petition and file it. Unfortunately, Congress doesn’t see it that way, and when it amended the bankruptcy code in 2005, it created additional hurdles for you and your Las Vegas bankruptcy lawyer to overcome on your way to your discharge. One of them is requiring lawyers to tell debtors that they are “debt relief agencies.” What does this mean?

According to the bankruptcy code, a “debt relief agency” is, “any person who provides any bankruptcy assistance to an assisted person in return for the payment of money or other valuable consideration, or who is a bankruptcy petition preparer.” In other words, it’s your lawyer. An “assisted person” is “any person whose debts consist primarily of consumer debts and the value of whose nonexempt property is less than $150,000,” or your typical debtor who is looking to file a Chapter 7 or Chapter 13 bankruptcy and not a business owner.

Why is this important? The bankruptcy code now contains three new sections (526-528) that in practice frustrate the formation of an attorney-client relationship regarding bankruptcy services. “Debt relief agencies” are required to market their services according to particular guidelines, and they must provide “assisted persons”—i.e. you—with warnings and notices, as though debtors are buying tobacco products. All this paperwork can be confusing, but that’s partly the point.

If you need help handling your debt matters, don’t sweat these legalistic details. They’re designed to discourage you from seeking the protection you deserve. Instead, ask your bankruptcy attorney to explain everything carefully, and proceed from there.

For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-880-5554 to set up your free consultation.

Tags: debtrelief, las vegas bankruptcy
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What Happens If Your Co-Signer Files Bankruptcy?

Sunday, May 13th, 2012

Many bankruptcy questions are complicated and the right answer depends on the facts of the individual’s case. One challenging issue that frequently arises is how a debtor’s bankruptcy filing will impact a co-signer. Below is some general information on bankruptcy and co-signers:

Basics

A co-signed debt generally makes each signer 100% responsible. If a default occurs, the creditor can legally collect from one or all of the co-signers until the debt is paid.

The Automatic Stay

When a debtor files bankruptcy, the bankruptcy court automatically issues an injunction against all creditors prohibiting any collection attempts. This stay only applies to the debtor, personally, and does not stop the creditor from collecting from property or from other people. However, if the debtor has filed a Chapter 13 bankruptcy case, the automatic stay extends to co-signers and stops collection action (e.g. lawsuits, telephone harassment, repossession, etc.) against them as well. This protection does not apply to Chapter 7 cases.

The Bankruptcy Discharge

A bankruptcy discharge does not “erase” a debt, it makes the debt legally unenforceable against the debtor. The creditor is unable to collect from the discharged debtor, but can proceed to collect 100% of the debt from the remaining non-discharged signers. Co-signers are prohibited from suing the debtor on a discharged debt.

Secured Property

When a co-signed debt is secured by collateral, whether the property is protected by the bankruptcy court depends on whether the property is “owned” by the debtor and whether he or she intends to keep it. If the property is in the hands of the non-bankrupt co-signer, like a vehicle, the property is not protected by a Chapter 7 or Chapter 13 bankruptcy. Additionally, if the debtor abandons and surrenders interest in the property, the bankruptcy protection is extinguished and the creditor may legally repossess.

Other Issues

A creditor could consider a bankruptcy filing a breach of contract on a co-signed debt and place the debt in default status. Whether this is permitted depends on state law.
Some co-signed debts may not be discharged during the debtor’s bankruptcy. Common examples are student loans and taxes. Consult your attorney for more information on non-dischargeable debts.
The debtor’s bankruptcy could affect the co-signer’s credit rating, especially if payments are not made.

Protecting the co-signer’s interests during a bankruptcy case can be tricky business. If your co-signer has filed bankruptcy, speak with an experienced bankruptcy attorney and discuss your legal rights. Your bankruptcy attorney can help you understand the bankruptcy process and how it will affect you.

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5 Ways to Save Money and Keep Yourself Out of Bankruptcy

Sunday, May 13th, 2012

Most people who consider filing a Chapter 7 Las Vegas bankruptcy already have debt problems that require a professional’s help. However, there are ways people can cut costs here and there that can really add up. Here are five examples:

(1) Buying brand name products when generics will do. Brand name literally sells just that: a name. If you’re trying to curtail excessive spending, switching to a generic equivalent can save quite a bit of cash. The best situation in which to do this is where Americans spend most for brand: prescription drugs. Generic drugs are identical to their branded equivalents, which is why drug companies spend so much on advertising now—they don’t want consumers to realize they have alternatives.

