Here in the Western District of Pennsylvania, we have "conduit" Chapter 13 plans, which mean that all of your secured loan payments are made inside the Chapter 13 plan. As I've written before, don't draw conclusions about the way that the Chapter 13 process is handled from State to State (or even within your State).
It helps to first recall that there are 3 types of debts in bankruptcy law: (1) secured debts, such as mortgages and car loans and real estate taxes; (2) priority debts, such as delinquent income taxes, and (3) general unsecured debts, such as credit cards, personal loans and medical bills.
So, here goes. Here are my 12 tips to help you understand how the Chapter 13 plan process works here in Western Pennsylvania.
1) Secured debts get paid first along with administrative fees. This means that your monthly mortgage and car loan payments will be made soon after your case is filed and your plan has been confirmed on an interim basis. By administrative fees, I'm referring mainly to attorney fees, which are paid at the same time as monthly secured claims;
2) Over the course of a 60 month plan, the Trustee will make 62 payments to your mortgage company. The Trustee wants your mortgage loan to be paid ahead at the time your case is concluded. Most people appreciate that;
3) If you have mortgage arrears, then those arrears will start being repaid through the plan in perhaps the 2nd or 3rd year of your case depending on how your payments have been going. At the end of your case, the Trustee will file with the Court a "Notice of Cure" which is a declaration that your mortgage is fully current and that there are no pre-petition arrears;
4) Unsecured debts get paid near the bottom of the order. So, your credit card claims might not get paid until the 3rd, 4th or 5th year of your case. It's usually never a problem though. The creditors understand this, and they can't charge interest in a Chapter 13 case anyway;
5) The Judges in the Western District have a rule that a payroll deduction is required of all wage earners in Chapter 13 cases. This is one reason that we have a relatively high rate of completion with Chapter 13 cases. Moreover, if you get paid every 2 weeks (26 times a year), the payroll deduction will be set up for each pay period throughout the year. For example, if your Chapter 13 plan payment is $1,000 monthly, then your payment will be $461.53 every two weeks (and not $500 every two weeks);
6) Yes, the Chapter 13 Trustee has a fee. Currently, that fee is 3 per cent of all payments. In other States, the fee is up to 10 per cent, because their plans are different. The fee however is calculated into your Chapter 13 plan, and the fee is paid periodically throughout the course of the plan;
7) One quirk of our District is that certain utility companies can file "administrative claims" to be paid for post-petition utility bills. Duquesne Light used to file such claims, but it discontinued that practice approximately 3 years ago. Now, just Equitable Gas files such claims. If you stay up to date with your electric and gas bills, you should be fine though;
8) If a Chapter 13 plan appears viable, then the Trustee will recommend that it be confirmed (approved) on an interim basis when you appear at your Meeting of Creditors. This is the Trustee meeting conducted approximately 45 days after your case is filed. The creditors are given a deadline to file "proofs of claim" with the Court. The deadline is usually 5 months after your case has been filed. Generally, you will not be required to appear at the 2nd meeting with the Trustee. This is called the "conciliation conference" or "plan confirmation hearing". If your plan is viable and you've been making regular payments, then the Trustee will recommend that your plan be approved on a final basis;
9) If your financial circumstances change dramatically (e.g., you change employers, or you lose your job or you get a significant payraise), then you should contact your attorney immediately. Your attorney may need to file a "Modification to Confirmed Plan" which might change your Chapter 13 plan in some way, perhaps to reduce the dividend to your unsecured creditors, for example;
10) Mortgage companies are required to file "Notices of Postpetition Mortgage Payment Changes" whenever they readjust their interest rates or escrow payments. Your attorney generally has 15 days to review this Notice and to file a response indicating whether he or she objects to the payment change. Obviously, people rarely object if their mortgage payment is decreased, however if an objection is filed, then the Court will schedule a hearing and require the mortgage company to provide proof;
11) If you miss a Chapter 13 payment, then you've got to make up that payment at some point. And if you miss too many payments, then the Trustee will seek to dismiss your case. Chapter 13 plans can only be extended to 60 months, and that's it! If your having financial problems, my advice is to pay as much as possible to the Trustee. Send in the most that you can possibly afford until you get back on your feet fully;
12) It's good to understand the concept of the Chapter 13 Plan Base. This is the total of all of your plan payments for the entirety of your case. If you have a 48 month plan and your payment is $1,000 monthly, then your plan base is $48,000. So, if you fall behind on payments, you will want to catch up on those missed payments in an effort to regain your progress in satisfying your plan base.
