Bankruptcy Articles and Information
If you are buried in debt and feel like it will be impossible for you to ever dig your way out, filing for bankruptcy may the answer. The purpose of the law is to provide people who have fallen deeply in debt to have a fresh financial start in life. The reasons for needing to file for bankruptcy are not important.
There are different types of bankruptcy. The main ones used by individuals are Chapter 7 and Chapter 13. Each one serves a different purpose and has its own set of filing and discharge rules. No matter which chapter you use, on the day you file your bankruptcy petition, all debt collection by all creditors must immediately stop. A bankruptcy attorney will evaluate your financial situation and the type of debt you have and help you decide which bankruptcy chapter is the one that best meets your needs.
On this past Tuesday, the Honorable Jason Woodard spoke in Columbus, Mississippi about what bankruptcy is and why it is necessary for some people in Mississippi. Judge Woodard is the Chief U. S. Bankruptcy Judge for the Northern District of Mississippi. While speaking to the Columbus Rotarians, he stated that there are some misconceptions about bankruptcy including the misconception that those who file a bankruptcy case are financially irresponsible. Local television station WTVA quoted Judge Woodard as saying, “A lot of times it’s driven by market forces, it’s driven by divorce or illness or a job loss.” Judge Woodard noted…Read More
Before deciding if a debt can be discharged in a bankruptcy, it must be determined whether the debt is a type that can or cannot be discharged. This sounds simple enough but when it comes to divorce and whether or not a debt is a domestic support obligation, it can be much more complicated. As previously discussed in Cynthia Lawson’s blog post of 3/1/2013, there are two types of debts owed to an ex-spouse 1) a domestic support obligation which is defined in 11 U.S.C. §101(14A) and 2) a property settlement obligation. Domestic support obligations are not dischargeable in either…Read More
Cancer and Bankruptcy? Unfortunately, these two issues, one medical and one legal, many times go hand in hand. A recent report by Reuters Health citing a study conducted by Dr. Matthew Banegas at the Kaiser Permanente Center for Health Research in Portland, Oregon, found that one third of cancer survivors ages 18-64 have gone into debt because of their cancer treatment incurring in excess of $10,000 of debt. This debt is caused, in part, by the rising costs of the medical care required to treat cancer. Drug cost are the major financial burden for most cancer patients who are treated…Read More
A Proof of Claim is the method a Creditor uses to get paid in a Bankruptcy. Chapter 7 and Chapter 13 are the 2 main types of Bankruptcy for individuals or consumers. Creditors rarely file a Proof of Claim in a Chapter 7 (or straight Bankruptcy as it is sometimes called) because in most instances the Debtor’s assets fall within their Exemptions and thus there are no funds available to receive any payment. A Chapter 7 is usually over in approximately 3 to 3 ½ months and every debt that you listed in your petition is wiped out or discharged…Read More
If you’ve just received a discharge in a bankruptcy case, then congratulations! You’ve just completed a difficult process and you’re ready to move on with your life and rebuild your credit. There are a few steps you can take to make the rebuilding process easier. Save a Copy of Your Discharge First, be sure to save a copy of the discharge order you received from the Court. That document is the official order that eliminates your personal obligation on the debts in your bankruptcy case. If any of your creditors ever try to collect payment from you, then the discharge…Read More
I previously discussed Puerto Rico’s current debt crisis and the possible solutions to it. As an update, last week the United States House of Representatives passed H.R. 5278, otherwise known as the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), that would hopefully act to ease the island’s debt crisis. The legislation creates a way for the federal government to oversee the fiscal affairs of the territory. Bipartisan Legislation The legislation was a rare display of bipartisanship, passing by a 297-127 vote. In addition to House Speaker Paul Ryan and House Minority Leader Nancy Pelosi, the bill also has…Read More
I get asked this question quite a lot. I think clients worry about doing something that will affect their bankruptcy; and most Trustees stress that a client should ask their attorney questions before they do anything financial. Yes, you can open a bank account while you are in a bankruptcy. There is nothing in the Bankruptcy Code or Court Rules that would prohibit a person filing a bankruptcy from opening an account. A bank account is essentially just another place for you to store your money. Banks are sometimes more secure and convenient, so there are advantages to opening a…Read More
When you have a crisis in your life like financial problems, it can be very difficult to make the leap to seek help. I have made a list of 5 considerations that are helpful when deciding how to choose an attorney to help you with your finances. Did you feel comfortable with the attorney speaking about your financial issues? Was the attorney knowledgeable and explain the process of filing bankruptcy? How was the experience with the office staff? Were you given adequate information about bankruptcy or just quoted a fee? Was the attorney respectful? Comfort in Speaking about Financial Issues…Read More
I recently wrote a letter to my son who just graduated from high school and will be heading off to college in August for his freshman year. The theme of that letter is based on Matthew 7:13-14 wherein Jesus is speaking about the narrow way. He states, “For the gate is wide and the way easy that leads to destruction, and those who enter through it are many. For the gate is narrow and the way is hard that leads to life, and those who find it are few.” The main point of my letter is that the road to life…Read More
I get asked the question, “What if I die before my case is completed?” You might be thinking to yourself why would it matter at all what happens as it won’t affect the deceased person. Well, these clients have often worried about these bills so long that they don’t want their heirs or loved ones having to do the same with their debt after they die. But in reality it really is a good question as a debtor’s death does have consequences for his or her survivors. Fortunately, absent a co-signing with the heir, when people die, their debts are…Read More