(2) Eating out too much. Restaurant spending can quickly cut into your budget, especially because eating out is such a relief from cooking all the time. That said, even taking leftovers home is more expensive than staying in.

(3) Not changing vices and bad habits. It’s hard to quit smoking, but the cost of tobacco adds little benefit and increases the likelihood of reducing your long term health. Frequent alcohol consumption is also a bad habit because it can lower your inhibitions to make you want to drink (and sometimes smoke) more. Gambling is also a money suck, and not just slots and high stakes poker. It’s the small stuff that gets you, especially lotteries, which state governments use to supplement their revenues. The odds of winning the lottery are so terrible, the tickets are worthless.

(4) Overpaying for insurance. Many people pay high premiums to insure themselves from situations in which they won’t file a claim. Avoid buying policies with low deductibles. They might make you feel more secure, but if you won’t report an accident involving slightly higher amounts of damage, the premium was wasted.

(5) Paying for unneeded services. One of the problems with the 21st century is the large number of services for people to subscribe to. Cell phones come with confusing plans, unlimited texting options for people who don’t text, and Internet access for those who might not use it. Curbing these options will save you money on your monthly bill. Another service to get rid of is cable television, now that the Internet streams many good shows for less and occasionally for free.

Saving money doesn’t always help, and when a family member loses a job or suffers an illness, getting your finances in order can be a daunting process. Consulting with a financial planner, tax planner, or a Las Vegas bankruptcy lawyer can help you get a handle on your changed circumstances.

Tags: attorneys, las vegas chapter 7 bankruptcy, lawyers, nevada
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5 Steps for Las Vegas Residents to Avoiding Telephone ‘Vishing’ Debt Scams

Saturday, May 12th, 2012

Since the recession hit, debt scams have proliferated. Jobs lost leads to people defaulting on loans, which in turn leads to more people trying to con debtors out of what little money they have left. Some of these scams are more sophisticated than others. The most common ones written about by bankruptcy lawyers are debt settlement scams in which a firm claims it can negotiate down your debt even though it does nothing to do so. Other scams are more straightforward, such as a basic telephone scam that the banking industry refers to as “vishing.”

Take for instance one set up by “Citi Customer First,” which has nothing to do with Citigroup. The scammers use an autodialer to call random people’s numbers. Its number has been identified as (888) 472-4945. The auto-dialer leaves automated messages telling the target that he or she owes a large debt to Citi, and then it gives some options about repaying the debt in whole or in part. Anyone who calls is directed to provide their Social Security numbers and credit card information. The goal is to convince enough worried debtors to provide private financial information to make the endeavor worthwhile.

Here are a few steps to distinguishing between telephone debt scams and relevant communications from your bank.

(1) Your bank won’t call you to ask you for your financial information, so don’t give it to anyone who calls and asks.

(2) Know how much debt you owe and to what creditors. You can find this out by obtaining a free credit report from one of the three credit reporting bureaus.

(3) Scammers will usually not know how much money you actually owe on a specific debt and will instead refer to it vaguely. Actual debt collectors will know about the specific debts you owe.

(4) Thanks to the Fair Debt Collection Practices Act, debt collectors are forbidden from using autodiallers to contact you, and they can’t leave automated messages either. Scammers, obviously, don’t care about adhering to laws like the FDCPA.

(5) Banks don’t immediately sell your debts to collectors. They will send you mail first, identifying itself as the owner of your debt and the amount you owe. It will not ask for private information beyond that.

High debts and lost incomes are often enough to push people into bankruptcy, but giving money to a con artist only worsens the situation. If your debt situation has gone from bad to worse, and if you’ve given money to someone you didn’t actually owe money to under fraudulent circumstances, an experienced Las Vegas bankruptcy lawyer can help you sort the situation out.

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Options For Secured Property In Chapter 7 Bankruptcy

Friday, May 11th, 2012

During your Chapter 7 bankruptcy, you may hear the trustee or your own attorney say, “Secured property must be paid for or returned.” If you have a debt that is secured by a lien on property, you must make arrangements to pay the creditor or surrender the property. That is the general rule, but its not always the case.

