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Unemployed Workers Over Age 50 Should Give Bankruptcy a Look

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The New York Times recently published a somewhat discouraging article about the difficulty older workers are having finding jobs following the “Great Recession.”  According to the article, it takes workers over 50 almost a full year to find a new job, compared to about 20 weeks for 16 to 24 year olds.

Further, less than half of laid off workers between the ages of 55 and 64 are finding jobs at all, and less than 25% of workers over the age of 65 are finding work.

Those workers who do find jobs often do so for less money and a recent Supreme Court decision [The Supreme Court ruled in 2009 that the Title VII framework does not carry over to age-bias lawsuits.  This case was Gross v. FBL Financial Services, Inc. – you can read more about it here.] which makes it more difficult for an older plaintiff to recover damages for age discrimination.

You may be asking “what do these statistics have to do with filing bankruptcy?” [Read more…] about Unemployed Workers Over Age 50 Should Give Bankruptcy a Look

Unusual Asset Arises in Casey Anthony Bankruptcy Case

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Back in 2011, the nation was fixated on the trial of Casey Anthony, the Florida woman who was accused of killing her daughter.  Ms. Anthony was, of course, acquitted of murder but her problems did not end there.

Earlier this year, Ms. Anthony filed Chapter 7 bankruptcy, claiming that she owed over $800,000 to around 80 creditors and that she has no income.  Among the creditors are her defense attorney – to whom she owes $500,000, and a defamation suit of an unknown amount filed by a former babysitter 1

No doubt Ms. Anthony’s bankruptcy case will continue for months and months as she is likely to face litigation in the form of challenges to dischargeability from creditors.  However, one issue has been resolved that is somewhat unusual for a bankruptcy case. [Read more…] about Unusual Asset Arises in Casey Anthony Bankruptcy Case

  1. A Chapter 7 debtor can and should include all creditors and potential creditors even if the exact amount of the debt is unknown or not yet determined.  If the Chapter 7 discharge goes through the pending claims will be extinguished. ↩

Co-Signed Loans: An Old Problem that is Making a Comeback

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When I first began working in the consumer bankruptcy field, co-signed loans were a common problem that I saw often.  Then credit standards loosened and I rarely saw clients who were co-signers or who had co-signed loans.

Now the personally guaranteed co-signed loan is making a comeback.   I can state without reservation that in both a personal and a business context, agreeing to co-sign a loan for someone with poor credit is never a good idea.

In the current market, standards for consumer credit are tight and securing credit approval can be a challenging feat for someone with mediocre or poor credit.   Because of the tightening credit market and increased regulation by the federal government on lenders, people who may have been approved in years past are now needing others to co-sign in order to take out a loan. [Read more…] about Co-Signed Loans: An Old Problem that is Making a Comeback

Objection to Chapter 13 Confirmation or Motion to Dismiss? Now the Hard Work Starts

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Last week, I was reminded about the importance of taking care of Chapter 13 business early.  I got stuck in court for 4 hours waiting to have a 45 second conversation with the Chapter 13 trustee.

My case involved a trustee motion to dismiss.  My client had filed Chapter 13 about 2 years ago and earlier this year he lost his job and thus fell behind on his trustee payments.  The trustee filed a motion to dismiss, with a hearing scheduled for mid-May.  A couple of days before the hearing my client called to say that he had landed a new job and could I buy him some time.  I called and emailed the trustee and she agreed to reset the motion to dismiss hearing to last week’s calendar.

I notified my client of the reset and asked him for detailed information about his new job including a salary breakdown.  He provided me most of what I needed but did not yet have an actual paycheck.  He also sent the trustee 3 of the 5 missing payments.  Finally, the weekend before the hearing I decided to file my amended budget with an estimated budget.

On the Monday before the Wednesday hearing I started calling and emailing the trustee.  No response.  I checked the trustee’s web site – my client’s personal check had not yet posted (although he did have a registered mail receipt signed by someone in the trustee’s office).  The day before the hearing I emailed and called.  No response.

Having no other choice, I trekked down to court only to discover that the judge’s hearing calendar was 15o pages with hundreds and hundreds of cases.  It took 3 1/2 hours to read the calendar.  After the call of the calendar I was able to talk to the trustee and she agreed to a consent order assuming the funds posted within 10 days – a 45 second conversation.

What could my client and I have done differently?

  1. I should have insisted on a paycheck breakdown 10 days earlier, even if we were working with estimates.  My client wanted to be accurate but in this case timeliness was more important.
  2. My client should have brought the trustee certified funds by personal delivery and obtained a receipt for same.  This should have been done at least 7 days prior to the hearing.

The good news here is that we saved his case.  This is especially important because I had filed a lien strip early on in the case and eliminated a $30,000+ second mortgage.  If the case had been dismissed that 2nd mortgage would have reattached to my client’s house.

Sinbad Bankruptcy? News Reports Get it Wrong

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According to news reports coming from literally hundreds of outlets, comedian Sinbad has filed a Chapter 13 bankruptcy.  The source of this report is the web site TMZ.com – and news outlets from major news networks to gossip web sites are re-writing and re-reporting the TMZ story.

There’s only one problem with the TMZ story – it is not factually correct.  There is no way that Sinbad could qualify for Chapter 13 given the type of debts he owes.

If, as has been reported, Sinbad owes American Express $374,979 and Bank of America, $32,199, his unsecured debt exceeds the jurisdictional limits for Chapter 13.  If you consider IRS debt of more than $8 million, Sinbad far exceeds the jurisdictional limits for Chapter 13.1

I am guessing that Sinbad actually filed Chapter 7, which means that any hard assets or intellectual property he owns could be at risk.  This element of the story could be an interesting read but we may never know. [Read more…] about Sinbad Bankruptcy? News Reports Get it Wrong

  1. Section 109(e) of the Bankruptcy Code provides that Chapter 13 debtors may have no more than $383,175 of unsecured debts.  Sinbad’s credit card debt alone totals more than $407,000. ↩

Your Decision to File Bankruptcy Should Reflect Business Considerations Only

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bankruptcy filing considerationsJust over three years ago, I received a phone call from an old acquaintance who seemed extremely stressed out.   This gentleman had previously been in sales and I had done business with him over 20 years ago.   During our dealings we had discovered that we shared several mutual friends and over the years I had run into him several times on social occasions.

Now, he needed advice about some significant debt problems.  His small business was failing and he owed tens of thousands of dollars to multiple creditors.   After reviewing his paperwork I suggested that Chapter 7 would work and should be considered.   My friend agreed but did not want to file because he felt very guilty about not paying back his debts.

For the next two and a half years, I would talk to my old friend on the phone about his debt problems.   He was sued by several creditors but because he was unemployed there were no wages to garnish.   He had no bank account so the judgments just sat there waiting for his financial situation to improve. [Read more…] about Your Decision to File Bankruptcy Should Reflect Business Considerations Only

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