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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.

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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8 Pieces of Las Vegas Advice for Paying Down Credit Card Debt

Friday, May 4th, 2012

Most people who file Chapter 7 Las Vegas bankruptcy have a large amount of credit card debt. Sometimes it’s owed to their banks, other times a local retailer. Credit card debt is nasty due to high interest rate, and relentless debt collectors. By the time people who have a lot of credit card debt consider seeing a Las Vegas bankruptcy lawyer, they are often way in the hole and should have done so earlier. That said, there are some things debtors can do to reduce their credit card debt.

(1)  Obtain a credit report from one of the three credit reporting bureaus. You are allowed one free credit report per agency per 12-month period. This will allow you to assess how much you owe and to whom.

(2)  If you have difficulties controlling your credit purchases, ditch the credit card. This is the necessary first step, and some people have fewer difficulties with it than others. One suggestion is to freeze it in a block of ice. That way, if you need it, you can thaw it out. And no, freezing it won’t damage the magnetic strip.

(3)  On the spending side, try setting aside a cash budget. This requires going to your bank, withdrawing an amount of money necessary for each month, and paying for everything by cash only. It can be tedious, and you’re welcome to deposit any loose change you have when you visit the bank as well, but you don’t pay interest on cash. Just make sure to keep it safe.

(4)  One of the more counterintuitive suggestions for dealing with debt is to start saving money. People might think that getting out of debt ASAP is the main goal. In reality, creating a cushion for emergencies is important. Try to maintain at least one month’s worth of expenses in savings. Ideally, you should have more, such as six months. Try to keep at least $1,000 around for emergencies.

(5)  Organize your budget. Some people like to do so physically, such as by separating money into envelopes according to their expenses. Other people use spreadsheets, which can be quite effective in identifying needless expenses.

(6)  When it comes to paying down debts, some experts suggest paying off the smaller, lower interest debts first and then tackling the larger ones. The idea is that satisfying the smaller debts will improve your morale and motivate you to pay off the larger ones.

(7)  Other experts caution that debts that constitute 30 percent or more of your credit line should take priority. Bringing those below 30 percent helps your credit score.

(8)  If you plan on transferring debt to one or more credit cards with lower rates, make sure the fees they charge are affordable. Do not move your debts around to make monthly payments. What does not work for Enron will not work for you.

Debt without sufficient income is a real burden on American families, but if you have a large amount remember that bankruptcy is an available option. An experienced Las Vegas bankruptcy lawyer can help you negotiate your debt down, fight collection and foreclosure efforts, or help you file a successful Chapter 7 or Chapter 13 bankruptcy.

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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6 Things for Las Vegas Residents to Do to Prepare for the ‘Foreclosure Flood’

Friday, April 20th, 2012

Nevada is well known for its high number of underwater mortgages. In fact it’s the highest in the country and higher than the total amount of housing equity in the state. The good news, though, was that households facing foreclosure had a reprieve. However, according to a new CNN Money article [http://money.cnn.com//2012/04/13/real_estate/foreclosures/index.htm] banks will resume foreclosing on owners not paying their bills. Until recently the national average for the time it takes for a foreclosure to occur was 370 days. That’s about to change, and here are some things you can do about it.

(1)  If you haven’t been paying your bills, access your credit report (it’s free) and consult with a financial planner and experienced Las Vegas bankruptcy attorney. If you haven’t been paying or your home is underwater, you have several options:
(2)  Just let it happen. This is the worst option. A foreclosure severely impacts your credit worthiness.
(3)  Offer your bank the deed in lieu of foreclosure. This is slightly better. The benefits are that a foreclosure doesn’t appear on your credit report, and the bank might cancel your deficiency. Although, it probably won’t.
(4)  Short-sell your home. Here, you sell the home to a third party while you and the bank negotiate what happens to the deficiency.
(5)  Get a mortgage modification. A modified loan results in a lower interest rate, meaning your have lower payments. Banks facing a defaulted mortgage might not be willing to negotiate in these circumstances.
(6)  File bankruptcy. If you haven’t paid on one or more of your mortgages for a while, bankruptcy might be your best option. Once you file, you will benefit from the automatic stay, which halts an foreclosure action against your property, and after a successful Chapter 13 plan, the lien from secondary mortgages is stripped from your home.