A lien is a interest given to a creditor that secures future payment of a debt. If you fail to make your payments as agreed, the collateral pledged as security for the loan can be repossessed (or foreclosed in the case of a home loan). A lien will generally survive a Chapter 7 bankruptcy case, hence the “pay or return” statement. For instance, you cannot discharge a loan secured by a car and keep the car. You have three options concerning secured debts on Chapter 7 bankruptcy:

Reaffirmation – if you want to keep the secured property and continue paying the loan, you can reaffirm the debt and continue the relationship with the creditor. The debt and lien survive the bankruptcy by mutual agreement between the debtor and creditor.

Redemption – secured property can be redeemed for its fair market value during Chapter 7 bankruptcy. Redemption does not apply to home mortgages.

Surrender – If you cannot afford to keep and continue paying on a secured item, you can surrender the property back to the creditor and “walk away” owing nothing.

A fourth option, called “ride through,” may be available under certain circumstances. “Ride through” occurs when the debtor discharges the debt, but the creditor is unable to enforce its lien because of a lack of breach of contract or some other state law impediment. Finally, if you have pledged household property that you own to secure payment of a personal loan, you may be able to strip off the lien and keep your property.

Your bankruptcy attorney will evaluate your secured property and recommend a course of action. While each case is different, the Chapter 7 debtor generally keeps all of his or her property. The bankruptcy laws are flexible to discharge burdensome debt and allow you to keep your home and family vehicles. Speak with an experienced attorney concerning the specifics of your case.

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Bankruptcy Is Not Absolute

Thursday, May 10th, 2012

The bankruptcy discharge is one of the most broad and powerful provisions in U.S. law. Discharged debts cannot ever be collected from the debtor. However, there are limits to the bankruptcy discharge and it is only meant to help honest debtors. The federal bankruptcy code excepts certain “bad actor” debts from discharge, like criminal fines, debts from willful and malicious conduct, debts from drunk driving, etc.

The case of Nicolai v. Larsen, decided recently by the 7th circuit Court of Appeals, is an excellent example of how the bankruptcy code may limit the discharge when the debtor is dishonest. In this case Larsen was awarded $3.4 million by a Wisconsin court as a result of injuries Nicolai caused while attempting to murder his wife. Nicolai tried to discharge this debt during bankruptcy. The 7th Circuit Court of Appeals found that the debt was based on Nicolai’s bad acts of battery, false imprisonment and intentional infliction of emotional distress. Under section 523(a)(6)of the bankruptcy code, debts arising from “willful and malicious injury by the debtor to another entity or to the property of another entity” are not dischargeable, the 7th Circuit denied Nicolai his request to discharge the $3.4 million debt. The court said:

“We imagine that all courts would agree that a willful and malicious injury, precluding discharge in bankruptcy of the debt created by the injury, is one that the injurer inflicted knowing he had no legal justification and either desiring to inflict the injury or knowing it was highly likely to result from his act. To allow him to shirk liability by discharging his judgment debt in those circumstances would undermine the deterrent efficacy of tort law without serving any policy that might be thought to inform bankruptcy law property of another entity.”

The bankruptcy code does not automatically except a debt for “willful and malicious injury” from the order of discharge. Instead, a creditor has a duty to affirmatively object to the discharge of the debt. If the creditor fails to file a timely objection, the debt is included in the discharge and the creditor may not collect from the debtor.

If you have caused a willful injury to another person and need financial help, speak with an experienced bankruptcy attorney. Your attorney can explain your legal rights and discuss your bankruptcy options. The bankruptcy code is flexible to permit repayment, discharge, or time to restructure your finances.

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What Is “Bankruptcy Protection?”

Tuesday, May 8th, 2012

When a company or celebrity files bankruptcy it is a news-worthy event. The media often states that the company or person has “filed for bankruptcy protection.” But what exactly does this mean?

The federal bankruptcy laws are written to allow the debtor time to reorganize his or her finances. Reorganization would not be possible if creditors are allowed to continue collection actions like repossession, foreclosure, or lawsuits. Consequently, when a debtor files a bankruptcy case, the federal law immediately and automatically stops all collection activity. This provision, called the “automatic stay,” gives the debtor “breathing space” to work with legal counsel, the bankruptcy trustee, creditors, and the court to propose a plan to either repay or discharge debts.

