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Archives for January 2009

Foreclosure Fixes Failing

Posted on January 25, 2009 Written by

DATA: MORTGAGE “FORECLOSURE PREVENTION” FIXES FAILING TO WORK, U.S. HOME FORECLOSURE TOLL NOW EXPECTED TO RISE EVEN HIGHER TO EIGHT MILLION

Near Half of Homeowners in “Loan Modification” Programs Face Higher Monthly Payments; Failure of Voluntary Industry Efforts Hikes Pressure on Incoming Obama Administration, New Congress to Clear Way for Court-Supervised Modifications.

WASHINGTON, D.C.//December 19, 2008//Much hyped “foreclosure prevention programs” relying on voluntary loan modifications are failing to reach a significant number of troubled homeowners and are often backfiring when they do so, according to newly updated research released today by the National Association of Consumer Bankruptcy Attorneys (NACBA). The across-the-board failure of these much ballyhooed “fixes” for the foreclosure crisis are expected to result in the new President and Congress facing considerable new pressure to clear the way for court-supervised loan modifications that will prove more beneficial for homeowners. [Read more…]

Filed Under: Bankruptcy Legislation, Foreclosure, Mortgages

What Else Should I Know About Filing Bankruptcy?

Posted on January 14, 2009 Written by

Utility services–Public utilities, such as the electric company, can not refuse or cut off service because you have filed for bankruptcy. However, the utility can require a deposit for future service and you do have to pay bills which arise after bankruptcy is filed.

Discrimination–An employer or government agency can not discriminate against you because you have filed for bankruptcy. Government agencies and private entities involved in student loan programs also can not discriminate against you based on a bankruptcy filing.

Driver’s license–If you lost your license solely because you couldn’t pay court-ordered damages caused in an accident, bankruptcy will allow you to get your license back.

Co-signers–If someone has co-signed a loan with you and you file for bankruptcy, the co-signer may have to pay your debt.  If you file under chapter 13, you may be able to protect co-signers, depending upon the terms of your chapter 13 plan.

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Filed Under: Chapter 13, Filing Bankruptcy

Will Bankruptcy Affect My Credit?

Posted on January 13, 2009 Written by

There is no clear answer to this question. Unfortunately, if you are behind on your bills, your credit may already be bad. Bankruptcy will probably not make things any worse.

The fact that you’ve filed a bankruptcy can appear on your credit record for ten years from the date your case was filed. But because bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.

If you decide to file bankruptcy, remember that debts discharged in your bankruptcy should be listed on your credit report as having a zero balance, meaning you do not own anything on the debt. Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult or costly to get credit. You should check your credit report after your bankruptcy discharge and file a dispute with credit reporting agencies if this information is not correct.

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Filed Under: Filing Bankruptcy

What Else Must I Do to Complete My Case?

Posted on January 12, 2009 Written by

After your case is filed, you must complete an approved course in personal finances.  This course will take approximately two hours to complete.

Many of the course providers give you a choice to take the course in-person at a designated location, over the Internet (usually by watching a video), or over the telephone.

Your attorney can give you a list of organizations that provide approved courses, or you can check the website for the United States Trustee Program office at www.usdoj.gov/ust.

In a chapter 7 case, you should sign up for the course soon after your case is filed.  If you file a chapter 13 case, you should ask your attorney when you should take the course.

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Filed Under: Chapter 13, Chapter 7, Discharge, Filing Bankruptcy

Will I Have to Go to Bankruptcy Court?

Posted on January 11, 2009 Written by

In most bankruptcy cases, you only have to go to a proceeding called the “meeting of creditors” to meet with the bankruptcy trustee and any creditor who chooses to come.  Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation.

Occasionally, if complications arise, or if you choose to dispute a debt, you may have to appear at a hearing.  In a chapter 13 case, you may also have to appear at a hearing when the judge decides whether your plan should be approved.  If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney.

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Filed Under: Chapter 13, Chapter 7, Filing Bankruptcy

Will Bankruptcy Wipe Out All My Debts?

Posted on January 10, 2009 Written by

Yes, with some exceptions.  Bankruptcy will not normally wipe out:

  • Money owed for child support or alimony;
  • Most fines and penalties owed to government agencies;
  • Most taxes and debts incurred to pay taxes which can not be discharged;
  • Student loans, unless you can prove to the court that repaying them will be an “undue hardship”;
  • Debts not listed on your bankruptcy petition;
  • Loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;
  • Debts resulting from “willful and malicious” harm;
  • Debts incurred by driving while intoxicated;
  • Mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Filed Under: Discharge, Filing Bankruptcy

Tax Refund in Bankruptcy

Posted on January 10, 2009 Written by

Cathy Moran on the Bankruptcy Soapbox reminds us of an important asset in bankruptcy:  tax refunds.

Your federal and state income tax refunds are property of the bankruptcy estate when you file bankruptcy in Kansas.  That is true for all refunds you are entitled to receive on the date your bankruptcy is filed, which includes the refunds for the year you filed that you will not receive until the following spring.

Example:  You file bankruptcy in January 2009.  The tax refunds for 2008 you will receive in 2009 belong to the bankruptcy trustee.  The trustee also will be entitled to a pro rata share of the 2009 refund you receive in 2010.

Kansas has no bankruptcy exemptions for tax refunds or earned income credits.  Some states do.

In chapter 13 bankruptcy, your tax refunds for years after you filed, we call post-petition years, are also property of the estate.

It is a federal crime to spend a tax refund that should be turned over to the bankruptcy trustee.  Your bankruptcy discharge can be denied.  It does not matter how much you need the money. The refunds will be sent to you and it is very tempting to keep the money.  Stop and call your lawyer to make sure you understand exactly what you are required to do with your tax refunds!

