Posted on July 31, 2009 by Bryan Fears

Consumer Bankruptcy Filings on the Rise

Consumers filed 675,351 bankruptcy filings in the first half of 2009, an increase of 36.5
percent from a year ago according to the American Bankruptcy Institute (ABI). Samuel J.
Gerdano, Executive Director of the ABI, expects new bankruptcy filings during 2009 to
exceed 1.4 million. That would be a substantial increase over the 1.06 million in 2008 and
801,840 during 2007.
 
“As unemployment, foreclosures rates and health care costs continue to rise, more
consumers are turning to bankruptcy as a last financial resort,” Gerdano stated in a news
release. Other bankruptcy experts agree with Gerdano’s assessment. In a story published
by the Washington Post in 2008, Harvard law professor Elizabeth Warren said, "The rise in
bankruptcies is not about something that happened last week or last month. It's about the
fundamentals. It's about declining wages, rising costs, inadequate health insurance, job
instability. More hardworking middle-class families simply can't make it in this economy,
and it's only getting worse."
 
When you are at the end of your rope, bankruptcy is a safety net. The federal bankruptcy
law provides powerful tools to forge a fresh start and a new financial future for your
family. Bankruptcy can protect the things that matter most to you like your home, auto,
and retirement accounts, while restructuring or eliminating your debt. No one wants to file
a bankruptcy, but if you are faced with serious financial difficulties, your best course of
action is to explore your financial options. A qualified bankruptcy attorney can explain
your options and help you decide the best choice for your family.

 

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Posted on July 28, 2009 by Bryan Fears

Top Ten Things Your Bankruptcy Attorney Hates To Hear

10.  "I know I told you that I only expected a small tax refund, but my
accountant says I'm getting back a large refund! Isn't that great?" No, its not.
Your attorney can protect your property, but unexpected large cash sums are difficult to
protect during a bankruptcy. Generally it is advisable to receive (and spend) your income
tax refund prior to filing your bankruptcy case.
 
9. "Before I came to see you I paid a debt counselor a lot of money." Individuals
can lose thousands in fraudulent debt counseling. While there are legitimate programs
that can obtain positive results, many are just plain scams and end up making matters
much worse for you and your family.
 
8. "I cashed out my retirement account and paid off my credit cards."
Retirement accounts are generally protectable assets in a bankruptcy and beyond the
reach of most creditors, while credit card debt is typically the easiest type to discharge.
 
7. "I paid off my car with my tax refund." Having too much equity in a vehicle
will result in payments to the bankruptcy trustee. In other words you first paid for your
car, and then you must pay the trustee for the non-exempt equity in the car. That means
you pay TWICE for the same car!
 
6. "I repaid a loan to a family member before coming to see you." Payments to a
family member prior to filing bankruptcy is a big mistakes. He or she may be forced to
turn over the payment to pay your creditors. Of course you want to pay your family
member, and you can certainly do so, but let a qualified professional help you do it the
right way.
 
5. "I transferred my house/car/etc. to my mother to protect it." Another
regrettable mistake. By trying to protect an asset without your attorney's help you could
actually strip any protection it might otherwise be entitled to.
 
4. "I took out a payday loan after our consultation to pay for the bankruptcy."
Incurring a debt with no intention to repay is not only non-dischargeable in bankruptcy, it
could land you in criminal trouble!
 
3. "I went on a shopping spree with my credit cards before I came to see you."
This seldom happens because most people have better common sense. As a general rule
the shopper will be paying that money back to the credit card company.
 
2. "I just got my chapter 7 discharge and I found out my grandmother left me a
large inheritance." This news is sad in many ways; not only is the loss of a loved one a
tragic event, but the bankruptcy court may order you to turn over the inheritance.
 
1. "I didn't tell my attorney this, but. . ." The worst news of all! Always answer
your attorney's questions honestly and completely. Hidden assets or transfers can
prevent you from receiving a bankruptcy discharge and may result in federal criminal
charges.

