phone sacramento bankruptcy help text sacramento bankruptcy help email1

Law Office of James Keenan

Help when you need it

Personal service since 1995

Sacramento Bankruptcy & Debt Relief Attorney

Get news, tips and information about bankruptcy filing and debt relief/elimination in Sacramento

Debt Elimination Through Bankruptcy

Debt Elimination Through Bankruptcy

Why file for bankruptcy? Debt elimination though bankruptcy is the purpose for filing bankruptcy. It is also the basis of the bankruptcy discharge. A bankruptcy discharge is a court order canceling, or eliminating your debts. It’s that simple. The order is issued by the United States Bankruptcy Court.

The U.S. Bankruptcy Court is a branch within the federal court system. See here for yourself. Federal courts typically have one court per state. Some, though, like California, have more. California is divided into four federal court districts. The region encompassing Sacramento and its vicinity is the Eastern District of California. Here is a link to the bankruptcy court in Sacramento. Its official name is the United States Bankruptcy Court, Eastern District of California. Debt elimination through bankruptcy is the reason for this court system.

Consumers considering bankruptcy do so due to debt they cannot afford to repay. Debt elimination trough bankruptcy provides the necessary relief some consumers need. Bankruptcy does not allow the elimination of all debts. Some debt, like federally guaranteed student loans, past-due sales tax and damages done due to crimes cannot be discharged. This means that even if you file for bankruptcy you cannot eliminate these debts.

Though debt elimination through bankruptcy is why many people file for bankruptcy, the entire elimination of debt is not always possible. In addition to certain debts that can’t be discharged, there are income limitations. The less you make, the less debt you may have to repay. The more you make, the more you may have to repay. Most people filing Chapter 7 bankruptcy, the most common form of consumer bankruptcy filing, do not have to repay any of their debts. Those who can afford to repay at least a portion of their debts usually file Chapter 13 bankruptcy.

Whatever form of bankruptcy filing you choose, know that debt elimination through bankruptcy is the reason you are filing. Consumer debt is on the rise as this Consumer Reports article points out. And if you can’t afford to repay your debt, bankruptcy is the only option to eliminate it.

  1533 Hits

Bankruptcy Debt Relief

Bankruptcy Debt Relief

Bankruptcy debt relief is the purpose of filing for bankruptcy. There are many means of seeking debt relief through a bankruptcy filing. The two most common forms of consumer bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Both provide debt relief. Chapter 7 bankruptcy allows consumers to liquidate, or eliminate, their debt. Chapter 13 bankruptcy provides for the reorganization and/or elimination of debt. There are benefits to both these forms of bankruptcy. Each consumer situation and financial fix through bankruptcy is different.

Knowing that bankruptcy debt relief is a potential for individuals and families fighting debt is a benefit on its own. Consumers unable to afford their debt are, obviously, in need of debt relief. Whether that debt relief is through filing bankruptcy or some other form of debt relief is often the biggest decision for consumers in debt. Whatever the financial solution, debt relief is the objective.

Bankruptcy debt relief is typically the most conservative and comprehensive solution to consumer debt debt. The basics of how bankruptcy works are simple. If you have more debt than income to repay it, filing bankruptcy allows you to be relieved of your debt. If you an afford to repay some of your debt, Chapter 13 bankruptcy may be your best bet to eliminate the debt you cannot afford. Chapter 13 bankruptcy can also allow you to reorganize your debt. Reorganizing your debt through Chapter 13 can give you more time to repay your debts, get caught up on secured debts (mortgages and cars) and get rid of what debt you can’t afford. Chapter 7 bankruptcy law permits you to eliminate all your debt.

Whatever the financial fix needed, whether though bankruptcy debt relief or some other method, caution is the key. Make sure your debt relief option is best for your personal financial need. Bankruptcy is applying federal law to deal with your debts. It is conservative and certain.

Other financial options besides bankruptcy debt relief might not be as certain. Debt consolidation or relief agencies often add to your debt more than they relieve it. Credit consolidators or debt settlement agencies are often owned by creditors seeking to steer you away from bankruptcy. Some even are scams. Buyer beware, as this recent news story points out.

Continue reading
  1586 Hits

Keep your home in bankruptcy

Keep your home in bankruptcy

Can you keep your home in bankruptcy? It is a common question posed by potential bankruptcy clients. And the common answer to this question is yes. You can keep your home in bankruptcy.

