Bankruptcy Articles - Various Subjects

[LadynRed]

This is a consolidation of other threads, subjects vary.

The Dangers of Filing Bankruptcy Pro Se (without a lawyer)

http://marketplacemoney.publicradio....al_bankruptcy/

[LadynRed]

From Bill McCleod's Law Blog:
http://mcleodlawoffices.com/blog/200..._mistakes.html

Quote:
Top Five Avoidable Bankruptcy Mistakes

August 08, 2006

August tends to be pretty quiet. Some people are at the beach. Others are getting the kids ready to head back to school. And others, like yours truly, are meeting with clients.

Often when I meet with people for the first time, I learn that they have done everything they can to avoid meeting with me. Sure, I am told by colleagues and clients alike that I am funny, affable and an otherwise nice guy. But if my clients had a choice between seeing me – Mr. Funny Affable Nice Bankruptcy Attorney (or Mr. FANBA) - and getting a skin biopsy with less than minimal anesthetic, they’d opt for the dermatologist and would even ask for an expedited appointment.

The debt stuff can stink. It can feel overwhelming. It can eat away at you and keep you up at night. Then, with debt collectors calling, and the constant “if only I had done something differently…” thing that runs through almost everyone’s head, it only makes a painful skin biopsy seem like a day at the beach. The problem is that some people wait so long that they do things that are not particularly helpful to themselves. In some cases they even make my job more difficult. Here are my top five avoidable mistakes:


1. Refinance and roll credit card debt into one home equity loan payment. Mortgage brokers will tell you you’re saving money. Here are the facts: the real estate market is heading south. The economy is as stable as a pipeline in Alaska, and the future is far from predictable. It’s an election year. Some one is likely to claim the economy is just fine. Don’t believe it. And do not compromise the equity in your home to pay unsecured debt (such as credit cards and lines of credit) that you're now having a tough time paying (or expect to have a tough time paying in the future).

2. Shop. While an extreme example, folks who take the family to Florida the weekend before meeting with me courtesy of the good people at American Express don’t usually end up being my clients. And if they end up someone else’s, they end up in trouble. Interest rates and late fees will push you deeper in debt. Don’t make the situation worse by using credit cards for items you know you cannot afford and you know (or expect) you’ll never pay back, especially if you’re contemplating bankruptcy.

3. Clean out retirement accounts to pay off debt. In most cases, people with retirement accounts will not lose them in bankruptcy – although individual circumstances may vary. As everyone with a retirement account knows, if you take a disbursement you’ll get hit with taxes and penalties. If the disbursement is not enough to pay off the debt, you’ll be stuck with taxes, penalties and debt. Before you explore whether this is a good idea, run some numbers. Can you afford the taxes? If you cannot afford the taxes and pay off your other debt, leave your retirement account alone. Depending on the circumstances, you will not be able to include these taxes in your bankruptcy discharge.

4. Borrow money from a friend or family member. Actually, this is not a bad idea if (a) it’s enough to pay all of your debt in full; (b) your relative or friend is offering better rates and affordable payment terms than your credit card companies…or the local loan shark (I sometimes confuse the two); and (c) you cut up your credit cards and take an oath to never use credit cards while you’re paying your other debt off. Unfortunately, I meet with folks who owe money to Chase, Amex, Sears and their friends and family. Then I hear “but we’ll keep my family’s loan out of the bankruptcy.” No-can-do. All debt is included and listed. With that said: Think before you borrow. It’s one thing if American Express doesn’t want to speak with you. The holidays might not be as pleasant however if your father-in-law doesn’t want to speak to you.

5. Hide or transfer property. Don’t. Enough said there.
There are many rules in bankruptcy, but if you strictly adhere to these five before you even make that appointment to see a bankruptcy attorney, the process will be a lot less complicated and stressful. More than likely, it will be less expensive too.


__________________

[LadynRed]

Great info from a GA Bankruptcy attorney:
http://kennethbrock.blogspot.com/200...-attorney.html

[LadynRed]

Statement of Intent under new law or "who gets the car
Time, time, time.. may NOT be on your side if you have a car loan (Purchase Money Security Interest - PMSI). You could lose your car !! Article from ABI World.

http://abiworld.net/newsletter/consu...3num3/car.html

[LadynRed]

Arizona Bankruptcy Court - "Ride Through" Still Available For Secured Debts After Failure Of Timely Filed Reaffirmation Agreement

In re Moustafi (click for opinion), Ch. 7 Case No. 4-07-00407-EWH, 2007 Bankr. LEXIS 1925 (Bankr. D. Ariz. June 4, 2007. The Chapter 7 debtor stated her intention to reaffirm the debt secured by her vehicle. She timely executed the reaffirmation agreement pursuant to §521, and it was accepted by the lender. However, the court found that debtor's income could not support the payments and declined to approve the reaffirmation. The question thus arose as to whether the lender could repossess the vehicle.