It’s possible that you are eligible for some of the $26 billion settlement that the banks promised to apply to underwater properties. If so, consult with a professional to see how that changes your situation. If you’re current on your payments and only slightly underwater, then you may benefit quite a bit. If you’re facing a foreclosure after many months of nonpayment, then bankruptcy might still be a better alternative in the long run.

Strategizing for dealing with an underwater home or one facing foreclosure is a fact-intensive process, which is why you shouldn’t go it alone and hire an experienced Las Vegas bankruptcy attorney to handle your case.

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 to set up your free consultation.

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6 Facts You Need to Know about ‘Bankruptcy Risk Scores’

Friday, March 2nd, 2012

Credit scores are so ubiquitous that people often don’t realize that it’s created by one private company to assist banks in approving or denying consumers’ access to credit. Some banks don’t even use them. The result is that people care very deeply about one score, and while they shouldn’t get too wrapped up in it, maintaining good credit is good for its own sake. What most people don’t know about is what banks call a “Bankruptcy Risk Score,” which serves the exact purpose its name suggests. Here are six facts you should know about bankruptcy risk scores.

(1)  Although most consumers don’t know about Bankruptcy risk scores, banks have been using them for almost 20 years. Some credit card companies started crafting their own versions in the late 1990s by tracking people’s charges and spending habits.

(2)  Creditors use bankruptcy risk scores as a secondary tool to assessing consumers’ credit, after their credit scores. Banks can get a better idea of how much risk is in their portfolios when they gauge how much capital they need to have on hand to back it up their debts for regulatory purposes.

(3)  According to bankrate.com, [http://www.bankrate.com/finance/debt/do-you-know-your-bankruptcy-risk-score--1.aspx] “[T]he score typically surfaces when a consumer gives the bank permission to pull his credit report during the application process for a new loan, bank card or credit card, and during the periodic review of clients’ accounts to determine whether to increase a consumer’s credit limit.”

(4)  Unlike credit scores, bankruptcy risk scores are meant for lenders only and aren’t available to consumers. Companies claim they’re afraid people will reverse-engineer the formulae behind the score, which is proprietary information.

(5)  Credit scores and bankruptcy risk scores differ. Credit scores run from 350-850 points while bankruptcy risk scores actually start below zero and can go as high as 2,000 points. For credit scores, higher numbers are good while the opposite is true for bankruptcy risk scores.

(6)  Nevertheless, bankruptcy risk scores contain some variables from credit scores: how much credit consumers are using, the frequency of their payments, and how many credit inquiries they’ve made recently.

(7)  Likewise, timely payments, low balances, and no more accounts than necessary will keep one’s bankruptcy risk score low and their credit scores high.

Since it’s difficult to find out what one’s bankruptcy risk score is, there’s little point in worrying about it. If you are suffering credit difficulties, though, consulting with a bankruptcy attorney might be a good idea as bankruptcy can help you deal with your debt by reducing it or discharging it entirely.

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 to set up your free consultation.

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5 Differences Between Tax Income and Bankruptcy Income in Las Vegas

Saturday, February 18th, 2012

Since the 2005 changes to the Bankruptcy Code, the biggest question for Chapter 7 Las Vegas bankruptcy debtors is, “What’s your income?” Congress believed people were abusing Chapter 7 by discharging large amounts of unsecured debt even though they had the income available to pay those debts as they came due. As a result, it required all Chapter 7 petitioners to satisfy a “means” test before proceeding with their cases. The means test requires that petitioners’ incomes over the previous six calendar months be less than their state’s median income. It’s an arbitrary number, but that’s what Congress chose.