I hope this has been helpful. Let me know if you have questions or comments!
A follow up on the recent post on payday loans. I'm finding a lot of my clients with old payday loans are getting threatening phone calls from debt collectors. These collectors will call cell phones or at home or at work. They use highly-aggressive tactics. For example, they may pose as a police investigator or court official.
These callers will accuse people of fraud (from failing to repay the payday loans) and will ask for immediately payment to avoid arrest and imprisonment.
Please read over this FBI press release from earlier in the year: http://www.fbi.gov/news/pressrel/press-releases/new-twists-to-telephone-collection-scam-related-to-delinquent-payday-loans
I'm finding that more and more of my clients are being bothered by these scam artists. You can't fight them with a Fair Debt Collections Practices Act lawsuit (because how can you sue someone if you don't know who they are, or where they are located!).
So, my advice is to be calm, read over the FBI's press release and don't allow yourself to become agitated. If you do happen to find a legitimate phone number, then please make a note of it and perhaps we can find out who these scam artists are.
P is for Payday Loans in the Bankruptcy Alphabet. I love it when clients tell me that they have payday loans. Why? Because bankruptcy is a great tool with which to fight back against these lenders.
Recently, Pennsylvania legislators chose not to permit payday loans in Pennsylvania. However, folks in Pennsylvania can still go to the Internet to enter into a payday loan. A note to readers: a payday loan is a short-term, usually small (approximately $200 to $700) loan that is meant to be an advance on one's pay. Hence the name, payday loan. The problem all boils down to interest rates, and that's exactly why payday loans are such cash cows for the banking industry. I was shocked to read a payday loan contract that spelled out 750 per cent interest! (No, that's not a typo).
Payday loan debt collectors are among the fiercest and most deceptive of all collection agents. Because they have access to your bank account, payday loan companies generally won't go away until they drain your account. And that's when the harassing collection phone calls start. The collectors will threaten criminal prosecution on the grounds that the client has committed bank fraud (sorry, but I've never seen these types of fraud cases). They'll also state that "bankruptcy doesn't wipe out payday loans".
This is when you've got to stand your ground and remember that you'll be fully protected under bankruptcy laws. Yes, certain debts are exempt from a bankruptcy discharge (wipe out), such as student loans, child support and alimony, most income taxes, among others. But payday loans aren't in that list, and payday loans can definitely be wiped out with bankruptcy.
Three final tips:
1) Keep good records! Write down the names of all payday lenders and help your attorney in finding their address. Your attorney has to list all creditors on your bankruptcy schedules in order for them to be notified. Most payday lenders on the Internet don't list their addresses, so sometimes this is a challenge;
2) Keep a Phone Log of all of the phone calls from your debt collectors. You can fight back using the Fair Debt Collections Practices Act if a payday loan debt collector uses abusive or threatening language to you. You can actually get money damages in a lawsuit against them, and
3) Stay cool when you're on the phone and keep good notes. This can be helpful in turning the tables against the debt collectors!
If you have more questions, please let me know or call my office to discuss your case.
Here's more from the Bankruptcy Alphabet!
This video talks about the 3 questions to ask at your first meeting with a bankruptcy attorney:
1) will my bankruptcy case be approved by the Court?
2) will the Bankruptcy Court permit me to keep all of my property?
3) how will bankruptcy affect my credit rating?
O is for Obligations in the Bankruptcy Alphabet. When you file any type of bankruptcy, your biggest obligation is to tell the truth. When you sign your bankruptcy petition and schedules, you do so under penalty of perjury. You disclose your assets and their worth along with all of your debts, even those that you intend to repay.
If telling the truth is your biggest obligation, there are others as well. Namely, there are some housekeeping matters. Prior to your case being filed, you've got to complete your Pre-Bankruptcy Counseling. Most people choose to complete the Counseling online and it takes anywhere from 30 to 60 minutes to complete. It's easy, but nevertheless, it's essential to complete, because otherwise, your case will be dismissed.
Here's an important tip if you're facing a possible foreclosure: complete your Pre-Bankruptcy Counseling ahead of time. Your certificate of completion is good for six months. If you wait too long, then your attorney may not be able to file your case properly.