Bankruptcy laws allow you to protect, or exempt, your property when you file for bankruptcy. You do not have to lose or surrender your possessions in seeking bankruptcy protection from your creditors. This means you can keep your home in bankruptcy and still eliminate your debt. There are limits, though.

To keep your home in bankruptcy there are limitations on the amount of equity you can protect. Depending on your individual bankruptcy situation sought, there are limits on the amount of equity you can have. Typically, you can keep more equity in your home if you are married, are older or even if your income is lower. So, too, the more you own in other forms of property can lessen the amount of equity allowed. cars, cash, and bank accounts are examples of property that may limit the amount of equity to keep your home in bankruptcy. Each individual bankruptcy case is different.

If you can protect, or exempt, all the equity in your house, you can still file bankruptcy and eliminate all your debt. This is often the case in a Chapter 7 bankruptcy. If filers can protect all the equity in their home, they can often eliminate all their debt through a Chapter 7 bankruptcy.

Even if you have more equity in your home than the law allows you to protect, you can still keep your home in bankruptcy if you repay some of your debt. This is often the case in a Chapter 13 bankruptcy. A Chapter 13 bankruptcy provides for repayment of your debt, even if only a percentage of your debt is repaid. And for each dollar you repay to your creditors, you can keep and extra dollar of equity in your home. If for example, you have $151,000 equity in your residence, but are only allowed to protect $150,000 in equity, you can still keep your home in bankruptcy if you pay $1,000 back to your creditors. It’s that simple.

Continue reading
  1520 Hits

Credit Card Debt Elimination In Bankruptcy

Credit Card Debt Elimination In Bankruptcy

Credit card debt elimination in bankruptcy is one of the most common causes of bankruptcy filing. Consumer debt has increased dramatically in the past few years. The level of credit card debt is now near it‘s pre-recession level. And that’s a lot. This Consumer Reports article describes the recent rise in credit card debt. The article also describes the perils of excess credit card debt. In depicting the problem of too much credit card debt, the article points out what can be done to diminish the hard harm of the excess debt.

Eliminating credit card debt is the ideal solution to excess credit card debt. But that is easier said than done. Trimming expenses, paying your debt down faster and tapping your savings are all options to decrease your debt. These are great ideas. But not if they won’t work for you. Maybe your expenses are already shaved to the bone. Perhaps you can’t pay your debt off any faster. And what if you have no savings? If so, credit card debt elimination in bankruptcy may be your best bet.

Credit card debt elimination in bankruptcy may be your only option if your debt is beyond your ability to repay. And those in that position are not alone. Tips to improve your credit position are meaningless if you can’t employ them. And paying more on your debt often falls on deaf ears of those in debt. The reason people are in debt is often because they can’t repay it. If they could, they would.

The Consumer Reports article is right. Too much credit card debt is bad. But if you can’t repay it, credit card debt elimination in bankruptcy is your only option. And a good option it is. Though filing bankruptcy is a negative on your credit, eliminating your credit card debt you can’t repay is a positive. Weighing these options is the key to evaluating whether filing bankruptcy is the right financial option.

  1638 Hits

Sacramento Bankruptcy: Bankruptcy Myths Exposed

Sacramento Bankruptcy: Bankruptcy Myths Exposed

Over the next few weeks and posts, I will expose some of the major bankruptcy myths out there. The first, and often the most common, is that bankruptcy is a financially irresponsible move. Or that it is financially irresponsible to incur more debt than you can afford to repay. This US News report reflects many of these myths.

The reality is that most debt discharged, or eliminated, through bankruptcy, is tied to medical treatment, bills and living expenses. Rarely are debts discharged through bankruptcy perceived as financially irresponsible. That’s because they’re not. It’s a myth.

The cost of living has increased. And it has increased at a much faster pace than in years past. Just ask a college graduate with student loans, the uninsured ill, or underemployed parents trying to provide. Debt has become a necessity of American life. And that is definitely no myth.

What, then, to do with the debt? The credit card industry has tried to portray and perpetuate the myth that filing bankruptcy on your debt is financially irresponsible. But why? They don’t want there debts discharged is why. Debt you can pay is one thing. Debt you can’t repay is another. Bankruptcy is about what to do with that debt you cannot afford to repay.

And if you cannot repay your debt now, you’ll be even less like to repay it later. Debt grows more commonly than it shrinks if you cannot afford to pay it. Often incurring new debt to repay old debt becomes a way of life. When you run out of Peters to pay Paul, though, something has to give.