 

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Posted on July 27, 2009 by Bryan Fears

Auto Redemption in Chapter 7 Bankruptcy

During a Chapter 7 bankruptcy all unsecured debts are discharged. Debts that are
secured by collateral (e.g. car loans) must be paid or the collateral must be returned to the
lender. Occasionally an individual considering Chapter 7 bankruptcy will own a vehicle
that is worth less than what is owed. This situation is often referred to as “upside down”
and usually involves a late model vehicle that has depreciated faster than the person has
paid on the loan. It doesn'’t make any sense to pay for something that is “upside down,”
but often an individual needs to keep the vehicle for transportation to work and for family
use.
 
Fortunately, a provision of the Chapter 7 bankruptcy code allows an individual to keep a
vehicle and pay only its current market value. This process is called “redemption.”
During a redemption the value of the vehicle is determined (either by agreement between
the debtor and creditor or by the bankruptcy judge after a hearing) and a court order is
issued directing the creditor to accept a sum from the debtor in exchange for a release of
its lien. In plain terms the lender is paid a lump sum and the lien on the vehicle is
released. For example, a debtor that owes $15,000 on an auto that is worth $10,000 will
only pay $10,000.
 
Unfortunately, the payment must be made in a one-time lump sum to the lender at the
time of the redemption order. If the debtor is unable to pay for the vehicle, there are
finance companies that make redemption loans for debtors in bankruptcy. Before making
a redemption loan these finance companies require a loan application and certain
assurances of repayment. The interest rate can be high for a redemption loan, however
the resulting monthly payment is often lower than the original payment. It is important to
carefully consider all of the advantages and disadvantages before making a decision to
redeem a vehicle:
 
Advantages of a redemption loan:
 
• Retention of the vehicle;
• Vehicle is no longer “upside down;”
• The creditor cannot repossess the vehicle;
• Usually results in a lower monthly payment.
 
Disadvantages of a redemption loan:
 
• High interest rate.
 
Redemption is not the only option for keeping a vehicle after a bankruptcy. A skilled
bankruptcy attorney can explain all of your options and help you obtain the best deal for
your family.  Contact Fears | Nachawati today for a free consultation to discuss bankruptcy and auto redemption by calling toll free 1.866.705.7548 or via e-mail at info@fnlawfirm.com.  
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Posted on July 24, 2009 by Bryan Fears

Hit the Reset Button with Chapter 7 Bankruptcy

Just as the title implies, filing for Chapter 7 is like hitting the reset button on your favorite electronic device. Everything disappears. After your Chapter 7 is discharged, you end up erasing the debt that was once there. In order to qualify for a Chapter 7 bankruptcy in the Fort Worth/Dallas region, you must:

 

1.      File a Chapter 7 petition.

2.      Pay your filing fee to the court clerk. There are waivers available for some applicants.

3.      Take a credit-counseling course approved by the bankruptcy court within 6 months of filing for Chapter 7.

 

While the initial process seems simple enough, the petition contains many forms that require a strong understanding of bankruptcy law. The court clerk cannot help you fill

out the forms. Once the forms are filled out appropriately and submitted to the bankruptcy court, an automatic stay is put in place that will immediately halt all collections efforts from creditors. This mean they will no longer be able to make harassing phone calls or place liens on your assets. In some cases, liens already in place can also be reversed.

 

Once your Chapter 7 bankruptcy is discharged, you are basically starting over with a clean slate. The debts are erased and you will no longer be held liable to pay them.

 

For more detailed information how Chapter 7 can help you start over debt free, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com. 

 

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Posted on July 23, 2009 by Bryan Fears

Can I Get Rid Of IRS Debt Through A Chapter 13 Bankruptcy?