Another obligation is your Pre Discharge Course, otherwise known as the Financial Management Course. It's a two-hour class, usually completed online, that addresses basic household financial issues such as budgeting and appropriate credit card usage, as well as tips on rebuilding your credit rating.
I've written previously about the Section 341 Meeting of Creditors. For many people, it's a formality and will only lasts about 10 minutes. You and your attorney will answer questions from the Bankruptcy Trustee assigned to your case. The questions will relate to, among other things, your assets and debts, along with whether you've made recent transfers of assets.
Here's more about the Meeting of Creditors: http://www.pittsburgh-bankruptcy-law.com/blog/bid/59144/What-Actually-Happens-at-a-Chapter-7-Meeting-of-Creditors
Objection from Omaha and Lincoln, Nebraska Bankruptcy Attorney Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/17/bankruptcy-alphabet-o-is-for-objection.aspx
Objection to Discharge from Hilo Bankruptcy Attorney Stuart T. Ing at http://www.bankruptcyhi.com/2012/01/o-is-for-objection-to-discharge/
Obligations from Colorado Springs Bankruptcy Attorney Bob Doig at http://springsbankruptcylaw.com/?p=1237
Old from Cleveland Area Bankruptcy Attorney Bill Balena at http://ohiobankruptcysource.com/o-for-old/
Omitted from Bay Area Bankruptcy Attorney Cathy Moran at http://www.bankruptcysoapbox.com/bankruptcy-alphabet-o-for-omitted/
Omitted Creditor from St. Clair MI Bankruptcy Attorney Kurt OKeffe at http://stopcreditor.com/oh-oh-bankruptcy-danger-omitted-creditor/
OOPS from Metro Richland Consumer and Bankruptcy Attorney Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-o-is-oops.html
Options to Bankruptcy from Suburban Philly Bankruptcy Attorney Chris Carr at http://christophercarrlaw.wordpress.com/2011/12/15/o-is-for-options-to-bankruptcy/
Own from New York Bankruptcy Attorney Jay S. Fleisman at http://www.consumerhelpcentral.com/bankruptcy-alphabet-own/
Objection by Creditor from Southgate Michigan Bankruptcy Attorney Chris McAvoy at http://downriverbankruptcy.com/bankruptcy-blog-2/#axzz1nCk15ydJ
Offer in Compromise from San Mateo Bankruptcy Attorney Jeff Curl at http://www.jclawgroup.com/blog/bankruptcy-alphabet-o-is-for-offer-in-compromise/
Orders from Wisconsin Bankruptcy Attorney Bret Nason at http://nasonlawfirm.com/archives/834
Organize from Marin County Bankruptcy Attorney Cate Eranthe at http://marin-bankruptcy-law.com/855/bankruptcy-a-to-z-o-is-for-organize/
Organization in Bankruptcy from Los Angeles Banruptcy Attorney Mark J Markus at http://www.bklaw.com/bankruptcy-blog/2012/03/being-organized-in-bankruptcy/
Objection at Lakewood California Bankruptcy Attorney Christine A. Wilton at http://www.losangelesbankruptcylawmonitor.com/2012/09/articles/chapter-13/o-is-for-objection/
Objections to Confirmation from Livionia Michigan Bankruptcy Attorney Peter Behrmann at http://www.losangelesbankruptcylawmonitor.com/2012/09/articles/chapter-13/o-is-for-objection/
N is for No-Asset Case in the Bankruptcy Alphabet. Basically, this refers to a Chapter 7 case in which the debtor will retain all of his or her property. I'm not talking about any property that is secured (let's say a mortgage or a car loan), because you can decide, if you wish, to surrender an unwanted house or vehicle that might be over-encumbered.
The "no-asset" part means that Chapter 7 Trustee will not sell any of the debtor's assets.
The big distinction is between a corporation or an individual person filing a Chapter 7 case. Corporations cannot exempt (protect) any of their property when filing a Chapter 7 case. But individuals can indeed protect their assets. And in Pennsylvania, they can protect a lot of assets, because our exemption laws are quite generous, unlike in other states.