Continue reading
  1563 Hits

Trump and Bankruptcy

Trump and Bankruptcy

You are not alone if you are considering filing for bankruptcy. Donald Trump has filed bankruptcy on behalf of his businesses four times. While Donald Trump has never filed for personal bankruptcy, he has sought debt relief for several of his business interests. But, as Trump would tell you, he is wealthy. Very wealthy. Why, then, would his businesses file for bankruptcy? Perhaps the nexus between Trump and bankruptcy is partially accountable for his wealth.

As has been pointed out, Trump’s businesses accumulated too much debt. With more debt than income to afford it, Trump and bankruptcy became a team for these businesses. Though these businesses filed for Chapter 11 Bankruptcy reorganization, the bankruptcy effect was the same as the most common consumer bankruptcies (Chapter 7 and 13) individuals file. Trump filed bankruptcy to limit and eliminate his business debt. His businesses simply couldn’t afford the debt. Bankruptcy law allowed the debt to be eliminated, lessened or refinanced through the bankruptcy court. Bankruptcy can do this for business debt. And bankruptcy can do this for personal debt. It is why businesses and individuals file for bankruptcy.

Trump may have earned his fortune through “the art of the deal.” But Trump and bankruptcy teamed when the deal went south. Bankruptcy is a business move. Nobody knows this more than Trump. Considering bankruptcy as nothing more than a financial function for the betterment of his businesses served Trump well. Bankruptcy can provide the same utility to individuals filing for bankruptcy. It’s no mystery or science that debt is as much a burden to individuals as it is to businesses. By the same token, eliminating debt is a benefit to both.

Individuals, unlike businesses, are often wary of filing for bankruptcy. Perhaps there is a stigma or some sense of moral failing associated with filing for personal bankruptcy. But it shouldn’t. Debt is part of personal finance. Dealing with personal debt should be considered no different than dealing with business debt. Trump and bankruptcy teamed to deal with debt for his businesses. Individuals can do the same with bankruptcy to benefit their personal financial picture. It’s that simple.

  1627 Hits

Bankruptcy Means Test Meaning

Bankruptcy Means Test Meaning

What is the bankruptcy means test meaning? What even is the bankruptcy means test? Many considering bankruptcy and other debt relief options want to know. Stated simply, the bankruptcy means test is a financial evaluation of whether you qualify for certain bankruptcy protection. Passing the bankruptcy means test typically qualifies a filer for Chapter 7 bankruptcy. Chapter 7 bankruptcy is a form of bankruptcy filing resulting in the discharge, or elimination, of the filer’s debt. None of the debt normally needs to be repaid in a Chapter 7 bankruptcy.

Qualifying for Chapter 7 bankruptcy requires the filer to pass the bankruptcy means test. This, then, is the primary bankruptcy means test meaning. To “pass” the bankruptcy means test, the filer must demonstrate eligibility to file for Chapter 7 bankruptcy. What this means is that an individual or couple filing for Chapter 7 bankruptcy must prove eligibility for a Chapter 7 filing. To be eligible for filing Chapter 7 bankruptcy, filers must show, essentially, their living expenses exceed their income. Put another way, they owe more in living expenses than income earned. This recent news article clarifies many of the bankruptcy means tests basics.

When bankruptcy filers establish their living expenses exceed their income, Chapter 7 bankruptcy law allows their debts to be forgiven, or eliminated. The bankruptcy means test meaning here is that if an individual cannot afford basic living expenses, debt on top of that is incapable of being repaid. That is the purpose of Chapter 7 bankruptcy, to eliminate debt that cannot be repaid. The bankruptcy means test is the tool to test whether this is true for those filing for Chapter 7 bankruptcy.

Not qualifying for, or passing, the bankruptcy means test does not mean you cannot qualify for bankruptcy protection. But the bankruptcy means test meaning does dictate whether you qualify for Chapter 7 bankruptcy. Not qualifying for Chapter 7 bankruptcy is not necessarily bad. Sometimes other forms of bankruptcy filing, such as Chapter 13, bankruptcy, are a better bet for the filer. Every individual and family are different.

Though the concept is simple, the bankruptcy means test is one of the more complicated areas of bankruptcy law. Tread carefully here! There are numerous nooks, crannies and niches to the nuance of the means test. This is particularly so if your finances are not a natural fit for the means test. Perhaps, then, the best way to understand the bankruptcy means test meaning is to meet with a bankruptcy professional.

