Atlanta Bankruptcy Attorneys
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By Jonathan on
I often get questions about creditor collection practices. Can I be sued for an old debt? Did the bill collector do something illegal? What is the significance of a "charge off?"
California lawyer Jonathan Stein has gathered many of these questions together and has answered them quickly and eloquently. Here is a link to the FDCPA section of his new blog – the California Debt blog.
[tags] FDCPA, collection practices, Jonathan Stein, old debt and lawsuits [/tags]
By Jonathan on
A Chapter 13 client contacted me this morning with a somewhat unusual situation. She called because she has been in her Chapter 13 case for almost exactly three years and she wanted to pay off her case and get out of bankruptcy.
I looked at the claims file and at her account on the trustee’ s web site and calculated that she would need between $5,000 and $10,000 as of her three year anniversary to pay off her case (the usability of the trustee’s web site merits a post of its own, but my best guess in this case was between $5k and $10k).
I asked where the money would come from and she advised me that her mortgage company would lend it to her based on a fairly significant increase in the value of her property during the three years since she had filed. I should also point out that at the time we filed, there did not appear to be any equity at all and our confirmed Chapter 13 plan called for a 2 pennies on the dollar divided to unsecured creditors.
The question I had – if I contacted the trustee for a payoff at 36 months, how would the trustee treat the increased value in the property? Would the trustee simply accept the cash and issue a discharge that paid unsecured creditors 2%? Or would the trustee take the position that the increased equity belongs to the estate and ask that some or all of the cash proceeds from a refinance be paid to the trustee?
For my analysis, click [Read more…] about Does Chapter 13 Debtor Get to Keep Sale Proceeds if Fair Market Value of Home Goes Up During Chapter 13?
By Jonathan on
My colleague, attorney Chip Parker from Jacksonville, has written a timely post in the BankruptcyLawNetwork blog about how to save your income tax refund if you are thinking about filing for bankruptcy. Chip suggests that you file your tax returns sooner rather than later, then spend your refund on ordinary and necessary expenses. You would have to reveal receipt of the income tax refund on your bankruptcy schedules, but you would have the benefit of the money and the odds are very small that your bankruptcy trustee would challenge your use of this money.
Chip’s advice falls into the general category of “pre-bankruptcy planning.” Under the current bankruptcy law, pre-bankruptcy planning has become increasingly important. Now, more than ever before, the bankruptcy laws empower trustees and creditors to try to squeeze whatever they can from debtors. All the paperwork your file will be scrutinized. “Good faith” and “best efforts” have been replaced by demands for documents, proof of income and expenses, and tax returns.
In some cases, the means test will show “disposable income” when in real life, there is nothing there. In this unfriendly environment, you, as the debtor, need to look for every opportunity to protect and preserve your assets and cash flow. Do not assume that the bankruptcy system will give you any breaks.
I know I sound like a broken record, but START EARLY. Don’t wait until the lawsuits are filed or the repo man in circling before talking to a lawyer. If I could send one message out to people in even mild financial distress, it would be to find a bankruptcy attorney long before you are facing any sort of emergency. In January alone, I met with over ten potential debtors who could file now, but who will have a much better result if they wait for two or three months. Sometimes, the goal is to create a paper trail of payments to creditors to show good faith, and sometimes the goal is to water down the effect of a one-time bonus for median income purposes.
There are enough pressures on bankruptcy debtors under the new law. Find a lawyer who will act aggressively on your behalf and fight back!
[tags] income tax refund and bankruptcy, Chip Parker, Bankruptcy Law Network, pre-bankruptcy planning [/tags]
By Jonathan on
Although bankruptcy filing numbers are still down in Atlanta, I am starting to see more and more activity on my web site and in email inquiries from potential clients. Nevertheless, there is still a great deal of misinformation in the general public about bankruptcy.
Yesterday, I was speaking to a potential Social Security disability client who was telling me about the debt she had incurred after she stopped working. When I suggested that bankruptcy might be an option, she responded with the statement “I thought that they changed the bankruptcy law and made it illegal to file.”
