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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.

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.

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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.

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.

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Options For Secured Property In Chapter 7 Bankruptcy

Monday, May 7th, 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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Transportation During Chapter 7 Bankruptcy

Tuesday, February 21st, 2012

For most people having reliable transportation is a necessity. A vehicle is required to get to work, school, or to an appointment at the doctor. Most of us can’t imagine doing without a personal vehicle. Filing bankruptcy doesn’t mean you have to give up having a car, truck, or motorcycle.

The first question is whether you have equity in the vehicle you own. Equity is simply the difference between the amount you owe and what your vehicle is worth. If you owe more than your vehicle is worth, you have “negative equity,” which is really no equity at all. The bankruptcy laws allow you to keep a reasonable amount of vehicle equity. If this amount is not enough to fully protect the vehicle, you may use other legal exemptions to protect your vehicle equity. Finally, if you have more vehicle equity than you can legally protect, you can purchase the equity from the Chapter 7 trustee.

The second consideration is your lender. There are three options for dealing with vehicle loans in Chapter 7 bankruptcy: reaffirmation, redemption, and surrender (a controversial “fourth option” is available in some states and circumstances. Speak with your attorney to see if your situation qualifies).

If you wish to continue the monthly payment, you can execute a reaffirmation agreement. This is a contract that states that the debt you owe the lender will survive the bankruptcy and the lender agrees to not repossess the vehicle. In some cases you can use a reaffirmation agreement to rewrite the original agreement. This can be useful if you have missed a few payments or need to reduce your interest rate.

If your vehicle is substantially “upside down,” you may want to consider a redemption. In a redemption, the debtor pays the lender the fair market value of the vehicle. The payment is made in a lump sum which usually requires another loan at a high interest rate. However, for a car that is worth thousands less than what is owed, the new monthly payment could be hundreds less – even with the high interest rate.

The final option is surrender. Sometimes just walking away from a lemon or a bad deal is the best choice. In a Chapter 7 bankruptcy, you simply turn over the car to the lender and owe nothing. There is no prohibition against buying a different vehicle during or after your bankruptcy case. If you need to purchase a different vehicle, speak with your bankruptcy attorney.

The United States bankruptcy laws contain powerful provisions for protecting property and reducing debt. There are many options available in Chapter 7 or Chapter 13 cases. Consult with an experienced bankruptcy attorney and explore your options under the federal law.

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Chapter 7 Bankruptcy Timeline

Wednesday, February 15th, 2012

The most common type of bankruptcy case is the Chapter 7 no asset case. In this case the debtor does not lose any property and unsecured creditors (e.g. credit card companies and medical bills) receive nothing. A Chapter 7 no-asset bankruptcy is usually a “quick and easy” process. The following timeline describes the process:

Meet Your Attorney

Your attorney will listen to your concerns, identify legal issues concerning your debts, and recommend legal solutions. While bankruptcy is not always the best option to solve a financial problem, it is a powerful tool that should be considered. Your attorney will also ask you to provide financial documentation such as tax returns, titles and deeds, and paystubs. Your attorney will take this information and draft a bankruptcy petition.

Credit Counseling

Before you can file bankruptcy you must meet receive credit counseling from an approved credit counseling agency. Your attorney will recommend an agency that is approved.

Sign and File Your Bankruptcy

Once the petition is drafted, you will meet with your attorney to review and sign your bankruptcy petition and schedules. You must verify the contents of your bankruptcy filing under penalty of perjury, so it is important to carefully review this document. You must also pay your court filing fee (currently $306).

Attend Financial Management Class

After your case is filed you will attend a course in personal financial management from an approved agency. This course must be completed before the court can enter a discharge, so you might as well get it out of the way as soon as possible.

Section 341 Meeting of Creditors with Trustee

The bankruptcy court will send out notices of your Meeting of Creditors. Your meeting will take place between 30 and 45 days after your case is filed. While creditors do not typically attend this meeting, you will answer questions under oath from the Chapter 7 Trustee about your debts and property.

Trustee’s Report

The Chapter 7 Trustee’s report is due to the bankruptcy court within 10 days after your Meeting of Creditors has concluded. This report states that the Trustee has completed a review of the case and that there are no assets to administer.

Wait

Creditors have 60 days after the date first set for the Meeting of Creditors to file an objection in your case. Objections are rare, especially in Chapter 7 no asset cases.

Discharge and Conclusion

If no objection is filed and all other requirements are satisfied, the bankruptcy court will enter an order discharging your debts, and soon thereafter it will close your case.

Every bankruptcy case is different and some cases do not follow the timeline described above. An experienced bankruptcy attorney will conduct an investigation of your finances and can give you a very good indication of what to expect during your bankruptcy, including how long it will take.

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Nevada Chapter 7 Means Test Numbers to Change in November

Wednesday, November 9th, 2011

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which among other things made it harder for people to file bankruptcy in Chapter 7. The banks feared that people were abusing the bankruptcy system by discharging their unsecured debts even though they could make the regular payments. As a result, the new law requires that people filing bankruptcy make less than their state’s median income in order to qualify for Chapter 7. If their incomes were greater, i.e. they failed the means test, then they would have to file in Chapter 13 or Chapter 11.