  1602 Hits

Payday Loans in Bankruptcy

Payday Loans in Bankruptcy

Payday loans in bankruptcy are a common connection. If you don’t make good on that $300 post-dated check you gave to the local payday loan place for $250 cash, you are in for it financially. Interest rates nearing 500% kick in when your check doesn’t clear. And the amounts you can wind up owing accumulate faster than you can say usury.

Once upon a time usury, or loaning money at unusually high interest rates, was illegal. But no more–at least when in comes to payday loans. The industry carved out an exception to usury, arguing the inflated interest rates were necessary in light of the credit risk. Maybe so, but the amount you can wind up owing from unpaid payday loans can be astronomical.

Google has banned payday loan advertisements altogether. Here’s a story reflecting Google’s rationale. This payday loan philosophy only fuels the flow of payday loans in bankruptcy. Often when payday loans are not repaid in time, other payday loans are taken out to repay the previous ones. Soon this can become a cycle. Eventually options to borrow new money to repay old money run out.

Fortunately, payday loans can be discharged in bankruptcy. This is why payday loans in bankruptcy are such a frequent pair. Particularly problematic for payday loan lenders are the collection practices they face when the debts are not repaid. Some of the most aggressive and improper debt collection strategies and schemes are perpetrated by these lenders. Collection horror stories by the plenty derive from payday loan debts. Threats to arrest, immediate wage garnishment and bank levies are some of the more common collection ruses by the payday loan industry. Granted there are legitimate payday lenders out there. But anyone loaning money at 475% interest can’t be all good.

Whatever the story or scenario that may have led to your payday loan debt, know that bankruptcy offers a fix. Find out your options by scheduling a free consultation by calling me at (916) 448-6923.

  1668 Hits

Trump’s Take on Debt and Bankruptcy

Trump’s Take on Debt and Bankruptcy

Donald Trump’s take on debt and bankruptcy is pragmatic. Limit debt accumulation but, if you can’t, consider bankruptcy to eliminate it. This New York Post article reflects the Republican’s debt philosophy.

Bankruptcy is a tool according to Trump. He’s right. Bankruptcy is a legal application to deal with debt you cannot afford to repay. It’s that simple. Whether it is a Fortune-500 business, a solo business practitioner or a single individual, the premise is the same. Debt load beyond the ability to afford is recipe for bankruptcy. This is not just Trump’s take on debt and bankruptcy. It is the basis of bankruptcy law itself.

Often individuals view bankruptcy as a last resort. Typically it is. But bankruptcy is not about what to do with debt you can repay. It is about debt your can’t pay. It is a frustrating financial situation. Stress often accompanies the debt. The source of strife, though, is often not the debt itself, but the inability to do anything about it. This is the pragmatist premise behind Trump’s take on debt and bankruptcy.

Time and knowledge often open bankruptcy options. Hope does spring eternal. And those in debt are no different. People try to repay their debts. Efforts to find ways to pay what is owed frequently finds frustration when the income isn’t there. When the same frustration repeats itself every month, soon a solution is sought. Bankruptcy is often that solution. individuals need to know that bankruptcy is an option for their debts and what it can do.

The stigma of bankruptcy for some is often an impediment to filing. But the reality is there really should be no stigma attached to using federal bankruptcy law to sort out debt problems. As Trump knows, bankruptcy is just a business decision dealing with your debt. It is a tool. Individuals should look at their financial picture with the same business perspective. Your finances are your personal business. Treating your debts as a business problem, as opposed to individual one, might allow you to better deal with your debt issues. And recognizing the worth of filing bankruptcy is one way to do it. Trump did.

  1580 Hits

Title Loans in Bankruptcy

Title Loans in Bankruptcy

Title loans in bankruptcy are a common connection. And for good reason. Title loans, commonly called pink slip loans, cost. They cost a lot! Title loan interest rates can reach nearly 400%.

Title loans use the equity in your vehicle as collateral for a loan. You do not have to own your car outright. But you have to have more equity in it than the loan you take. Repaying the loan is tougher than taking it out. With high interest rates come high repayments. As with payday loans, repaying title loans often involves taking out other loans to make the payments. This is a common cause why title loans in bankruptcy are common. And it is the cause why the government is now reconsidering the regulation of auto title loans and payday loans.

