Monthly Archives: December 2009

The National Association of Consumer Bankruptcy Attorneys is THE organization for bankruptcy attorneys in the United States. NACBA associated attorneys have access to resources and education benefits that non-member attorneys don’t. Make sure that your bankruptcy attorney is a member of NACBA.

 NACBA is recognized by members of Congress and their staffs, by the media and by the Judicial Branch as the leading voice in America on consumer bankruptcy law. The Association and its members frequently are called upon to testify before legislative and judicial bodies and share their expertise. NACBA is also the leading force against the anti-debtor legislation in Congress that the consumer credit industry has sought so aggressively. NACBA’s involvement and its team of effective legislative advocates in Washington ensure that NACBA will continue to play a key role in shaping the outcome of policy-related debates on consumer bankruptcy issues.

We refer our clients to the following websites for the Pre / Post discharge education.

Pre-filing education can be done at http://personalfinanceeducation.com

For post bankruptcy filing education see  http://www.nationalpersonalfinance.com or http://www.getbankruptcycertificate.com

If you would rather take the course via the phone rather than online then another option is to use MyBKnow.com or 1-877-692-5669. They are on Pacific time and they offer phone courses between 8am – 8pm PST. Be sure to use coupon code 7386GGBK and get a discounted price of $35 per course.

Of course there are MANY other companies that offer this education in my opinion these offer the best courses for the lowest amount. Have you used another that you liked better? Tell us about it in the comments section.

If you need to speak to someone about filing bankruptcy then call The Law Offices of Jill McDonald for your FREE consultation.

If a creditor attempts collection efforts on a discharged debt, the debtor can file a motion with the court, reporting the action and asking that the case be reopened to address the matter. The bankruptcy court will often do so to ensure that the discharge is not violated. The discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be sanctioned by the court for violating the discharge injunction. The normal sanction for violating the discharge injunction is civil contempt, which is often punishable by a fine.

Excerpted from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

We can help stop those calls. Give us a call at the Law Offices of Jill McDonald.

Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons (based either on the nature of the debt or the fact that the debts were incurred due to improper behavior of the debtor, such as the debtor’s drunken driving).

There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.

Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523(a) applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.

The types of debts described in sections 523(a)(2), (4) and(6) (obligations affected by fraud or maliciousness) are not automatically excepted from discharge. Creditors must ask the court to determine that these debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, the types of debts set out in sections 523(a)(2), (4) and (6) will be discharged.

A slightly broader discharge of debts is available to a debtor in a chapter 13 case than in a chapter 7 case. Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings. Although a chapter 13 debtor generally receives a discharge only after completing all payments required by the court-approved (i.e., “confirmed”) repayment plan, there are some limited circumstances under which the debtor may request the court to grant a “hardship discharge” even though the debtor has failed to complete plan payments. Such a discharge is available only to a debtor whose failure to complete plan payments is due to circumstances beyond the debtor’s control. The scope of a chapter 13 “hardship discharge” is similar to that in a chapter 7 case with regard to the types of debts that are excepted from the discharge. A hardship discharge also is available in chapter 12 if the failure to complete plan payments is due to “circumstances for which the debtor should not justly be held accountable.”

Excerpted from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 (liquidation) case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In a chapter 13 (adjustment of debts of an individual with regular income), the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor’s discharge in a chapter 13 case if the debtor fails to complete “an instructional course concerning financial management.” The Bankruptcy Code provides limited exceptions to the “financial management” requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.

Excerpt paraphrased from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.

Excerpted from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

The Bankruptcy Court can’t take my car if I file a Chapter 7 bankruptcy, right?

This is a common question for people filing bankruptcy in Florida. Many people assume that the Court will understand that they need the car for transportation—especially for work—and will allow them to keep the car for that reason. After all, how can the Bankruptcy Court expect you to get to work if they take your car? Sadly, in some cases you can lose your car.

Vehicle Exemption

Filing bankruptcy in Florida requires the Trustee to review your property and determine what is “exempt” from seizure by the Court. Exemption schemes do vary by state, and in Florida you are generally allowed to keep $1,000 equity in a vehicle. Equity refers to the value of the vehicle, in excess of liens, that you have in your property. For example, if you own a 2003 Honda Civic, the Kelley Blue Book value is approximately $6,800. If you own the car outright, with no lien, your equity is then $6,800. The Trustee would be able to sell the vehicle for the $6,800, give you $1,000 for your exemption, and then keep the remainder to pay the creditors. If you had the same car but with a lien on it for $6,000, your equity would only be $800, and you would be within the exemption limits and the Trustee would not be interested in taking your car.

Other Factors

Things get a little more confusing when you are married, and not jointly on the titles of your vehicles. For example, only the person whose name is on the title can claim an exemption on that vehicle. This can become complicated if only one spouse’s name is on two vehicle titles. Also, if the vehicle is owned jointly with someone else, your portion of ownership has to be determined to make the correct exemption calculation.