The automatic stay is technically a temporary injunction, issued by the federal bankruptcy judge, and directed at creditors that forbids collection action without prior permission from the court. The automatic stay prohibits creditor contact with the debtor in an effort to collect on a debt, which means collection letters, phone calls, emails, and other harassment must immediately cease. Lawsuits and garnishments must also stop once the bankruptcy case is filed. A violation of the automatic stay is punishable by contempt and enforced by the bankruptcy court.

The automatic stay continues until either the debtor receives a discharge, the case closes, or the stay order is modified. Once the debtor receives a discharge, a new injunction takes the place of the automatic stay, commonly called the “discharge injunction.” The discharge injunction is permanent and does not expire. It prohibits the creditor from collecting from the debtor, which includes lawsuits, garnishments, collection letters, etc.

The automatic stay and the discharge injunction apply to original creditors and third party collectors like collection agencies and attorneys. However, while violation of these orders does not depend on knowledge of the bankruptcy, court punishment usually does. The first thing to do when a violation occurs is to notify the collector of the bankruptcy order and contact your attorney. Knowing violations of a court order will have serious consequences for the collector and any wrongful repossession, garnishment, or seizure will be undone by the court’s authority.

Bankruptcy protection is very powerful. The automatic stay umbrella will immediately shield you from creditor harassment while you restructure your finances, and the discharge injunction will give you peace of mind to enjoy your fresh start. For more information on how you can benefit from bankruptcy protection, contact an experienced bankruptcy attorney.

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3 Steps for Las Vegas Residents to Take If a Relative Dies while in Bankruptcy

Monday, May 7th, 2012

Many older Americans are burdened with high debt loads. In many situations they will leave little to their descendents, and if they’re underwater, the problem becomes more complicated. Plus, there are some situations where debtors know that they’re likely to pass away soon and would like to handle their debt problems before they die. These are tough circumstances, but if you believe you might not see the end of your bankruptcy, or if you’re filing jointly with a spouse in such a situation, or if you are a relative who may inherit the post-bankruptcy estate, there are some steps you can take to prepare yourself given the circumstances.

· For those filing in Chapter 7, the case continues all the way through discharge as though the debtor did not die. This makes sense since Chapter 7 is the straight liquidation chapter, meaning it discharges debts rather than pays them down out of the petitioner’s subsequent earnings. Instead, the petitioner’s non-exempt assets will be sold to the creditors, which aren’t affected by the petitioner’s death. The only thing to note here is that the Chapter 7 bankruptcy process concludes before any estate proceeding can distribute the remaining assets to the petitioner’s beneficiaries.

· In Chapter 13 cases, because the petitioner has died, the attorney usually voluntarily dismisses the case. Chapter 13 cases reorganize the petitioner’s debts and require him or her to make payments on them according to a repayment plan. Without the petitioner’s future income, there can be no repayment plan.

For relatives, the situation depends on their relationship to the petitioner. When the petitioner files in Chapter 7, they merely wait until the discharge occurs. In Chapter 13, though, if the relative is filing jointly with the petitioner (usually a spouse), then the steps to take are different. The joint filer can:

(1) Seek a hardship discharge if he or she does not work,

(2) Modify the repayment plan to reduce the monthly payments,

(3) Separate the cases and either dismissing the deceased petitioner’s case or discharging his or her debts via a hardship discharge. Then the surviving petitioner continues in either Chapter 13 or Chapter 7.

Death during bankruptcy is unusual, but the law deals with it adequately. It’s a situation people might encounter the longer they have underwater houses, so if you think you or your spouse will not see the end of your bankruptcy, then it’s especially important to hire an experienced Las Vegas bankruptcy attorney to help plan your case, or even to be flexible when unexpected tragedies occur.

Tags: las vegas chapter 13, las vegas chapter 7
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Options For Secured Property In Chapter 7 Bankruptcy

Monday, May 7th, 2012

Redemption – secured property can be redeemed for its fair market value during Chapter 7 bankruptcy. Redemption does not apply to home mortgages.

Surrender – If you cannot afford to keep and continue paying on a secured item, you can surrender the property back to the creditor and “walk away” owing nothing.

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