This USA Today story reflects the government’s potential coming crackdown on these loans. Title loans in bankruptcy are a sign that these debts can be bad news. Payday loans certainly are, and are even more prevalent in bankruptcy filings. There is, though, still an argument in favor of title and payday loans. And it stems from the same groups that most commonly discharge these debts in bankruptcy. Namely, the poor. Without them, the argument goes, many would be left without credit. Lenders claim the high interest and costs of these loans are necessary in light of the risk. The government will have to weigh these options in arguments in potentially regulating anew these industries.

If you have such debts, title loans in bankruptcy may work out for you financially. It depends on the type of bankruptcy you file. It also depends on the value of your vehicle, and how long you have had the loan. You can always eliminate title loans in bankruptcy if you give up your car. But there are also bankruptcy tricks of the trade that allow you to keep your car and reduce the amount you owe on your title loan.

Consultations are always free, which is the best way to determine your best financial options to deal with your debt. If you have title (pink slip) or payday loans, considering bankruptcy is good start to ending the amounts you are paying on these loans.

  1679 Hits

Bankruptcy Discharge of Credit Card Debt

Bankruptcy Discharge of Credit Card Debt

Bankruptcy discharge of credit card debt is one one the most common consumer causes of bankruptcy filings. If your credit card debt is more than you can repay, bankruptcy my be a solution. The main premise of filing bankruptcy is coping with debt you are unable to afford. Bankruptcy law allows to to discharge, or eliminate, debt you cannot repay.

If you are able to afford to partially repay your debts, bankruptcy law will require you do so. You may still be entitled to a bankruptcy discharge of credit card debt you can’t repay. So if you can pay back 20% of your debt, bankruptcy law can allow you to eliminate the remaining 80% once you pay the 20% back. Your ability to repay part of your debt and discharge the rest depends on your personal budget. The more you make, the more you can repay. The more your expenses are, the less you can repay. Every case and consumer are different. Typically the type of bankruptcy where you repay part of your debt is called a Chapter 13 bankruptcy.

Often consumers want to repay part of their debt. Though a bankruptcy discharge of credit card debt is part of what may prompt a bankruptcy, repayment of other debts can be a factor. Cars and mortgages are commonly the types of debts that are repaid through a bankruptcy. This is particularly so when consumers are behind, or in default, with these types of loans. A common form of a Chapter 13 bankruptcy reorganization is to repay a delinquent mortgage in full and discharge all your credit card debt.

If you are unable to pay even a portion of what you owe, you can obtain a bankruptcy discharge of your credit card debt in its entirety. This means you will not have to repay back any of your debt. Typically this type of bankruptcy is known as a Chapter 7. To qualify for a Chapter 7 bankruptcy you must meet income eligibility standards. If you earn less than a certain amount, the bankruptcy laws consider you are unable to meet your ordinary living expenses. And if you can’t pay your everyday ling costs, you can’t pay debt you may have on top of that. So say the bankruptcy laws.

Whatever your financial situation is, bankruptcy discharge of your credit card debt can be an option. And it can be a big benefit, both financially and mentally. With consumer credit card debt in America nearing a trillion dollars according to this NPR story and this CNBC video clip, as well as many other sources reflecting the same, bankruptcy is becoming an increased necessity for many.

  1563 Hits

Debt, Income and Bankruptcy

Debt, Income and Bankruptcy

Debt, income and bankruptcy are financial factors that dictate the consumer economy. Debt-to-income ratio is the starting point for evaluating consumer credit. The higher your income, the better your credit. The more debt you have, the worse your credit. Or at least that is the big picture.

Consumer credit controls the cost of financing. The better the credit, the better the cost. Debt and income are obvious factors in this formula. But how does bankruptcy fit in? Filing bankruptcy allows you to discharge your debts. This means the debts are eliminated and never have to be repaid.

Though bankruptcy is an initial negative on your credit after you file, discharging your debts at the conclusion of your bankruptcy is a big benefit. How big that benefit is to you depends on the amount of debt your discharged, or eliminated. By weighing the cost of the bankruptcy impact versus the discharged debt is the essential evaluation of whether to file for bankruptcy. If you have big debt and little income, bankruptcy may be a good option for you. If, though, your debt is not too great and your income enough to handle that debt, maybe bankruptcy is not your best bet. Every situation is different.

Even if your debt-to-income ratio seems ok, bankruptcy may still be a benefit if you have a disproportionate amount of certain debt. Typically credit card debt imbalance in your personal finances will warrant the need to file for bankruptcy. This type of debt does not enhance your income. As such, it is viewed as a drag on your credit.

