Home Archives for Filing Bankruptcy

Yes, You Can File Bankruptcy on Credit Cards

Posted on June 18, 2009 Written by

Here we are four years since the bankruptcy law was changed and people are still telling me you can’t file bankruptcy on credit cards.  Nothing could be further from the truth.  Yes, you can file bankruptcy on credit cards!

It just goes to show you the power of propaganda.  Creditors want you to believe that you can’t get rid of credit card debts in bankruptcy.  They want you to believe that bankruptcy is too difficult.  They want you to believe you can’t file bankruptcy.  They don’t want you to know the truth.

The truth is that most of our clients are able to get debt relief in bankruptcy as before.  The bankruptcy law has some new steps, mostly a credit counseling briefing to give you information about your options, an income test, and lots more paperwork, but most honest, middle-class Americans are able to get the financial fresh start they desperately need.

So, if you need bankruptcy help, don’t be scared off by the myths and false rumors.  Call Topeka, Kansas, bankruptcy specialists Mark Neis and Jill Michaux at Bankruptcy Law Office for the truth.

Filed Under: Filing Bankruptcy

Yes, You Can File Bankruptcy on Medical Bills

Posted on June 16, 2009 Written by

There is a myth floating around that you can’t file bankruptcy on your medical bills. Nothing is further from the truth. In fact, a study published in the June issue of the American Journal of Medicine reports that 62% of bankruptcy cases involve medical debt, a 50% increase in medical bankruptcies. Most people were middle class and 78% had health insurance. With the high cost of medical care and less and less health insurance benefits, most Americans are one illness or accident away from financial distress or ruin because of medical bills. Bankruptcy help is still available for medical bills.

Filed Under: Filing Bankruptcy, Financial Help

Bankruptcy Without Attorney is Bad Idea

Posted on June 14, 2009 Written by

Think again before you decide to represent yourself in bankruptcy.  Bankruptcy is a technical area of law full of traps for the unwary.  As the old saying goes a person who represents himself has a fool for a client.

Seriously, many people who have attempted to represent themselves in bankruptcy have gotten themselves into big trouble, have lost property they didn’t have to lose, and have cost themselves more time and money than a bankruptcy attorney would have cost.

If you do file your own bankruptcy and mess it up, [Read more…]

Filed Under: Bad Outcomes, Fraud, Crimes, Filing Bankruptcy

Bankruptcy Stops Garnishment

Posted on April 19, 2009 Written by

Yes, both wage and bank account garnishments can be stopped by filing bankruptcy.  Garnishments after the bankruptcy is filed violate the automatic stay.

Ideally, you will file bankruptcy before the garnishment order is served on your employer or bank so none of your money is seized.  But, if a garnishment order is already in place, seizure of post-bankruptcy wages and account funds is stopped.  You won’t get the money back that has already been seized, but future seizures are banned.

In Kansas, wage garnishments are continuing [Read more…]

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

What Would Jesus Say About Debts and Bankruptcy?

Posted on March 8, 2009 Written by

The Old Testament teaches the legal and moral obligation to pay just debts must be balanced with compassion and a call for cancellation of debts.  Jesus promoted debt forgiveness and preached the importance of placing love and compassion above greed and wealth.

In Luke 6:34-35, Jesus said: “And if you lend to those from whom you hope to receive, what credit is that to you? Even sinners lend to sinners, to receive as much again. But love your enemies and, do good, and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High; for he is kind to the ungrateful and the selfish.”

“The consistent teaching of both the Old and New Testaments is that compassion, mercy and justice are to override purely economic concerns, such as loans. Religious people are to be gracious to all, even debtors,” according to the essay, Forgive Us Our Debts.

Bible verses on debt and bankruptcy

Filed Under: Chapter 7, Discharge, Filing Bankruptcy

7 Bankruptcy Mistakes to Avoid

Posted on March 8, 2009 Written by

The actions an individual takes leading up to filing bankruptcy can drastically affect his or her ability to get a “fresh start“. By avoiding these seven mistakes, one can travel successfully through the bankruptcy process without losing a pound of flesh.