For those filing bankruptcy in Las Vegas under Chapter 7, it’s important to know that the numbers change roughly twice per year. This can influence whether it will be possible for you to file should you so choose. Thankfully, the U.S. Department of Justice provides the current and new numbers that will go into effect in November.

As of now [http://www.justice.gov/ust/eo/bapcpa/20110315/bci_data/median_income_table.htm], single earners making more than $43,041 will be ineligible to file bankruptcy in Chapter 7. For families of two, three, or four persons, the numbers are $57,541, $60,783, and $70,509, respectively. For larger families, add $7,500 for each additional family member.

For cases filed on or after November 1, 2011 [http://www.justice.gov/ust/eo/bapcpa/20111101/bci_data/median_income_table.htm], the new median will be $43,146, which is only slightly higher than the previous one. For families of two, three, or four, the new numbers will be $55,573, $60,855, $65,179, and $7,500 for each additional family member beyond four. Apparently, it will be easier for earners in larger families to file Chapter 7 bankruptcy in Las Vegas.

The means test is not the only aspect of Chapter 7 bankruptcy, so it’s important to know all your options by consulting with an experienced Las Vegas bankruptcy attorney.

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 702-880-5554 today!

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Nevada Chapter 7 Means Test Numbers to Change in November

Monday, October 24th, 2011

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act, which among other things made it harder for people to file bankruptcy in Chapter 7. The banks feared that people were abusing the bankruptcy system by discharging their unsecured debts even though they could make the regular payments. As a result, the new law requires that people filing bankruptcy make less than their state’s median income in order to qualify for Chapter 7. If their incomes were greater, i.e. they failed the means test, then they would have to file in Chapter 13 or Chapter 11.

For those filing bankruptcy in Las Vegas under Chapter 7, it’s important to know that the numbers change roughly twice per year. This can influence whether it will be possible for you to file should you so choose. Thankfully, the U.S. Department of Justice provides the current and new numbers that will go into effect in November.

As of now [http://www.justice.gov/ust/eo/bapcpa/20110315/bci_data/median_income_table.htm], single earners making more than $43,041 will be ineligible to file bankruptcy in Chapter 7. For families of two, three, or four persons, the numbers are $57,541, $60,783, and $70,509, respectively. For larger families, add $7,500 for each additional family member.

For cases filed on or after November 1, 2011 [http://www.justice.gov/ust/eo/bapcpa/20111101/bci_data/median_income_table.htm], the new median will be $43,146, which is only slightly higher than the previous one. For families of two, three, or four, the new numbers will be $55,573, $60,855, $65,179, and $7,500 for each additional family member beyond four. Apparently, it will be easier for earners in larger families to file Chapter 7 bankruptcy in Las Vegas.

The means test is not the only aspect of Chapter 7 bankruptcy, so it’s important to know all your options by consulting with an experienced Las Vegas bankruptcy attorney.

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 by calling us at 702-880-5554.

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Clients Must Pay Chapter 7 Attorney Fees Up Front

Tuesday, September 27th, 2011

Attorneys have many obligations to their clients. Chiefly, an attorney is expected to represent a client honestly, zealously, and independently. Conflicts do not occur very often for attorneys who represent debtors in consumer bankruptcy cases. However, a conflict between an attorney and bankruptcy client can arise when the attorney is owed attorney fees.

Individual Chapter 7 bankruptcy debtors are typically required to pay three different fees before or at the time the bankruptcy case is filed: a fee for the pre-bankruptcy credit counseling class; the bankruptcy court filing fee, and attorney fees. Unlike Chapter 13 cases where attorney fees may be paid over time after the case is filed, an attorney representing a Chapter 7 debtor must receive any attorney fees before the case is filed. This is because any debt incurred before the case is filed is subject to the bankruptcy discharge. This means that any fees that you may owe your attorney can be discharged. Additionally, your bankruptcy filing prohibits all creditors from attempting to collect on a pre-bankruptcy debt. Your attorney cannot even send you a bill without violating the bankruptcy court’s orders!

While every bankruptcy attorney knows these rules, some less-scrupulous attorneys try to get around the rules through inventive strategies. One such scheme was recently exposed in a lawsuit against Clark & Washington, a large Atlanta law firm that advertises itself as “Georgia’s Largest Bankruptcy Filer.” A class action lawsuit filed by former clients alleges that the firm cashed postdated client checks written for pre-bankruptcy attorney fees after the clients’ Chapter 7 cases were filed. The petition also states that Clark & Washington attorneys did not inform their clients that the post-dated checks were dischargeable through their bankruptcy cases, and cashed the checks after the cases were filed or discharged. Even more egregiously, the class claims that Clark & Washington attorneys did this after a federal bankruptcy judge told them to stop.