What gets me mad however is when I read articles (such as this one) in the mass media about Chapter 7 debtors having to liquidate their property after filing. The Chapter 7 Trustee doesn't arrive unannounced at your house in order to poke around your possessions. The vast majority (more than 98%) of all the individual Chapter 7 cases filed in Pennsylvania are "no asset" ones. So, after your Meeting of Creditors, the Trustee in your case will file a Report of No Distribution with the Bankruptcy Court.
Conversely, if your case is an asset case, then the Trustee will be the one to sell the piece of property and divide the proceeds between your unsecured creditors.
Moreover, a competent bankruptcy attorney will be able to advise you in ways to value your property and maximize your bankruptcy exemptions. Prior to filing your case, a good attorney will be able to tell you whether you will be able to retain all of your property or not. No one wants a surprise in their 341 Meeting of Creditors.
If you have questions about this or other aspects of bankruptcy law, please email me or type in a comment below.
Here are more contributions to the Bankruptcy Alphabet:
California Northern Bankruptcy Court from Marin County Bankruptcy Attorneyc Cate Eranthe at http://marin-bankruptcy-law.com/803/bankruptcy-a-to-z-n-is-for-california-northern-bankruptcy-court/
NACBA from Wisconsin Bankruptcy Attorney, Bret Nason at http://nasonlawfirm.com/archives/813
Naked from New York Bankruptcy Attorney, Jay S. Fleischman at http://www.consumerhelpcentral.com/bankruptcy-alphabet-naked/
Negative Notice from Jacksonville Bankruptcy Attorney, J. Dinkins G. Grange at http://jacksonville-bankruptcy-grange.blogspot.com/2012/02/n-is-for-negative-notice-local-rule.html
Never Cleveland Area Bankruptcy Attorney, William Balena at http://ohiobankruptcysource.com/n-for-never/
No Asset from Metro Richland Consumer and Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-n-is-for-no-asset-case.html
No Asset Report from Honolulu Bankruptcy Attorney, Stuart T. Ing at http://www.bankruptcyhi.com/2012/01/n-is-for-no-asset-report/
Non-exempt Property from Miami Bankruptcy Attorney, Dorota Trzeciecka at http://dorotatrzeciecka.com/2012/02/05/bankruptcy-a-z-n-is-for-non-exempt-property/
Nondischargeable from Metro Richland Consumer Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-n-is-for-nondischargeable.html
Nondischargeable from Northern California Bankruptcy Attroney, Cathy Moran at http://www.bankruptcysoapbox.com/bankruptcy-alphabet-n-for-nondischargeable/
Nondischargeable Dept from Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/16/bankruptcy-alphabet-n-is-for-nondischargeable-debt.aspx
Notice from Colorado Springs Bankruptcy Attorney, Bob Doig at http://springsbankruptcylaw.com/colorado-springs-bankruptcy-abcs-n-for-notice/
Notice from San Francisco Bankruptcy Attorney, Jeff Curl at http://www.jclawgroup.com/blog/bankruptcy-alphabet-n-is-for-notice/
Notice from Taylor, Michigan Bankruptcy Attorney, Chris McAvoy at http://downriverbankruptcy.com/notice-creditors/
Notice of Rights to Claim Exemptions from Charlotte Bankruptcy Attorneys, Collum and Perry at http://www.collumperry.com/firm-news/notice-of-rights-to-claim-exemptions
Numbers and New Bankruptcy Laws from Los Angeles Bankruptcy Attorny, Mark J. Markus at http://www.bklaw.com/bankruptcy-blog/2012/03/numbers-and-new-bankruptcy-laws/
Non-Attorney Bankruptcy from Livonia Michigan Bankruptcy Attorney, Peter Behrmann at http://www.livoniamichiganbankruptcy.com/n-is-for-non-attorney-bankruptcy-livonia-michigan/
Negative Impact on Credit and Bankruptcy from Philadelphia Suburban Bankruptcy Attorney, Chris Carr at http://christophercarrlaw.wordpress.com/2012/07/07/negative-impact-of-bankruptcy-on-credit-and-how-to-overcome-it/
M is for Mortgage Arrears in the Bankruptcy Alphabet. Today, I'm talking mostly about Chapter 13 cases where folks want to save their home from foreclosure.
Let's say that you're 6 months behind on your mortgage, and you're facing a potential sheriff's sale.
