Overwhelming debt causes a great deal of stress. You may lose sleep, become angry, or get scared. Fortunately, the federal bankruptcy laws can restructure your debts, provide a fresh start and alleviate your stress. However, it is critical that you play by the rules. A man in Tama County, Iowa, recently discovered the importance of honesty and fair dealing during …
The Trustee Wants to Know: “What’s in Your Wallet?”
The Ninth Circuit case of Shapiro v. Henson stands as a warning to all bankruptcy debtors: be sure what is actually in your bank account on the day your bankruptcy case is filed. The Chapter 7 trustee requires bank account records and will compare that balance to the amount listed on your bankruptcy schedules. When the amount in your bank …
Can the Bankruptcy Judge Make Me Quit Smoking?
During the bankruptcy process, the debtor is asked to account for all monthly expenses on bankruptcy Schedule J, which includes categories such as food, clothing, mortgage/rent, medical, and transportation. However, Schedule J is neither complete nor exclusive. Everyone spends their money differently, and bankruptcy judges are often called upon to decide whether an expense is reasonably necessary for the maintenance …
Revoking Debtor’s Discharge
A primary goal in nearly every Chapter 7 case is the bankruptcy court’s discharge order which forever and completely eliminates many of the debtor’s financial burdens. The discharge order is a powerful injunction that stops collection and harassment over the discharged debt. But not every Chapter 7 debtor receives a discharge, a bankruptcy discharge is reserved for the honest debtor. …
Can I Get Rid of Payday Loans in Bankruptcy?
Payday loan companies offer a short-term loan of a few hundred dollars that will be repaid on the borrower’s next payday. To obtain the loan the borrower usually writes a post-dated check to the lender. Often the payday loan lender will require a statement that the borrower is not considering bankruptcy, and, sometimes, that the borrower will not file bankruptcy …
Stop Foreclosure with Bankruptcy
Filing a personal bankruptcy case will stop a judicial or nonjudicial foreclosure, whether or not the foreclosure was begun before the bankruptcy. See 11 USC § 362 (a). The only notable exception to the automatic stay is for foreclosures brought by the Secretary of HUD on federally insured mortgages for real estate involving five or more units. See 11 USC …
Sales Tax, Trust Fund Tax, and Bankruptcy
Contrary to popular myth, bankruptcy does not discharge every financial obligation. Congress has identified a few debts that, in fairness, should not be discharged in a bankruptcy case. Some of these debts are enumerated in Section 523 of the Bankruptcy Code, including debts for fraud or embezzlement, domestic support obligations, and student loans. Some of these debts are never dischargeable, …
Report: Many States Put Families at Mercy of Debt Collectors
No state adequately protects families from debt collectors, according to a new report from the National Consumer Law Center (NCLC). The report, entitled No Fresh Start: How States Let Debt Collectors Push Families into Poverty, examined state exemption laws which control what assets and income a judgment creditor can seize to satisfy its judgment. The authors concluded that no state …
Surrendering Property After Chapter 13 Confirmation
Bankruptcy law is a balancing act between the rights of the debtor and his creditors. In Chapter 7 liquidation cases, the judicial calculus is fairly simple: take everything you own, subtract legal exemptions, sell what’s left to pay creditors, and discharge the rest. Because Chapter 7 debtors are generally “broke,” most Chapter 7 debtors lose no property and pay no …
Three Reasons to Consider Bankruptcy in Early Fall
It is always a good time to consider solving your financial problems, but the fall season is an especially good time to seek professional help. Below are three reasons to consider bankruptcy in the early fall. Reason Number One: Tax Refunds When you file Chapter 7 bankruptcy, an accounting is made of all of your property and it is all …