Read the rest here:
http://www.georgiabankruptcyblog.com...agreement.html

[direred]

Oooh, that's a loophole:

"Section 521(a)(6)(A) requires that a debtor enter into a reaffirmation agreement -- not that the reaffirmation agreement be approved by the court."

[LadynRed]

Good article about the kinds of potential problems with a bK case - when you don't tell your lawyer EVERYTHING !!

Words and Phrases Lawyers Never Like to Hear from Their Clients

At the same time I recognize that bankruptcy debtors sometimes get themselves in trouble when they fail to disclose information to me that doesn’t seem particularly important, but, in reality is very important. If you are getting ready to file, or if your case is still active, here is a brief checklist of potential problem areas:

Read the rest...
http://www.bankruptcylawnetwork.com/...their-clients/

[fred333]

That was a very good article.

[LadynRed]

Thinking of filing for bankruptcy ?? STAY AWAY FROM THE SHREDDER !!
This guy was denied a discharge because he destroyed documents !

http://mcleodlawoffices.com/2008/01/...documents.html

[LadynRed]

33 Don'ts For Preparing To File Bankruptcy - from Bankruptcy Law Network

http://www.bankruptcylawnetwork.com/...ruptcy-part-1/
http://www.bankruptcylawnetwork.com/...ruptcy-part-2/

[bingo]

Another case involving ride-throughs.


Limited "Ride Through" Option Remains Post-BAPCPA
A federal district court in North Carolina has held that a limited "ride through" option remained in effect even after enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) to permit pro se Chapter 7 debtors who had done everything they could to reaffirm their $20,000-plus debt on a motor vehicle by filing a timely statement of intent and actually entering into a reaffirmation agreement, but whose reaffirmation agreement had not been approved by the bankruptcy court, to remain in possession of the motor vehicle while continuing to make their regular monthly payments to the motor vehicle lender. The automatic stay remained in effect with respect to the motor vehicle, the vehicle remained part of the bankruptcy estate, and the debtors were not in default on the car loan, despite the presence of an "ipso facto" clause in their loan agreement with the motor vehicle lender. The court rejected the lender's arguments that BAPCPA's plain meaning led to absurd results and that the bankruptcy court's analysis contravened clearly expressed congressional intent in BAPCPA's legislative history. Coastal Federal Credit Union v. Hardiman, 2008 WL 4899529 (E.D.N.C.).

[LadynRed]

Seventh Circuit limits Illinois Homestead Exemption

By David Leibowitz on Jan 3, 2009 in Bankruptcy Cases & Legislation, Exemption Issues, Illinois, Marriage and Debt
The US Court of Appeals for the Seventh Circuit has just decided that Illinois residents cannot claim a homestead exemption on a house in which they live unless they have some record title interest in the property. In re Belcher, (7th Cir. 07- 2174, December 31, 2008). Often, one spouse may hold title to a house while the other spouse has lived there for some time, secure in the knowledge that he or she has a marital interest in the house in the event of divorce or the expectation of inheriting the house in the event of death. Unfortunately, in the event that the couple is forced to seek bankruptcy relief, these potential interests in the house don’t rise to the level of homestead exemption protection.
In Illinois, a homestead exemption is available in the amount of $15,000 up to a limit of $30,000 per household. However, the homestead exemption has been construed to require more than simply being in possession of the house. One actually must have some ownership interest in the house to qualify.
Much more effective than the homestead exemption for Illinois residents is the concept of tenancy by the entireties. This device allows a husband and wife to own a parcel of real estate together in such a way that the real estate can be sold only to satisfy the debts for which the husband and wife are both jointly liable.
These days, many people find that they don’t have equity in a house at all - so homestead exemptions don’t seem so important. However, the time to think about these protective rights is before you need them, not when it is too late.
So, married couples in Illinois should consider taking advantage of holding title to real estate in tenancy by the entireties. They also should know that holding title in the name of only one spouse will result in loss of both the tenancy by the entireties exemption but also loss of an additional $15,000 homestead exemption in the event of bankruptcy.

[LadynRed]

Minnesota decision:

http://www.bankruptcylawnetwork.com/...ship-analysis/

A Minnesota bankruptcy court recently held that the income of a non-debtor wife should not be considered to increase the income of a chapter 7 debtor, for purposes of considering whether the husband’s student loans should be discharged as constituting an “undue hardship.” The court held that while the wife’s income could be considered to the extent that her income reduced the husband’s living expenses, her income should not be automatically added to the husband’s income, in evaluating his monthly income and expenses.