You've got two choices. You can apply for a mortgage modification through your mortgage company. But good luck with that: you stand only about a 10 to 15 per cent chance of success. And some mortgage companies simply refuse to modify their mortgage loans (do the words "Wells Fargo" mean anything to you?) (or how about "Household Mortgage"?). Like I said, good luck with that!
Or your other choice is to simply cut to the chase and stop the foreclosure process for good: you file a Chapter 13 bankruptcy petition. The "automatic stay" of the Bankruptcy Court brings the foreclosure to a screeching halt.
When I meet with new clients, I need to know the exact amount of their monthly mortgage payment (bring me a recent statement, if you have one). I also like to get a "reinstatement amount", which you can obtain by calling the mortgage company. This is the precise amount of money needed to catch up on your mortgage. It might take 2 or 3 days to get an exact reinstatement, but it can help me.
With a Chapter 13 case, I need to know a few other matters, such as car loans and tax debt and credit card debt. If the mortgage numbers are usually the most important to determine. Once I have these figures, I can calculate with pretty good accuracy the amount of your Chapter 13 plan payment.
Can we fight these mortgage arrears? Sure, these reinstatement amounts are often filled with unnecessary costs and sometimes just plain math errors. After a Chapter 13 case is filed, the creditors are asked to submit "proofs of claim" to the Court, which are itemizations of the debts owed. Often, mortgage companies submit proofs of claim with inflated arrears amounts.
You have the opportunity to contest these amounts and ultimately to reduce your overall payment.
In any event, a Chapter 13 filing can be for many people the best option to save their home from foreclosure.
Here's another mortgage modification article to think about.
More on the Bankruptcy Alphabet to follow:
Mortgage Arrears in Bankruptcy Court from Pittsburgh Bankruptcy Attorney Shawn N. Wright at http://www.pittsburgh-bankruptcy-law.com/blog/bid/121989/M-is-for-Mortgage-Arrears-in-Bankruptcy-Court
Means Test from Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/15/bankruptcy-alphabet-m-is-for-means-test.aspx
Means Test New York Bankruptcy Attorney, Jay S. Fleischman at http://www.consumerhelpcentral.com/m-is-for-means-test/
Meeting of Creditors from Colorado Springs Bankruptcy Attorney, Bob Doig at http://springsbankruptcylaw.com/colorado-springs-bankruptcy-abcs-m-for-meeting-of-creditors/
Modify from Northern California Bankruptcy Attorney, Cathy Moran at http://www.bankruptcysoapbox.com/bankruptcy-alphabet-m-for-modify/
Monthly Income from Metro Richland Consumer and Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-m-is-for-monthly-income.html
Mortgage Arrears from Hawaii Bankruptcy Attorney, Stuart T. Ing at http://www.bankruptcyhi.com/2012/01/m-is-for-mortgage-arrears/
Mistakes from Cleveland Area Bankruptcy Attorney, Bill Balena at http://ohiobankruptcysource.com/m-for-mistakes/
Marriage from San Francisco Bankruptcy Attorney, Jeff Curl at http://www.jclawgroup.com/blog/bankruptcy-alphabet-m-is-for-marriage/
Median Income: Above or Below, Does it Matter? from Los Angeles Bankruptcy Attorney, Mark J. Markus at http://www.bklaw.com/bankruptcy-blog/2012/02/median-income-bankruptcy/
Members of Household from Wisconsin Bankruptcy Attorney, Bret Nason at http://nasonlawfirm.com/archives/797
Mortgages and Bankruptcy from Taylor Michigan Bankruptcy Attorney, Christopher McAvoy at http://downriverbankruptcy.com/mortgages-bankruptcy#axzz1mvwM75xF
Means Test from Marin County Bankruptcy Attorney, Catherine Eranthe at http://marin-bankruptcy-law.com/668/m-is-for-means-test/
Median Income from Linonia Michigan Bankruptcy Attorney, Peter Behrmann at http://www.livoniamichiganbankruptcy.com/medianincome/
L is for lien avoidance actions in Bankruptcy Court. In order to truly get a fresh start after bankruptcy, it's best to get rid of all judgment liens. Last week, I discussed "judgments" in the bankruptcy alphabet. There, I talked about the need to file a "suggestion of bankruptcy" in any pending civil cases in which you are a defendant.
So, what happens if there's already been a judgment filed? As you're aware, that judgment may later hamper your ability to get credit, because a prospective mortgage or car lender will want that judgment removed from your credit report before approving your loan.
