Posts Tagged ‘attorney’

Knowledge is Power, Sort of

I find that many people who are thinking about it will want to investigate some facts about bankruptcy, and get some information about the process before they pick up the phone and speak with me.  And certainly, there’s much information and content on this website – and it’s here for just that reason.  But every lay person needs to maintain some perspective when researching, reviewing and digesting information about bankruptcy and the bankruptcy process.  Today, I had a conversation with a client that reminded me to remind you to keep that perspective.

The most important thing to remember is that research should not replace speaking with counsel and getting a full and fair opinion.  Nothing on this site is designed to be legal advice.  As a matter of fact, you’re unlikely to find anything that amounts to legal advice on the internet.

What you will find is information.  But sometimes, that information can lead to overload – and overload and can lead to confusion.  And today I encountered confusion.

I spoke with a client on the phone who “had done a lot of research” about bankruptcy.  He knew and understood terms like the “Means Test” and “Discharge.”  But he did not quite understand how the Means Test worked – or that the Means Test applied in not just Chapter 7, but that a different version of the form (with entirely different consequences) applied in Chapter 13.

He asked what most might think is a rather straightforward question: “In a Chapter 13, how will they determine how much I can afford to pay back?”  The problem with this seemingly straightforward question is that there is no straightforward answer.  There are many variables, including whether you are over the state’s median income, whether you have payments on secured debt and the status of the case law at the time (and because it is ever-evolving, I tend to view the case law as a moving target).  The other problem is that I cannot answer the question in a phone call or a short initial consult meeting.  It requires information, documents, and an assessment of all of the factors at the time of the filing.

The client is already frustrated, and I can understand why.  Struggling to make ends meet, the client is trying to determine what more will be expected of him and his family in the bankruptcy process.  Yet, there is no easy answer I (or for that matter anyone else) can provide.  At least not an honest one.  The fact I could not provide a quick answer only fed that frustration.

I would not think of going to WedMD to learn how to perform a medical procedure on myself.  I don’t call my dentist to explain why my mouth hurts (which is a good thing, because as I recently learned, it wasn’t what I thought it was).  So with that said, please know  I do not recommend using this site, or any others as a substitute for sitting down with a bankruptcy attorney and giving them all of the information they require.  Then, armed with the facts and sound legal counsel, you can then make the best decision to protect your family from the oppressive debt you find yourself struggling with.  After all, that is why you’re calling me.  And that is why you’re researching bankruptcy information on the internet.

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Rumor Control: Credit Reports and What’s Dischargeable in Chapter 7

I received a call today from someone with questions about Chapter 7. I receive many calls a day, but what made this call interesting was that the caller told me that they conferred with another attorney and was told that with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, only 50% of debt was now dischargeable in a Chapter 7. My response was “nope, not true.”

The caller also told me that according this other attorney there was no law that required a bankruptcy filing to appear on the credit report for 10 years. According to what the attorney purportedly stated: “Credit card companies want you to believe there is a federal law out there that requires it, but there is not.” My reponse was “that’s not my understanding.” Since this issue is not a primary one in my practice, it’s not something I can rattle off the tip of my tounge, like I might be able to with regard to discharge exceptions. So I decided to take a quick detour from my petition preparations and research the issue a bit further.

Let me start with the easy one: nothing in BAPCPA declared that only 50% of debt would be discharged in Chapter 7. If anyone is telling you that, they do not bankruptcy law.

The claim that there is no federal law that requires a credit card company to report a bankruptcy filing is also hogwash (I could think of another term, but this is a professional site). Title 15, Section 1681c(a)(1) of the United States Code states that credit reports may not contain information concerning “[c]ases under Title 11 or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.” And there is an exception. Under 1681(b)(2) a credit report may contain information about a bankruptcy that is more than 10 years old if the report is to be used in connection with a “(1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more; (2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or (3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.”

So the bankruptcy can stay on the credit report for up to 10 years, an din come cases, even longer. If any attorney tells you otherwise, invite them to call me.

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Bankruptcy Court Observations: Bad Lawyering

While my practice is limited to Massachusetts, I understand that people all over the country read this blog. (Of course, they do so with the understanding that it’s not legal advice and that they should confer with a local attorney who can help them.) With that said, my observations this morning in Bankruptcy Court might be helpful to just about anyone facing bankruptcy.

Last week, a Chapter 13 case was filed by a debtor who had a pending Chapter 7 case which had been filed earlier this summer. The judge asked “why do I have two pending bankruptcy cases at the same time?” A good question.

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Top Ten Reasons to Hire an Attorney for Your Chapter 13 Case

When faced with a foreclosure, most people will consider a Chapter 13 filing. But I have been hearing some rumblings here and there that many people seeking protection under Chapter 13 are opting to go it alone, without an attorney. While certainly people have the right to represent themselves, there is no good reason to not hire an attorney for a Chapter 13.. In an effort to drive my point home, I have identified here the Top Ten Reasons Why You Should Not File Chapter 13 Without an Attorney. I’ve also done so while still hoping to leave a smile on your face.

May we hear a drum roll!

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