Unfortunately, before petitioners can answer, “What’s your income?” they ask, “What is income?” The answer: Not necessarily what the IRS or state revenue authorities count as income. Since the purpose of the means test is to determine the debtor’s “average monthly income” over the previous six months, the calculation ends up being different. The following aren’t income for income tax purposes but are for bankruptcy:

(1)  Inheritances

(2)  Gifts

(3)  Child support

(4)  Disability payments

(5)  A spouse’s income, if he or she isn’t filing

There are exceptions, the biggest being Social Security payments, but sometimes unemployment checks are excepted as well, though some bankruptcy courts believe unemployment replaces wages and should therefore be taxed. Usually only net gains are counted as income, for instance, the full income from a home sale wouldn’t count, just its appreciation in value. Because the means test period includes only the previous six calendar months, if a petitioner receives an annual bonus, it counts as his or her income; on the other hand, if the bonus occurred seven months earlier, it doesn’t count at all. This illogic allows Las Vegas bankruptcy attorneys to strategically plan bankruptcies around debtor’s annual windfalls. Again, some bankruptcy courts are addressing this by pro-rating things like bonuses but not teachers’ incomes because they don’t work in the summer.

If you have a lot of debt and various sources of income, filing a Chapter 7 bankruptcy can be quite a confusing challenge. Hiring an experienced Las Vegas bankruptcy attorney is the best way to ensure that your income is counted fairly to see if you pass the means test.

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 to set up your free consultation.

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6 Steps to Assuming a Defaulted Lease in a Chapter 13 Bankruptcy

Monday, January 30th, 2012

Sometimes, when people file Las Vegas bankruptcies in Chapter 13, they have a lease that they’ve defaulted on. If the term of the lease hasn’t expired, then the petitioner might be able to assume the lease, that is, resume payments and maintain access to whatever they’re leasing. In most circumstances this is an apartment or a car. The Chapter 13 payment plan allows petitioners to assume defaulted leases, and the bankruptcy code elaborates on these rules in § 365. Here are the steps involved.

(1)  The bankruptcy code doesn’t allow debtors to simply resume payment on the defaulted lease as though nothing has happened. They must either cure the default or at least convince courts that they will “promptly” cure the default.

(2)  If they can cure the default then and there, they must only convince the court that they will be able to make the future payments. More on that later.

(3)  If they can’t cure the default immediately, debtors will have to convince the court that they will cure it. In practice, this usually means structuring the Chapter 13 payment plan to include extra payments to the lessor (the party debtors are leasing property from) over a period of time to cover the default. Once the extra payments are concluded, the default is cured.

(4)  Unfortunately, lessors will sometimes challenge a debtor’s repayment plan as not “promptly” curing the default as defined in the bankruptcy code. Some courts allow shorter or longer periods.

(5)  Even if the bankruptcy court finds the plan acceptable, petitioners must convince it that they will be able to make future payments.

The problem is that sometimes the “cure period” the court allows will be shorter than the amount of time it takes to have the overall plan confirmed, which will prevent the petitioner from assuming the lease at all. If this happens, petitioners can either file a motion for an interim distribution to allow the Trustee to pay the lessor before the plan is confirmed. Courts have a lot of leeway in determining what is “prompt,” and since we’re usually talking about important things like apartments or cars, these types of plans rarely run into difficulties.

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 to set up your free consultation.

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Top Five Don’ts Before Filing Las Vegas Bankruptcy

Friday, January 20th, 2012

Many people start financial planning when the decision is made to file bankruptcy. Financial planning is good, but doing it yourself can be disastrous. In particular, there are five activities that can cause serious problems in your bankruptcy case, so today’s article is a list of the top five activities to avoid before you file bankruptcy.