Thus, it's important to use the tools provided by bankruptcy law to remove that judgment. During your case, you'll want to file a motion to avoid judgment lien on the basis that the lien is "impairing an exemption" in property that you own and that you wish to protect.
I'll show you an example: let's say that Discover Card got a judgment against you last year for $6,500. You file a Chapter 7 case now and during the four months of your Chapter 7 case, your attorney should file a "motion to avoid lien" against Discover. That motion is in the form of a 2 to 3 page document filed with the Bankruptcy Court. It will explain that Discover's lien is impairing (reducing) the amount of equity that you have in your property (usually your house). Section 522 of the Bankruptcy Code gives you the right to have the Bankruptcy Court eliminate that judgment lien.
If you don't have any equity in your property, don't worry. You're still able to get rid of the judgment lien.
Unfortunately, you won't be able to avoid IRS secured tax liens or other liens, such as sewage liens, but nevertheless, judgment lien avoidance actions are extremely common and useful in Bankruptcy Court. It's a great way to rebuild your credit as well!
Here's more in the Bankruptcy Alphabet:
Lien Avoidence in Bankruptcy from Pittsburgh Bankruptcy Attorney, Shawn N. Wright at http://www.pittsburgh-bankruptcy-law.com/blog/bid/121987/L-is-for-Lien-Avoidance-in-Bankruptcy
Lie, the Big Mortgage Industry from St. Clairs Shores MI Bankruptcy Attorney, Kurt OKeffe at http://www.michiganmortgageattorney.com/mortgage-modifications-big-lie/
Lien from New York Bankruptcy Attorney, Jay S. Fleischman at http://www.consumerhelpcentral.com/bankruptcy-alphabet-lien/
Lien Stripping from Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/14/bankruptcy-alphabet-l-is-for-lien-stripping.aspx
Lift the Stay from Marin County Bankruptcy Attorney, Catherine Eranthe at http://marin-bankruptcy-law.com/407/bankruptcy-a-to-z-l-is-for-lift-the-stay/
Luxuries from Colorado Springs Bankruptcy Attorney, Bob Doig at http://springsbankruptcylaw.com/colorado-springs-bankruptcy-abcs-l-for-luxuries/
Long Term Payments, Chapter 13 Plans from Philadelphia Suburban Bankruptcy Attorney, Chris Carr at http://christophercarrlaw.wordpress.com/2012/02/04/long-term-payments-chapter-13-plans/
Liquidated from Metro Richland Consumer and Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-l-is-for-liquidated.html
Lien Stripping from Honolulu Bankruptcy Attorney, Stuart T. Ing at http://www.bankruptcyhi.com/2012/01/l-is-for-lien-stripping/
List It Or Lose It from Allen Park, Michigan Bankruptcy Attorney, Christopher McAvoy at http://downriverbankruptcy.com/stands-list-lose/#axzz208umE7D3
Life Insurance from Cleveland Area Bankruptcy Attorney, Bill Balena at http://ohiobankruptcysource.com/l-for-life-insurance/
Life After Bankruptcy from San Francisco Bankruptcy Attorney, Jenna Cho at http://www.jclawgroup.com/blog/bankruptcy-alphabet-l-is-for-life/
L: Listing Assets and Debts in Bankruptcy from Los ANgeles Bankruptcy Attorney, Maruk J. Markus at http://www.bklaw.com/bankruptcy-blog/2012/02/l-listing-debts-and-assets-in-bankruptcy/
Lawyer from Wisconsin Bankruptcy Attorney, Bret Nason at http://nasonlawfirm.com/archives/786
Limits of Bankruptcy from Livonia Michigan Bankruptcy Attorney, Peter Behrmann at http://www.livoniamichiganbankruptcy.com/l-is-for-limits-of-bankruptcy/
L is for Levy from Lakewood California Bankruptcy Attorney, Christine A. Wilson at http://www.losangelesbankruptcylawmonitor.com/2012/07/articles/bankruptcy-law-overview/bankruptcy-alphabet/l-is-for-levy/
K is for keeping your 401k if you have debt problems. In other words, don't take out money from your 401k to pay your creditors.