My colleague, Maryland bankruptcy attorney Brett Weiss, has written an excellent article for his firm’s web site entitled “Top 15 Myths About The New Bankruptcy Law,” which you can read by clicking the link. In this article, Brett sets the record straight about all the false rumors about bankruptcy.
Now that we have a new Congress, it will be interesting to see if there are any efforts to modify some of the sillier provisions of the new law (such as credit counseling or the debt relief agency disclosure requirements). My experience over the past twenty years has been that very, very few bankruptcy debtors use the bankruptcy process to manipulate the system.
Hopefully as the myths about bankruptcy are dispelled over time, those “honest but unfortunate” debtors who truly need a fresh start will again realize that bankruptcy relief still exists.
By Jonathan on
This past week the U.S. Supreme Court heard oral argument on an interesting Fair Credit Reporting Act issue. In the case of Geico vs. Edo, the Supreme Court will be deciding whether insurance companies can be liable for punitive damages if they fail to notify customers that the customer’s credit score has led to higher rates.
Regardless of what the Supreme Court does, I think that the bigger issue for consumers relates to how insurance companies use your credit history in setting the price that a consumer pays for auto or homeowner’s insurance.
According to the AJC, drivers with the worst credit histories will pay almost double the price paid by a driver with very good credit. However, Georgia law permits the insurance companies to keep secret the formulas they use to decide what credit factors impact insurance premiums.
All of this begs the question of what relevance bad credit has on a driver’s likelihood to be involved in an accident.
If you thought that a bad credit score only affected your ability to finance a house or a car, think again. Even if you are not using credit, your cost of insurance will be affected by a bad credit history.
This credit score/insurance cost link serves as yet another reason for you to check your credit reports at least once a year. Since most credit reports have some errors, there is a good chance that you can improve your score simply by challenging these errors and demanding that the credit reporting agency remove the mistakes from your report.
By Jonathan on
A divorce lawyer called me today with a question about the impact of bankruptcy on a debtor’s obligations under a divorce decree. The divorce lawyer represented a man who was the co-signer of a credit card along with his ex-wife. The divorce decree provided that the ex-wife would be responsible for payment of this credit card debt.
In December, 2006, the wife filed a Chapter 7 bankruptcy and included the credit card debt in her petition. She did not list the ex-husband as a creditor in the case and the ex-husband did not receive official notice of the filing. The husband’s divorce lawyer wanted to know what, if anything, could the ex-husband do to protect his interests.
I responded by noting that Bankruptcy Code Sections 523(a)(5) and (a)(15) apply here. 523(a)(5) makes debts in the nature of alimony and support non-dischargeable where as (a)(15) provides that debts to a former spouse not in the nature of alimony or support but incurred by the debtor in connection with a divorce decree are not dischargeable.
Therefore, in my view, the ex-husband is a creditor by virtue of financial liability that he would incur if the debtor fails to pay the credit card debt.
I further advised my attorney colleague that she should contact the debtor’s lawyer and inquire as to whether the debtor would consent to an Order holding the obligation to the ex-spouse as non-dischargeable in the Chapter 7. Arguably, 523(a)(15) and 727(b) make these debts non-dischargeable automatically, but I would feel safer with an Order from the bankruptcy judge formally holding that these debts are not discharged in bankruptcy.
I also ran this scenario by my colleague Shayna Steinfeld, a lawyer who practices in the area of bankruptcy and domestic relations law and she concurred with my analysis and added two additional points:
1) that this property division debt would be dischargeable in a Chapter 13 (pursuant to Section 1328(a)(2); and
2) that the automatic stay of Code Section 362 may not apply (per Section 362(b) if the credit card obligation was in the nature of alimony or support.
The bottom line – the debtor wife is not going to be able to stick her ex-husband with this credit card debt, although the ex-husband may need to protect his rights by filing an appropriate pleading in the bankruptcy court. The wording of the divorce decree here is also critical in determining how this credit card obligation will be treated.
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