The suit makes reference to a July 12 order in which U.S. Bankruptcy Judge Michael Williamson enjoined Clark & Washington from accepting postdated checks as payment of its attorney’s fees for bankruptcy cases filed in Tampa, Florida.  Judge Williamson said that the practice of depositing postdated checks after the filing of a bankruptcy case violates the Bankruptcy Code and creates a conflict of interest between an attorney and client.

Don’t fall prey to short-cut law firms advertising low fees and big promises. Your serious legal problem deserves serious representation from an experienced bankruptcy attorney. Call today and get the facts you need to make the right decision from an attorney who will represent you honestly, zealously, and independently.

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Chapter 7 Debtors Should Beware Hoggish Behavior

Monday, September 12th, 2011

There is an old saying among bankruptcy attorneys, “Pigs get fat and hogs get slaughtered.” Bankruptcy attorneys know that the bankruptcy laws are intended to give an honest debtor a fresh start. There are many provisions to protect bankruptcy debtors and a fair and reasonable amount of property needed to start fresh. In most cases the debtor is able to retain equity in personal property and even real estate. On the other hand, bankruptcy courts can (and do) penalize Chapter 7 debtors who appear to be abusing the bankruptcy system.

Take for instance the interesting case of In re Vogeler. When Mr. Vogeler filed his Chapter 7 bankruptcy, he was unemployed and owed a car loan of $11,000 and $35,925 of unsecured debt. Just one month after filing, he received $90,000 in net proceeds from the Kansas lottery! The bankruptcy trustee caught wind of Mr. Vogeler’s good fortune and instructed him to not spend the lottery proceeds. Mr. Vogeler did not listen to the trustee and spent his winnings on new cars and various, non-emergency personal expenses.

The bankruptcy court decided that it would be an abuse to grant Mr. Vogeler a discharge based on the totality of his circumstances. The court pointed out that, “First, debtor entered bankruptcy with approximately $47,000 of debt. Second, a month later, debtor received more than $90,000. Debtor, without explanation, opted to spend his lottery winnings on new items rather than attempt to address the debt with which he entered bankruptcy. Debtor enjoyed his lottery winnings at a time when the automatic stay kept his then-existing creditors from executing on his good fortune. Debtor failed to satisfactorily explain the dissipation of the lottery proceeds. Debtor has been shown to have had significant ability to pay his pre-petition debts.”

The bankruptcy court denied Mr. Vogeler a discharge and said he was not an unfortunate debtor entitled to a fresh start. On the contrary, debtor was fortunate and could have repaid all of his creditors. The court denied the discharge because it would have given the debtor a “head start” instead of a “fresh start.”

Typically, a small bonus or increase to a debtor’s income after filing will not affect a Chapter 7 case. However, any post-petition increases in income should be discussed with your attorney. With help from your attorney, you can emerge from bankruptcy with your discharge and avoid being slaughtered.

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Chapter 7 Debtors Should Beware Hoggish Behavior

Tuesday, September 6th, 2011

There is an old saying among bankruptcy attorneys, “Pigs get fat and hogs get slaughtered.” Bankruptcy attorneys know that the bankruptcy laws are intended to give an honest debtor a fresh start. There are many provisions to protect bankruptcy debtors and a fair and reasonable amount of property needed to start fresh. In most cases the debtor is able to retain equity in personal property and even real estate. On the other hand, bankruptcy courts can (and do) penalize Chapter 7 debtors who appear to be abusing the bankruptcy system.

Take for instance the interesting case of In re Vogeler. When Mr. Vogeler filed his Chapter 7 bankruptcy, he was unemployed and owed a car loan of $11,000 and $35,925 of unsecured debt. Just one month after filing, he received $90,000 in net proceeds from the Kansas lottery! The bankruptcy trustee caught wind of Mr. Vogeler’s good fortune and instructed him to not spend the lottery proceeds. Mr. Vogeler did not listen to the trustee and spent his winnings on new cars and various, non-emergency personal expenses.

The bankruptcy court decided that it would be an abuse to grant Mr. Vogeler a discharge based on the totality of his circumstances. The court pointed out that, “First, debtor entered bankruptcy with approximately $47,000 of debt. Second, a month later, debtor received more than $90,000. Debtor, without explanation, opted to spend his lottery winnings on new items rather than attempt to address the debt with which he entered bankruptcy. Debtor enjoyed his lottery winnings at a time when the automatic stay kept his then-existing creditors from executing on his good fortune. Debtor failed to satisfactorily explain the dissipation of the lottery proceeds. Debtor has been shown to have had significant ability to pay his pre-petition debts.”

The bankruptcy court denied Mr. Vogeler a discharge and said he was not an unfortunate debtor entitled to a fresh start. On the contrary, debtor was fortunate and could have repaid all of his creditors. The court denied the discharge because it would have given the debtor a “head start” instead of a “fresh start.”

Typically, a small bonus or increase to a debtor’s income after filing will not affect a Las Vegas Chapter 7 Bankruptcy case. However, any post-petition increases in income should be discussed with your attorney. With help from your attorney, you can emerge from bankruptcy with your discharge and avoid being slaughtered. For a free Las Vegas bankruptcy consultation, contact Haines & Krieger at 702-880-5554.

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