And there are four big reasons for my advice:
- You can fully protect your 401k or IRA if you file bankruptcy. Neither the Bankruptcy Trustee nor your creditors can get access to your retirement funds. This is a great aspect of bankruptcy law;
- If you borrow from your 401k, then you'll likely wind up with tax problems with the IRS, because you've now got to pay penalty and taxes on that money;
- Unless you plan on working forever and never aging (hmm, please share your secrets with me on the never-aging part), then you'll eventually need those retirement funds in your later years;
- Most people, and I've met a lot of them who've done this, simply don't have enough retirement funds to fully pay off their debts. So, they wind up broke, with no retirement plan, and they still have a lot of debt left over.
I've met with thousands of people with debt problems over the years, and one of the most common complaints they have is that they should have filed bankruptcy sooner. So, it's important to simply schedule an appointment with a bankruptcy attorney just to learn mre about your legal rights.
If you want to learn more, please download my free e-book on Western Pennsylvania Bankruptcy Law.
More on the Bankruptcy Alphabet below:
Reasons to keep your 401k from Pittsburgh Bankruptcy Attorney, Shawn N. Wright at http://www.pittsburgh-bankruptcy-law.com/blog/bid/122188/K-is-for-4-Reasons-to-Keep-your-401k
401k from Marin County Bankruptcy Attorney, Catherine Eranthe at http://marin-bankruptcy-law.com/367/bankruptcy-a-to-z-k-is-for-401k/
Keep from Northern California Bankruptcy Attorney Cathy Moran at http://www.bankruptcysoapbox.com/bankruptcy-alphabet-k-for-keep/
Keep your Retirement Accounts from Taylor, Michigan Bankruptcy Attorney, Christopher McAvoy at http://downriverbankruptcy.com/keeping-retirement-accounts-bankruptcy/#axzz1iw54PK20
Keeping Secure Loans from Hawaii Bankruptcy Attorney, Stuart T. Ing at http://www.bankruptcyhi.com/2012/01/k-is-for-keeping-secured-loans/
Keeping your Business from Dorota Trzeciecka Bankruptcy Blog at http://dorotatrzeciecka.com/2011/11/11/k-is-for-keeping-your-business-in-bankruptcy/
Keys from New York Bankruptcy Attorney, Jay S, Fleischman at http://www.consumerhelpcentral.com/bankruptcy-alphabet-keys/
Kids from Colorado Springs Bankruptcy Attorney, Bob Doig at http://springsbankruptcylaw.com/colorado-springs-bankruptcy-abcs-k-for-kids/
Knowledge from Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/13/bankruptcy-alphabet-k-is-for-knowledge.aspx
Knowledge from Metro Richland Consumer and Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-k-is-for-knowledge.html
Know from Cleveland Area Bankruptcy Attorney, Bill Ballena at http://ohiobankruptcysource.com/k-for-know/
Keep from San Francicso Bankruptcy Attorney, Jenna Cho at http://www.jclawgroup.com/blog/bankruptcy-alphabet-k-is-for-keep/
Dangers of Borrowing Against 401K from Los Angeles Bankruptcy Attorney, Mark J. Markus at http://www.bklaw.com/bankruptcy-blog/2012/01/retirement-borrowing-dangers/
Keeping Debt Collectors at Bay from Wisconsin Bankruptcy Attorney, Bret Nason at http://nasonlawfirm.com/archives/780
Knowing What Attorney to Hire from Livonia Michigan Bankruptcy Attorney, Peter Behrmann at http://www.livoniamichiganbankruptcy.com/knowing-what-bankruptcy-attorney-to-hire/
Knight in Shining Armor from Philadelphia Suburban Bankruptcy Attorney, Chris Carr at http://christophercarrlaw.wordpress.com/2012/04/18/k-is-for-knight-in-shining-armor/
Kaput from Lakewood California Bankruptcy Attorney, Christine Wilton at http://www.losangelesbankruptcylawmonitor.com/2012/06/articles/bankruptcy-law-overview/bankruptcy-alphabet/k-is-for-kaput/
J is for judgments in the Bankruptcy Alphabet. What is a "judgment"? It's simply when a court rules against you. More specifically, what I'm referring to is a money judgment.