  1. Don’t use credit cards. In bankruptcy, as in life, honesty is the best policy. Using credit when you have no intention on repaying is fraud and you can be charged with a crime! The bankruptcy code gives the credit card company legal advantages when credit is used just prior to filing bankruptcy. The result is often that you have to repay credit you use just before filing bankruptcy. Consult with your bankruptcy attorney before you use a credit card convenience check, transfer a credit card balance, take a cash advance, or go on a spending spree.
  2. Don’t transfer property. Transfers just before bankruptcy must be identified and the bankruptcy trustee will take a special interest in your case. The bankruptcy trustee always assumes the worst and will look on any transfer with suspicion. Illegal transfers can be voided by the trustee and you may lose your right to protect the property. For instance, let’s say you sold your car worth $3,000 to your adult daughter for $1. Since this is not an arm’s length and fair transaction, the trustee can avoid the transfer, and force your daughter to turn over the car to the trustee. Since you did not own the car when you filed, you are not entitled to protect the vehicle with your legal exemptions. The trustee will now sell the car to pay your creditors and you lost a $3,000 asset. If you want to sell or transfer property, speak with your bankruptcy attorney. Your attorney can show you the right way to transfer the property without causing a legal mess.
  3. Don’t repay loans to friends or family. Money used to repay a loan to a friend or family member within a year of your bankruptcy filing can be avoided by the bankruptcy trustee. The trustee can sue your friend or family member for the money.
  4. Don’t pay more than $600 to one creditor. Like payments to friends or family members, payments that exceed $600 to any one creditor within 90 days of the bankruptcy filing can be avoided. Speak with your bankruptcy attorney before paying creditors.
  5. Don’t cash out retirement plans or 401k’s. Retirement plans are often fully protected by bankruptcy laws, so do not touch these accounts until after you file bankruptcy. Once the money is moved it is more difficult to protect and you may lose your retirement funds.

The bankruptcy code contains many traps for the unwary. A bankruptcy professional can help you avoid these common traps. Don’t wait to speak with a bankruptcy attorney and discuss your financial situation. Get experienced advice on how to obtain the help you need. Call to set up a free consultation with a Haines & Krieger Las Vegas bankruptcy attorney by calling 702-880-5554.

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6 Reasons Not to Hire a Bankruptcy Petition Preparer in Las Vegas

Saturday, November 19th, 2011

People on the verge of a Las Vegas bankruptcy frequently have difficulty assembling the money necessary to pay their lawyers. As a result, they find ways to cut costs, and one way of doing it—so they’re led to believe—is to hire a bankruptcy petition preparer. There are 6 reasons to avoid this route.

  1. Petition preparers cannot give any kind of legal advice. Bankruptcy lawyers work more with the law-side of issues than factual ones, which tend to be the same. Thus, which chapter to file in and the benefits of those chapters are off-limits. The other big question is which exemptions debtors should claim. These are often the most crucial legal issues that petitioners need answers to.
  2. Petition preparers are watched closely by bar authorities to ensure that they aren’t violating unauthorized practice of law statutes. These laws are designed to protect people from unscrupulous and incompetent representation.
  3. Bankruptcy lawyers are professionals who know important information outside bankruptcy topics. Often petitioners need help with the tax implications of filing bankruptcy or its affects on their retirement income. Petition prepares do not necessarily know these things.
  4. Bankruptcy lawyers are also required to honor your private information by keeping it confidential.
  5. The bankruptcy code devotes a section to petition preparers, and gives debtors legal remedies if preparers make errors. [http://codes.lp.findlaw.com/uscode/11/1/110]
  6. According to the U.S. Trustee’s Office (http://www.justice.gov/ust/r05/docs/general/guidelines/bank_pet_prep.pdf), petition preparers are only allowed to type documents for a reasonable fee. That is the limit of their function. A trip to the local public library and you can do this for a lot less.

There you have it. An experienced Las Vegas bankruptcy lawyer is far more valuable to your bankruptcy case than paying a typist to save money.

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 702-880-5554.

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4 Pros and 4 Cons of Settling a Second Mortgage for Las Vegas Residents

Friday, November 18th, 2011

It’s common for people considering filing a Las Vegas bankruptcy to have a second mortgage on their homes when the first one is already underwater; in other words, they owe more on their first mortgages than their houses are worth, leaving zero equity in their second mortgages or home equity lines of credit. They have many options for how to handle this situation, including discharging it in bankruptcy. Here are the pros and cons of settling an underwater second mortgage.