By discharging your debt through a bankruptcy filing, you can clear your debt-to-income ratio. By doing so, your ratio is cleared for as long as you do not accumulate any more debt. Your bankruptcy impact is only temporary. Though a bankruptcy filing lasts on your record for years longer, improving your credit generally takes only a couple of years.

Continue reading
  1719 Hits

Bankruptcy and Wage Garnishments

Bankruptcy and Wage Garnishments

Bankruptcy and wage garnishments are a natural duo. Though they do the opposite, they are often paired together. If you wages are being garnished, your only option often times is bankruptcy. If, that is, you intend to stop the garnishment.

A wage garnishment is a deduction taken out of your wages to pay off a debt you owe. Normally a wage garnishment is placed on your paycheck by a creditor you owe. The wage garnishment is also referred to as an earnings withholding order. Whatever it is called, a garnishment is a collection practice taken by a creditor to be paid. If bankruptcy is not filed by the wage earner, wage garnishments can tap up to 25% of your net pay. The garnishment lasts until the amount owed has been paid. Unless you file for bankruptcy.

Since a wage garnishment is a form of a court order, it is often imposed involuntarily. You don’t have to allow a garnishment. It is placed there whether you want it or not. Facing such a situation, bankruptcy and wage garnishments often intertwine. Why? Because bankruptcy will stop a garnishment.

As soon as a bankruptcy is filed, the bankruptcy automatic stay is imposed. The effect is immediate. This means that upon filing a bankruptcy, your creditors can no longer collect from you. This includes wage garnishments. This, then, is why bankruptcy and wage garnishments often go together. Take a look at this CNN report on bankruptcy and wage garnishments.

Normally wage garnishments result from judgments. If, for example, you are sued by a creditor and lose, the creditor will win a judgment. Sometimes you may not even be aware of any lawsuit against you and the creditor obtains a judgment without you ever opposing it. This is known as a default. However a creditor wins its claim, a judgment will give it authority to garnish your wages. And unless you file bankruptcy, you are essentially powerless to stop it.

Continue reading
  1529 Hits

Ides of March

Ides of March

According to Wikipedia, the Ides of March marks the date Julius Cesar was slain by his own. The assassination marked the end end of one Roman empire and the beginning of another.

The term ides of March means, literally, only the 15th of March. But the meaning of the term signifies much more. Beware is likely the most popularly accepted term to coin the concept of the Ides of March.

When it comes to debt, beware is often overlooked. Too frequently debt plays too intimate a role in our daily lives. And so with it goes the cost. The costs of debt to consumers can be crippling. And often it is. What, then, to do?

Popularized concepts to control the costs of debt often involve prioritizing and paying down your debt. Picking the most expensive creditors to pay first is another idea that supposedly helps. TheImage result for ides of marchre are other alternatives out there to dealing with your debt. At least those that are part of the popular culture of debt relief. But beware of the Ides of March!

Paying down your debt. Paying one creditor first, faster than the others. And paying sooner rather than later. They are all options to get your debt under control. But as the Ides of March may warn you, these suggestions all involve paying. And often paying more, faster.

Continue reading
  1655 Hits

Bankruptcy Basic: Don’t Lie

Bankruptcy Basic: Don’t Lie

One of the most basic tenets of bankruptcy: don’t lie! It’s not a complicated concept but it is is not always followed. Bankruptcy affords filers a broad range of benefits. Chief among them is the ability to eliminate your debt. Since this is debt that cannot be afforded, bankruptcy can be a big help.

But to reap the bankruptcy benefits, there are obligations. Telling the truth is one of those requirements. When you file bankruptcy you must be truthful in disclosing all your personal and financial information. Your income, expenses and assets are all required in preparing your bankruptcy petition and paperwork.

Your income, including your income history, is required as part of the bankruptcy process. Eligibility for certain bankruptcy filings, including both Chapter 7 & 13 filings, depend on the amount of income you earn. To file for Chapter 7 bankruptcy, your income must be lower than your expenses. For a Chapter 13 bankruptcy your must earn more than you spend. Whatever bankruptcy option you need, you must disclose accurate financial facts.

Same bankruptcy basic goes for disclosing your personal assets. When you file bankruptcy you can protect, or exempt, your property. In most consumer cases all property is protected. But you can’t lie. You must reveal all your property in your bankruptcy paperwork. Leaving out a home or car is a bad idea!