I'm specifically focused on removing or preventing judgments from being entered against my clients. So, if a prospective client has retained me to file a bankruptcy case, then my goal is to file the bankruptcy petition as soon as possible to prevent the entry of a default judgment. Somewhat confusingly under Pennsylvania law, a civil complaint filed by, let's say, a credit card company will often state that the hearing is scheduled for approximately 90 days from now. However, in small print, the cover sheet of the complaint, along with the second page, will also state that the defendant has 20 days to file a written response with the County Court of Common Pleas. Ah ha, if you forget to file a written answer, then the Court can issue a automatic default judgment against you. So, the judgment is entered, and that hearing scheduled in 90 days will be cancelled.
Immediately after filing a bankruptcy case, a good attorney will file a "Suggestion of Bankruptcy" in each and every pending court case. This puts creditors on notice that a bankruptcy petition has been filed, and that there can be no further activity in the Civil Court case without Bankruptcy Court approval. Basically, the bankruptcy filing will automatically trump activity in virtually any other court venue. There are a few exceptions, for example, certain Family Court cases and Criminal Court cases will continue unabated. But otherwise, virtually any Civil Court case will be automatically stopped.
Not all judgments are liens, which I will talk about later this week. A lien is a judgment that attaches to either real estate or personal property. In Bankruptcy Court, we are able to eliminate ("avoid") certain judgment liens entirely.
If you have questions or comments, please let me know. Also, please download my free e-book on Western Pennsylvania Bankruptcy Law!
Here are some more entries from the Bankruptcy Alphabet
Joint Bankruptcy Filling from Southgate Michaigan Bankruptcy Attorney, Christopher McAvoy at http://downriverbankruptcy.com/joint-bankruptcy-filing/#axzz1ie0BQpr7
Joint Debts from Hawaii Bankruptcy Attorney, Stuart T. Ing at http://www.bankruptcyhi.com/2011/12/j-is-for-joint-debts/
Joint Filling from Marin County Bankruptcy Attorney, Catherine Eranthe at http://marin-bankruptcy-law.com/360/bankruptcy-a-to-z-j-is-for-joint-filing/
Judgment from Omaha and Lincoln, Nebraska Bankruptcy Attorney, Ryan D. Caldwell at http://bankruptcyblog.caldwell-lawfirm.com/2011/11/12/bankruptcy-alphabet-j-is-for-judgment.aspx
Judgment Debtor from San Francisco Bankruptcy Attorney, Jeena Cho at http://www.jclawgroup.com/blog/bankruptcy-alphabet-j-is-for-judgement-debtor/
Judgment Liens from Colorado Springs Bankruptcy Attorney, Bob Doig at http://www.jclawgroup.com/blog/bankruptcy-alphabet-j-is-for-judgement-debtor/
Judgment Liens from Philadelphia Suburban Bankruptcy Attorney, Chris Carr at http://christophercarrlaw.wordpress.com/2012/01/01/j-is-for-judgment-lien-and-its-effects-on-homeowners/
Judicial Lien from Cleveland Area Bankruptcy Attorney, Bill Balena at http://ohiobankruptcysource.com/j-for-judicial-lien/
Jurisdiction from Metro Richland Consumer and Bankruptcy Attorney, Mitchell Goldstein at http://www.morethanbankruptcy.com/bankruptcy-a-z-j-is-for-jurisdiction.html
Justice in Bankruptcy from Los Angeles Bankruptcy Attorney, Mark J. Markus at http://www.bklaw.com/bankruptcy-blog/2012/01/bankruptcy-justice/
Justify from Northern California Bankruptcy Attorney, Cathy Moran at http://www.bankruptcysoapbox.com/bankruptcy-alphabet-j-for-justify/
Your Personal Finance Lawyer from New York Bankruptcy Attorney, Jay S. Fleischman at http://www.consumerhelpcentral.com/jay-fleischman-personal-finance-lawyer/
Jail from Wisconsin Bankruptcy Attorney, Bret Nason at http://nasonlawfirm.com/archives/770
Joint Bankruptcy from Livonia Michigan Bankruptcy Attorney, Peter Behrmann at http://www.livoniamichiganbankruptcy.com/i-is-for-internal-revenue-service-irs-tax-debt-in-bankruptcy/
Judge from Southern California Bankruptcy Attorney Christine A. Wilton at http://www.losangelesbankruptcylawmonitor.com/2012/06/articles/bankruptcy-law-overview/bankruptcy-alphabet/j-is-for-judge-julia-gibbons-bankruptcy-predictions-for-2013/