Pros:

  1. If you are delinquent on payments the creditor knows you are in trouble. If that’s the case, then it knows that you have options that will allow it to make nothing, e.g. going into foreclosure or filing bankruptcy. Consequently, the lender may be quite happy to receive ten to fifteen cents on the dollar rather than lose everything.
  2. If your financial situation is precarious but not so much that you will be forced into bankruptcy, then you can use the threat of bankruptcy as leverage in negotiations with the second creditor. The settlement won’t appear on your credit score, and you’ll be able to refocus your earnings on rebuilding your equity in your primary mortgage.
  3. Similarly, if the settlement keeps you out of foreclosure, so much the better. Nothing makes life more difficult than a foreclosure on a credit report.
  4. If you suffer foreclosure, the deficiency can stay on your credit report for a very long time, and creditors have the advantage of long statutes of limitations to collect on them. Settling the mortgage prevents being hunted down by zombie debt collectors later.

Cons:

  1. If you or your partner loses a job or suffers an injury, then the settlement will mean nothing in the face of the lost income. At that point, you will likely have to file bankruptcy.
  2. The second mortgage is unsecured, which means it is fully dischargeable in bankruptcy. Fearing the consequences of bankruptcy is far worse than paying more on a mortgage when you don’t have to.
  3. Some lenders will refuse to settle if you are current on your payments. To them, you just entered into a bad deal and must deal with the consequences.
  4. People settling on mortgages will be surprised to know that they must pay income tax on the forgiven sum. This comes in the form of the dreaded IRS From 1099-C. In these circumstances bankruptcy may be better.

Settling with a second mortgagee may help homeowners, but bankruptcy is still probably the better option over the long term. It helps to have an experienced Las Vegas bankruptcy attorney at one’s side.

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 today at 702-880-5554.

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Debt Collectors Must Obey The Law

Friday, October 7th, 2011

The Washington Post recently reported that a Southern California debt collection firm has been shut down by the Federal Trade Commission for violating debtor harassment laws. What makes this story especially newsworthy is the outrageous accusations against the collection company, including threats against a family pet and digging up a corpse!

The FTC halted operations and froze the assets of a debt collection business that operated under a variety of names.  The company’s owners are charged with violating the Federal Trade Commission Act and Fair Debt Collection Practices Act. The FTC alleges that a collector for the company unlawfully threatened a woman who owed money on her daughter’s funeral bill. She was told that they were going to dig up the body and hang her from a tree if she didn’t pay. She was also told that they would take her dog and eat it.

Federal laws protect consumers from these types of outrageous threats. The Fair Debt Collection Practices Act, or FDCPA, is one federal law that protects against abusive collection practices by third party collectors. Third party collectors include collection agencies and collection attorneys. The FDCPA does not apply to business debts or to original creditors. The FDCPA prohibits certain abusive practices including:

  • Telephone calls before 8 a.m. or after 9 p.m. (your time);
  • Requesting payment beyond what is actually owed;
  • Using abusive, profane or obscene language;
  • Threatening legal action which is not permitted by law (e.g. criminal action);
  • Telephone calls at work after being instructed that your employer prohibits phone calls from debt collectors;
  • Contacting you directly after being instructed that you are represented by an attorney

Hiring a bankruptcy attorney provides immediate relief from creditor harassment under the FDCPA, and all collection action must cease the instant you file a bankruptcy case. This protection lasts the duration of your bankruptcy and is replaced with the bankruptcy discharge at the end of your case. A creditor who violates these bankruptcy prohibitions can face a contempt of court charge in the federal bankruptcy court.

Don’t let creditor harassment overwhelm your life. Take charge by consulting an experienced bankruptcy attorney about your debt and learn how the federal and state laws can protect your property, your income, and your peace of mind.

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