In addition to your personal information, another bankruptcy basic is to not lie about your debt. You must list it all in your bankruptcy petition and paperwork. You cannot pick and choose what debts to include in your bankruptcy. You must disclose all debts when you file bankruptcy. Eligibility and affordability of your bankruptcy is dependent on your accurate disclosure of your debts.

Continue reading
  1747 Hits

Bankruptcy Can Discharge Overpayment of Unemployment and Social Security

Bankruptcy Can Discharge Overpayment of Unemployment and Social Security

Bankruptcy can discharge overpayment of unemployment and Social Security benefits. Like any other unsecured debt, such benefit overpayments are legally binding. But as with most other legally binding debts, bankruptcy can discharge them. There is no special provision in the law that denies the dischargeability of these debts. So if you are overpaid unemployment from the California Employment Development Department (EDD), or benefits from the Social Security Administration (SSA), you can eliminate these debts through bankruptcy.

It is common for people to be overpaid by the EDD and SSA for unemployment and other benefits. Millions of people file for and receive such benefits. Instruction and oversight covering the application for these benefits, though, is slight. Sometimes the money paid does not match the benefits earned. When the EDD or SSA finds out, debt can result. The EDD even has a link on their website concerning overpayments. But again, bankruptcy can discharge the overpayment of unemployment and Social Security Benefits.

The only limitation to bankruptcy being able discharge overpayment of unemployment and Social Security benefits is fraud. If excess benefits are obtained from false information, bankruptcy will not help. Understandably, only overpayment resulting from mistake or innocent error can be dealt with through bankruptcy. The glitch that gave rise to the overpayment must be a mistake. Nothing more. The mistake can be either on your part or the government’s. Whatever way, so long as there is no fraud, overpayment is dischargeable in bankruptcy.

If overpayment of unemployment or Social Security benefits is not discharged in bankruptcy, it must be paid. Unlike most other forms of debt, it can be collected quickly, without the need of a lawsuit. If the government overpays you, they can get it back without having to sue you. Your wages can be withheld (garnished), your tax refund tapped, or a host of other collection tools applied by the government to get their money. Since bankruptcy can discharge overpayment of unemployment and social security benefits, many choose this route.

If the government has already begun collecting for benefit overpayment, it’s not too late to file bankruptcy. Bankruptcy will still allow you to discharge those debts even if the government has already started to collect. If you want to stop your wages from being garnished or your tax refund from being intercepted, file for bankruptcy.

  1548 Hits

Bankruptcy Bang for the Buck

Bankruptcy Bang for the Buck

Bankruptcy bang for the buck is another way of saying whether filing bankruptcy will benefit you financially. In other words, will the savings of a bankruptcy outweigh the cost of filing for bankruptcy?

With the average consumer bankruptcy, credit card debt alone exceeds $23,000. This amount does not include other forms of debt. Medical bills, car repossessions, payday loans and other unsecured debts often accompany the credit card debt figure. For the average bankruptcy filer, then, there is a good bankruptcy bang for the buck.

If, just considering the average credit card debt, the amount spent on interest in a few months is more than the cost of filing a bankruptcy, there is bankruptcy bang for the buck. It is easy to see why. Spending $1,500 filing for bankruptcy is less than the interest you pay on your credit cards over a few months. Spending money on your credit card interest gets you nowhere. Filing bankruptcy gets you a discharge and your debt is done.

The traditional mindset with bankruptcy is file only as a last resort. But given the bankruptcy bang for the buck, maybe that logic is flawed. An article in the Huffington Post suggests filing right away if it is cheaper to file bankruptcy than to manage your debt for a few months. The logic makes sense.

The past mindset of bankruptcy has often been tied to reluctance. People have hesitated from filing. Perhaps fear or some supposed stigma prevents them. But no more. It is a results-oreiented society we now live in. If there is a bankruptcy bang for the buck, people will file. Filing bankruptcy is a legal right. If your finances are such that is is worthwhile, filing bankruptcy makes sense.

Continue reading
  1669 Hits

Discharge Student Loans?

Discharge Student Loans?

Can you discharge student loans in bankruptcy? Maybe soon you can. Eliminating student loans though bankruptcy is not normally allowed under the current bankruptcy code. Though student loan debt is unsecured, like credit card debt and medical bills, it is not treated the same. But times may be changing.

As this editorial piece for the Los Angeles Times reflects, perhaps now is the time to reevaluate whether you can discharge student loans. Student loan debt has skyrocketed over the last decade. So have college costs. Given the tuition increases over the same span it should not be a surprise for the spike in student loan debt.