1. THE CREDIT CARD RUN-UP MISTAKE:
Don’t use your credit cards once you have made your decision to file bankruptcy. Consumer debts incurred for luxury goods and services owed to a single creditor in excess of $500.00 within 90 days of filing are presumed to be non-dischargeable and may be found to be due and owing. Cash advances of more than $750.00 within 70 days of filing are presumed to be non-dischargeable and may be found to be due and owing. Don’t jeopardize your “fresh start” by running up your credit cards.

2. THE REPAY A FAMILY MEMBER MISTAKE:
With regard to repaying debts, you cannot treat your family member any better than you would an ordinary creditor. In fact, a bankruptcy trustee can reclaim any amount repaid to a family member within one year of filing bankruptcy.

3. THE TRANSFER PROPERTY OUT OF YOUR NAME MISTAKE: [Read more…]

Filed Under: Bad Outcomes, Fraud, Crimes, Filing Bankruptcy

Will I Go to Jail if I Can't Pay My Debts?

Posted on March 7, 2009 Written by

Don’t worry.  We no longer have debtor’s prisons in America, thankfully.  The prisons of revolutionary times are past history.  It is not a crime to owe an ordinary debt and you won’t go to jail if you can’t pay.

But do pay attention to court orders and do attend any court hearings you are ordered to attend.  Judges have contempt powers and will issue a bench warrant for your arrest if you fail to appear in Court when you are ordered to do so.  The problem is not owing a debt, the problem is disobeying a court order.

Once of the advantages of filing bankruptcy is it puts an end to the debtor’s examinations by judgment creditors.  You won’t have to worry about missing court dates and bench warrants.  And, you won’t go to jail for filing  bankruptcy if you are honest, and make full disclosure and play by the rules.

Filed Under: Filing Bankruptcy

Will I Lose My Retirement Fund if I File Bankruptcy?

Posted on March 4, 2009 Written by

Question:  Is my retirement account I have worked hard for all my life down the drain if I file bankruptcy?  Generally, retirement accounts are protected in bankruptcy and you get to keep them in Kansas.

KPERS, Kansas deferred compensation plan, Social Security, federal civil service, 401(k) plans, IRAs, Roth IRAs, 403(b) plans are types of retirement plans that are exempt from the reach of creditors and bankruptcy trustees.

As with all things bankruptcy, the answer to this question actually depends on the facts of your specific circumstances.  [Read more…]

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

Living Expense Allowances on Bankruptcy Means Test Adjust

Posted on March 2, 2009 Written by

The allowable deductions for living expenses on the bankruptcy means test adjust for cases filed on or after March 15, 2009.  You can view the allowances, some of which are national standards and some of which are local standards, on the website for the U.S. Trustee.  See your bankruptcy attorney for application of the allowances to your situation.

Filed Under: Filing Bankruptcy, Means Test

Kansas Median Income Goes Up on Bankruptcy Means Test

Posted on March 2, 2009 Written by

The Kansas median income has increased giving debtors a raise on the bankruptcy means test for cases filed on or after March 15, 2009.  The new figures by family size are:

  • one earner    $41,004
  • two people    $56,146
  • three people $63,245
  • four people   $74,626

* Add $6,900 for each individual in excess of 4.

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

Do I Still Owe Secured Debts (Mortgages, Car Loans) After Bankruptcy?

Posted on February 10, 2009 Written by

Yes and No.  The term “secured debt” applies when you give the lender a mortgage, deed of trust, or lien on property as collateral for a loan.  The most common types of secured debts are home mortgages and car loans.  The treatment of secured debts after bankruptcy can be confusing.

Bankruptcy cancels your personal legal obligation to pay a debt, even a secured debt.  This means the secured creditor can’t sue you after a bankruptcy to collect the money you owe.

But, and this is a big “but,” the creditor can still take back their collateral if you don’t pay the debt.  For example, if you are behind on a car loan or home mortgage, [Read more…]

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

Which Debts Do I Still Owe After Bankruptcy?