In Florida, there is a “wildcard” exemption that may be available to you to help in exempting equity in your vehicle, or in other property. Ordinarily, this exemption is only available if you do not own your own home, or own a mobile home but not the ground underneath it. This exemption can be used to exempt property that otherwise would become assets available to the Bankruptcy Trustee.

Protect Your Assets

To find out how the laws apply to your assets, contact a bankruptcy lawyer. Their goal is to help you protect your assets to the full extent of the law. They may have options available under the exemption laws that apply to your case, allowing you to keep your vehicle—and protecting your ability to get a fresh start.

To speak to an attorney that is experienced with the laws of bankruptcy contact Jill or Steve at The Law Offices of Jill McDonald.  Simply email us or phone us at (727)231.4300.

To have your student loans discharged you must show that repaying your student debt will impose an “undue hardship” on you and your dependents. Usually student loans are not able to be discharged.

In order to have your student loans discharged, you must file a separate motion and present your case to a judge. Both privately funded and federally funded student loans are treated the same way.

It is difficult, but not impossible, to show such a hardship. However, you generally will not be able to prove undue hardship unless the court finds that you are physically unable to work and have no chance of gaining future employment.

To speak to an attorney that is experienced with the laws of bankruptcy contact Jill or Steve at The Law Offices of Jill McDonald.  Simply email us or phone us at (727)231.4300.

Are you delinquent on your home loan? Have you fallen behind on your monthly mortgage payment? What about your adjustable rate mortgage? Is it still affordable? If any of these pertain to you then you are not alone. Millions of people default on their mortgage every year. But there are ways to prevent foreclosure. First and foremost, don’t be afraid to ask for help. Here are some tips that may help you avoid foreclosure.

• Contact your lender
  • Many times your bank or financial institution will work with you to find reasonable arrangements with borrowers rather than foreclosing on the loans immediately. Act early and let your lender know that you are having financial difficulties but you are wanting to work with them. Don’t wait  too long or ignore the letters that they send you. You just might wait too long and they will start the foreclosure before you have time to act.
• Avoid Foreclosure Scams
  • It’s sad but there are some out there that want to take advantage of your situation. Be careful of companies that promise to save your home. They may just be after the equity you have built up in your home. Here are some examples of what to look out for.
    • The foreclosure prevention specialist: Not a specialist at all but more of a phony counselor who charges hefty fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. There are HUD approved counselors available. Check out their website for more information.
    • The lease/buy back:  They will try to deceive you into signing over the deed to your home to a scam artist who tells you that you will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, you get evicted, and the “rescuer” walks off with most or all of the equity.
    • The bait-and-switch: Be very aware of what you are signing. Here the scammer will make the  Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.
• Contact a HUD Approved Housing Counselor
  • The U.S. Department of Housing and Urban Development (HUD) maintains a list of approved housing counselors who give advice for free or at a low cost.  To find a HUD-approved counselor in your area call  1-800-569-4287  1-800-569-4287 or online to view the HUD Approved Housing Counseling Agencies in Florida.
  • Homeowner’s HOPE, a service of the nonprofit Homeownership Preservation Foundation, and NeighborWorks America, a national nonprofit organization, have established a toll-free hotline to help homeowners avoid foreclosure by providing free advice and support. Callers can receive immediate free counseling from nonprofit, HUD-certified organizations 24 hours a day, 7 days a week.
    Phone:   1-888-995-HOPE  1-888-995-HOPE (4673)
• NACA Home Save Program: The Neighborhood Assistance Corporation of America is a great organization that has helped many with getting their loans refinanced. Check out their Ten Step program for getting your home refinanced.

There are MANY other programs out there the assist you in saving your home. There are programs for veterans, low income earners, and emergency assistance programs for those that have fallen on hard times. Call some of the above mentioned programs for more information or do some research online.

Many times foreclosure may be inevitable and your only way out of it could be to file bankruptcy. In a chapter 13 bankruptcy you will work out a payment plan to help you get caught up and you could also discharge other debts.  If you would like to speak to an Attorney about how then call Jill or Steve at (727)231-4300 to set up an appointment You can also visit our website at JillMcDonald.com.

Did you know that you can get one free credit report every year from the three big reporting agencies? That’s right, you can get a free report from Experian, Equifax, and Transunion. This is the ONLY government approved offer for free credit reports. Do you know the one with the catchy jingles on TV? They’re not so free. Don’t be fooled by their good humor and slick advertising. You can request your free report online, by phone or by mail. Visit AnnualCreditReport.com, call 1-877-322-8228, or fill out the Annual Credit Report Request form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. No matter how you request your report, you have the option to request all three reports at once or to order one report at a time.