[bingo]

Originally Posted by LadynRed

Arizona Bankruptcy Court - "Ride Through" Still Available For Secured Debts After Failure Of Timely Filed Reaffirmation Agreement


[URL="http://www.georgiabankruptcyblog.com/moustafi.pdf"]

Read the rest here:
http://www.georgiabankruptcyblog.com...agreement.html

Another court reaches the same conclusion.

Fourth Option" Available After Reaffirmation Denial
The so-called "fourth option," under which a debtor may retain collateral securing a creditor's claim without redeeming it and without reaffirming the underlying debt, simply by continuing to make his regular monthly payments thereon, was not eliminated by amendments that were enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Accordingly, it could be utilized by Chapter 7 debtors who attempted to reaffirm their debt, but whose reaffirmation agreement was not approved by the court, based on their failure to rebut the presumption of "undue hardship" arising from a roughly $3,000.00 shortfall in their monthly income. In re Hart, 2009 WL 605739 (Bkrtcy.D.Del., Judge Sontchi).

[bingo]

California Homestead Amounts To Increase
By Douglas Jacobs, California Bankruptcy Attorney on Oct 20, 2009 in Exemptions In Bankruptcy, Featured

California Homestead Amounts To IncreaseGovernor Schwarzenegger signed into law new legislation that raises the amounts that can be claimed as a homestead in California. The law, Assembly Bill 1046 is one of several new pieces of California legislation aimed at protecting homeowners.Previously, the equity in your home was exempt from execution or in a bankruptcy filing up to $50,000 for an individual; $75,000 for a married couple (or head of household) and $150,000 for a disabled person or someone 65 or older, or 55 or older with limited income. But, as of January 1, 2010, these limits will go up by $25,000 each; to $75,000, $100,000 and $175,000 respectively.Note that under current Bankruptcy law, there may be limitations on the amounts listed above if you recently moved to California and purchased your home.Although this increase will go into effect on January 1, 2010, further changes to exemption amounts will go into effect on April 1, 2010.Governor Schwarzenegger signed into law new legislation that raises the amounts that can be claimed as a homestead in California. The law, Assembly Bill 1046 is one of several new pieces of California legislation aimed at protecting homeowners.

Previously, the equity in your home was exempt from execution or in a bankruptcy filing up to $50,000 for an individual; $75,000 for a married couple (or head of household) and $150,000 for a disabled person or someone 65 or older, or 55 or older with limited income. But, as of January 1, 2010, these limits will go up by $25,000 each; to $75,000, $100,000 and $175,000 respectively.

Note that under current Bankruptcy law, there may be limitations on the amounts listed above if you recently moved to California and purchased your home. Additionally, as my friend and colleague, Susanne Robicsek explained, ,just because you have exempt equity in your home, doesn’t guarantee you can keep it in bankruptcy, especially if you aren’t making your payments.

Although this increase will go into effect on January 1, 2010, further changes to exemption amounts will go into effect on April 1, 2010 as they did in 2007.

[gturnwald]

You can ask the service of http://www.bankruptcylansing.com an expert in Bankruptcy.

[dreaclark97]

I am recently file Chapte 7 but had a settlement coming from a prior accident. I notified the trustee and then a notice of the asset was sent out to my creditors. On the last allowable day one of my creditors filed a notice of entry of appearance and request for notice puruant bankruptcy rule 2002.
My settlement was suppose to be approved on December 10th does this filing hurt me? what does it mean?

[Jaknik]

Been reading a bunch about "getting a lawyer for bankruptycy", and, in general, I could not disagree more. No, a lawyer is NOT necessary, or even desirable. How do I know? Been there, done that. How do I know? Two people I know filed pro se, one of them 75 years old. No problems. None. Zilch.

Fact: The overwhelming number of BKs are granted, as high as 98% plus.

What I read and hear seems to be "scare tactics", mostly, so that lawyers have this rather facile addition to their incomes. The classes required? They can be taken easily online. The forms? Either a person can obtain them free from the Federal Courts' websites; or, if so inclined, purchase a form packet at a office supply store, with instructions included. And there are websites who will fill out the forms for about 499.00 or so. Still too much, but far better than an attorney's ridiculous fees for filling in the blanks with the information you supply him or her.

Often, an attorney's selling point is that he or she will "represent" you in the creditor's meeting, a meeting that takes less than ten minutes, and rarely if ever, has a creditor present. And often, the attorney showing up, sitting gallanty at the side of the debtor, will have been one "sent from the office", one who may not have even met the debtor, previously.
-------------------
Bottom line: Homework. Don't be intimidated. One step at a time. Save your money by going pro se.

[bkbankruptcy]

Really a good start..

[jacob]

I am really impressed that there so much about Bankruptcy to learn. To be very frank many things were not clear to me earlier. Really great stuff !