Posted on February 9, 2009 Written by

When your bankruptcy is completed, many of your debts are “discharged.”  This means they are canceled and you are no longer legally obligated to pay them.

However, certain types of debts are NOT discharged in bankruptcy.  The following debts are among the debts that generally may not be canceled by bankruptcy:

* Alimony, maintenance, or support for a spouse or children.

* Student loans.  Almost no student loans are canceled by bankruptcy.  But [Read more…]

Filed Under: Discharge, Filing Bankruptcy

I Want to File a Medical Bankruptcy

Posted on February 8, 2009 Written by

The high cost of health care is one of three primary causes of individual bankruptcy.  Frequently, people are left with unaffordable medical bills even if they have health insurance.  We get lots of inquiries about  “medical bankruptcy“.  But you can file bankruptcy just for medical debt.

There really is no such thing as a “medical bankruptcy“.  People think there is because they want to get rid of their medical debts in bankruptcy, yet keep their house and car payments.  This is a misunderstanding.

Most consumer bankruptcies discharge all unsecured debt such as medical bills and credit cards so it may seem like a medical bankruptcy.  But, all creditors must be listed as creditors on the bankruptcy paperwork and notified of the bankruptcy filing.  The house and car lender must know about the bankruptcy and those loans must be paid to keep the house and car.

Filed Under: Discharge, Filing Bankruptcy

Can I Keep One Credit Card Out of My Bankruptcy?

Posted on February 8, 2009 Written by

Clients sometimes ask me if they can keep just one credit card out of the bankruptcy?  They want to omit it from the bankruptcy paperwork and keep paying the credit card payments after the bankruptcy filing so they can have one credit line.  Usually, this request is prompted by the fear of not having credit after the bankruptcy filing for emergencies.

Omitting a credit card account from the bankruptcy schedules generally BACKFIRES.  Most of the credit card lenders will FIND OUT out about the bankruptcy, even if the account is not listed, and CANCEL the credit line.  Lenders subscribe to electronic services such as Banko to tell them about all bankruptcies filed every day.

Many credit cards such as JC Penney and Dillards are actually the same creditor and notice to one account at GE Money Bank will result in cancellation of all accounts through that bank.  Often lenders run your name through the credit reporting agencies on a periodic basis.  The lender will FIND OUT, it is just a matter of when.

Once the lender finds out about your bankruptcy, the credit card account will be canceled, any post-bankruptcy payments will be forfeited, your account will be sent to collection for any post-bankruptcy charges and you will have negative post-bankruptcy credit history.

Omitting creditors from your bankruptcy schedules is wrong.  Intentially leaving off creditors in your bankruptcy case is fraud and a federal crime.  The discharge of debts is a reward for honest debtors who make full disclosure of their finances.  In addition to risking prosecution for perjury, you could be denied your discharge.

Can I list the credit card and keep it by reaffirming?  Generally, no.  Most creditors will not agree to a reaffirmation of unsecured debts and most bankruptcy judges will not approve such reaffirmations.  Your attorney is not likely to be willing to sign a required affidavit that reaffirmation of credit card debt is in your best interest.

Filed Under: Bad Outcomes, Fraud, Crimes, Discharge, Filing Bankruptcy Tagged: , , , , , ,

How Long Will Bankruptcy Stay on My Credit Report?

Posted on February 8, 2009 Written by

The results of your bankruptcy case will be part of your credit record for ten (10) years.  The ten years are counted from the date you filed your bankruptcy.

This does not mean you can’t get a house, a car, a loan, or a credit card for ten years.  In fact, you can probably get credit even before your bankruptcy is over!  The question is, how much interest and fees will you have to pay?  And, can you afford your monthly payments, so you don’t begin a new cycle of painful financial problems.

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 to get credit.  You should check your credit report after your bankruptcy discharge and file a dispute with the credit reporting agency if this information is not correct.

Source: Your Legal Rights During and After Bankruptcy:  Making the Most of Your Bankruptcy Discharge Pamphlet, National Consumer Law Center, Boston, MA, www.nclc.org.

Filed Under: Discharge, Filing Bankruptcy

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
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