College costs have exploded and, along with it, debt. College degrees, once considered financial bedrock, have not held their value compared to their costs. If your graduate from college you should earn more. Right? Often this is not so. At least when it comes to the inflated costs to get the degree. Earning $1,000 more per month does little good if that comes with a lifetime debt of $1,200 per month. The math doesn’t make sense. Perhaps, then, now is the time to evaluate whether you should be able to discharge student loans.

Student loan can be eliminated through a separate bankruptcy proceeding. It is a costly procedure. And it takes an extreme showing of hardship to rid yourself of the student loan debt. As I have often commented to clients, you would not want to be able to discharge student loan debt. To discharge student loan debt would not be worth the hardship it would require. Showing an inability to afford the debt is not enough.

Most debt that is discharged in bankruptcy requires, primarily, a showing of inability to afford the debt. Perhaps it is time now to apply this same standard to student loans.

  1729 Hits

Bankruptcy Bad Idea

Bankruptcy Bad Idea

Bankruptcy affords you protection from your creditors and the elimination (or reduction) of your debt. But along with the benefits, bankruptcy comes with restrictions and responsibilities. One limitation is the amount of property you can protect in a bankruptcy. As discussed throughout this website, you can exempt your property when you file bankruptcy. Though there are limitations on the amount and type of property you can protect. Bankruptcy law mandates you disclose all your assets in your bankruptcy filing. Applying exemption laws you can then protect your property. Many, if not most, consumers can protect all they own. Not disclosing all the property you have, though, is a bankruptcy bad idea.

Posting pictures of property you did not disclose in a bankruptcy filing on social media is a really bad bankruptcy bad idea. Rapper 50 Cent may have put himself in this spot. Recently he posted on social media pictures of him surrounded by piles of cash. 50 Cent is in an active bankruptcy case now. If he did not disclose this money in his filing, he may be in big trouble. This news story explains his potential legal predicament.

If 50 Cent had this money when he filed for bankruptcy and disclosed it, no problem. If he didn’t, problem.

If this potential bankruptcy bad idea befalls rapper 50 Cent, he wouldn’t be the first to so fall. Nor would he be the first celebrity to run afoul of the bankruptcy law. Former major league player Lenny Dykstra served time in prison for failing to disclose all his property in his bankruptcy filing. Here is the CNN story portraying his plight.

The message for all is to disclose in your bankruptcy all the property you have. You likely can protect what you have. But no matter, you must list it all. When you sign your bankruptcy paperwork, you do so under penalty of perjury. Lying about what you have–or don’t have–is a bankruptcy bad idea!

  1676 Hits

50 Cent Bankruptcy

50 Cent Bankruptcy

Rapper 50 Cent filed for bankruptcy protection this past sumer. In spite of his bankruptcy status, Curtis Jackson, his real name, posted pictures to social media posing in front of stacks of cash. As reflected in my recent post, if that cash was not disclosed, 50 Cent could be breaking bankruptcy laws. The judge has ordered him to appear in court to explain. Even so, 50 Cent posted more photos in and around stacks of cash.

Maybe the stacks of cash are props. Maybe it is, and maybe it is disclosed. But whatever it is, the bankruptcy judge wants to know. If it is a publicity stunt on the part of 50 Cent, the judge won’t be amused. What is funny is comedian Daniel Tosh’s take on flaunting of assets. Take a look at this video.

The incident has certainly garnered attention, as this Wall Street Journal article reflects. Being in bankruptcy obligates a debtor such as 50 Cent to comply with the mandates of bankruptcy law. In exchange, he is entitled to bankruptcy protection. This includes prevention of collection efforts and lawsuits from creditors. One such creditor suit in Mr. Jackson’s bankruptcy is from a sexual assault claim. If he wants to steer clear of that case in bankruptcy, he should steer clear of posting pictures of cash online.

Another potential problem for 50 Cent arising out of posting pictures of cash online, is possible claims from his creditors. If he did not disclose the cash or otherwise report it as income in his bankruptcy case, it is fraud. Creditors can contest the bankruptcy if he is proven to have committed bankruptcy fraud. This means that although 50 Cent is in an active bankruptcy, he might be stripped of its protection if he did not play by the rules. Creditors could collect from him. Lawsuits against him could resume. And his assets could be seized from those he owes. Posing in and amongst piles of cash and posting the pictures on social media may result in the loss of those piles of cash to 50 Cent.

  1632 Hits
© 2013-2023 James Keenan Law | All rights reserved.