Filed Under: Bad Outcomes, Fraud, Crimes, Chapter 13, Chapter 7, Exemptions & What You Get to Keep

Can I Own Anything After Bankruptcy?

Posted on January 9, 2009 Written by

Yes!  Many people believe they can not own anything for a period of time after filing for bankruptcy.  This is not true.  You can keep your exempt property and anything you obtain after the bankruptcy is filed.  However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Filed Under: Exemptions & What You Get to Keep, Filing Bankruptcy

What Will Happen to My Home and Car If I File Bankruptcy?

Posted on January 8, 2009 Written by

In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt.  Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13.

However, some of your creditors may have a “security interest” in your home, automobile, or other personal property.  This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt.  Bankruptcy does not make these security interests go away.  If you don’t make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case.

In a chapter 13 case, you may be able to keep certain secured property by paying the creditor the value of the property rather than the full amount owed on the debt.  Or you can use chapter 13 to catch up on back payments and get current on the loan. [Read more…]

Filed Under: Exemptions & What You Get to Keep, Filing Bankruptcy, Mortgages, Vehicles

Congress Considers Bankruptcy Change to Help Homeowners Stop Foreclosure

Posted on January 7, 2009 Written by

Senate Bill 61, Helping Families Save Their Homes in Bankruptcy Act of 2009 was introduced in the U.S. Senate yesterday.  A similar bill was introduced in the House of Representatives today and President-Elect Barrack Obama has vowed to sign such a bill on January 21, the day after he is sworn in as President of the United States.

The bill would lift the ban in the bankruptcy code on modifying a home mortgage down (cram down) to the value of the home in chapter 13 bankruptcy.  The bill also would allow a bankruptcy judge to modify the mortgage interest rate and repayment time so the homeowner could afford to stay in his home.  [Read more…]

Filed Under: Chapter 13, Kansas Bankruptcy News, Mortgages

What Property Can I Keep?

Posted on January 7, 2009 Written by

In a chapter 7 case, you can keep all property which the law says is “exempt” from the claims of creditors.

It is important to check the exemptions that are available in the state where you live.  (If you moved to your current state from a different state within two years before your bankruptcy filing, you may be required to use the exemptions from the state where you lived just before the two-year period.)

In some states, you are given a choice when you file bankruptcy between using either the state exemptions or using the federal bankruptcy exemptions.  If your state has “opted” out of the federal bankruptcy exemptions (Kansas has), you will be required to chose exemptions mostly under your state law.  However, even in an “opt-out” state, you may use a special federal bankruptcy exemption that protects retirement funds in pension plans and individual retirement accounts (IRAs). [Read more…]

Filed Under: Chapter 7, Exemptions & What You Get to Keep

What Must I Do Before Filing Bankruptcy? Alternatives to Consider

Posted on January 6, 2009 Written by

Some of the approved credit counseling agencies offer debt management plans (also called DMPs).  A DMP is a plan to repay some or all of your debts in which you send the counseling agency a monthly payment that it then distributes to your creditors.

Debt management plans can be helpful for some consumers.  For others, they are a terrible idea.  The problem is that many counseling agencies will pressure you into a debt management plan as a way of avoiding bankruptcy whether it makes sense for you or not.  You should not consider a debt management plan if making the monthly plan payment will mean you will not have money to pay your rent, mortgage, utilities, food, prescriptions, and other necessities.

It is important to keep in mind these important points: [Read more…]

Filed Under: Filing Bankruptcy

What Must I Do Before Filing Bankruptcy?

Posted on January 5, 2009 Written by

You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed.  The agency will review possible options available to you in credit counseling and assist you in reviewing your budget.  Different agencies provide the counseling in-person, by telephone, or over the Internet.  If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed.

Most approved agencies charge between $30/-/$50 for the pre-filing counseling.

If you decide to go ahead with bankruptcy, you should [Read more…]

Filed Under: Filing Bankruptcy

BAP10 Accepts Electronic Filings

Posted on January 5, 2009 Written by

The Bankruptcy Appellate Panel for the Tenth Circuit will accept electronic filing of pleadings starting today.  The U.S. Court of Appeals for the Tenth Circuit is expected to follow suit soon.

To participate in electronic filing, attorneys must register for an Appellate ECF login and password with the PACER Service Center and wait for the Court to respond.  This is login is different from the one used in bankruptcy court electronic case filing.  You may sign up for all participating circuit courts and bankruptcy appellate panels with one login, however.

For more information, you may contact the PACER Service Center or call (800) 676-6856.

Filed Under: Filing Bankruptcy, Kansas Bankruptcy News

Jane Bryant Quinn: Go Bankrupt in 2009

Posted on January 4, 2009 Written by

“The right time to go bankrupt is when you’re financially, stuck but still have assets to protect,” Newsweek financial columnist Jane Bryant Quinn tells her readers.  “If you are reaching the end of your rope, don’t try to hold on.  Save what you can.”

Saying she normally would tell readers to “suck it up, cut spending and repay your consumer debt,” this year she is risking her “good-girl reputation with a subversive idea:  go bankrupt in 2009”.  It is not always possible to pay debt “especially with an economic tsunami rolling over your home, job and health insurance.” [Read more…]

Filed Under: Chapter 7, Exemptions & What You Get to Keep, Filing Bankruptcy

What Does It Cost to File for Bankruptcy?

Posted on January 4, 2009 Written by

It now costs $299 to file for bankruptcy under chapter 7 and $274 to file for bankruptcy under chapter 13, whether for one person or a married couple.  The court may allow you to pay this filing fee in installments if you can not pay it all at once.

If you hire an attorney you will also have to pay the attorney fees you agree to. [Read more…]

Filed Under: Chapter 13, Chapter 7, Filing Bankruptcy
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