The answer to that question is yes and no. Yes, the IRS is going to be more flexible regarding your past due tax debt when you file for Chapter 13. They will base their compromise on two factors, either doubtful liability (you don't owe that much tax) or doubtful collection (you don't have resources or assets to pay the tax you owe). 

As for the no part of the answer, this does not mean that you are completely off the hook if you file for a Chapter 13, but a Chapter13 will stop any liens by the IRS on your assets such as your home, bank account or your paycheck. When you file for bankruptcy in Dallas, the IRS becomes just another creditor in your Chapter 13 bankruptcy. Their objections to the repayment plan proposed in your Chapter 13 plan are limited to the same grounds as any other creditor. 

Most of the time the IRS welcomes a Chapter 13 filing since the priority taxes get paid in full with little expenditure of time and energy by the IRS. It all comes down to the fact that the IRS would rather get something than nothing.

If you are facing IRS debt issues, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or via e-mail at info@fnlawfirm.com for a free bankruptcy consultation.

 

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Posted on July 22, 2009 by Bryan Fears

Are Payday Loans Dischargeable?

Yes, payday loans are considered creditors that can be added to a Chapter 7 bankruptcy petition. They will be discharged along with all your other debts.

 

Unfortunately, many people are not aware of this and do not include the payday loans in their petition due to intimidation tactics used by payday loan companies. Some of the tactics these companies use start way before a bankruptcy is anticipated. They will add a clause in the contract you originally signed that prohibits you from including them in a bankruptcy. But be assured that you are able to put your payday loan on a bankruptcy and that this is a clause that cannot actually be enforced by a payday loan company. Payday loan companies put that clause in a contract because they are insistent that you pay back the loan plus the exuberant interest rate they charge. This is how they make their money.

 

Make sure you consult with an experienced, highly skilled bankruptcy attorney regarding payday loan issues in your bankruptcy. For a free consultation, contact Dallas bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or info@fnlawfirm.com. 

 

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Posted on July 21, 2009 by Bryan Fears

Honest People Can Face Overwhelming Medical Expenses

Famed songwriter Bruce Springsteen complained in his song Atlantic City, “I got debts that no honest man can pay.” For many honest people debt can come suddenly through no fault of your own.

A recent report in the American Journal of Medicine states that medical bills contributed to more than 60 percent of U.S. personal bankruptcies. This study conducted by a team from Harvard Law School, Harvard Medical School and Ohio University found that more than 75 percent of these bankrupt filers had some form of health insurance and were "solidly middle class” - two-thirds were homeowners and three-fifths had gone to college. In many cases unemployment issues also accompanied the medical expenses. For some, that inability to work also meant the loss of employer-based health insurance.

Even families that were considered “well-insured” had to cope with high deductibles and uncovered expenses. Medical expenses for families with private insurance averaged $17,749, compared to $26,971 in medical debt for those uninsured, and $22,568 for those who initially had insurance coverage, but lost it at some point after the illness.

"Our findings are frightening. Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy," said lead author Dr. David Himmelstein, an associate professor of medicine at Harvard Medical School.

Medical expenses can easily spiral out of control and result in lawsuits, wage garnishments, and property attachment and seizure. Compounding the problem are many fallacies and half-truths being passed around, like: “The hospital can’t sue if you pay them $10 per month.” or “I’m liable for my spouse’s medical bills.” If you are facing medical bills that you cannot pay, consult an attorney and investigate your legal rights. Only an attorney can explain your legal rights and help you navigate a path to recovery.

You can read the free full article from the American Journal of Medicine at http://www.amjmed.com/webfiles/images/journals/ajm/AJMMedicalBankruptcyJun09FINAL2.pdf

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Posted on July 20, 2009 by Bryan Fears

How Chapter 7 Bankruptcy Can Help Eliminate IRS Tax Debts

You may have heard the hype from firms claiming they can reduce all of your IRS tax debt for pennies on the dollar. The reality is that most taxes can't be eliminated, but some can. But it is not as easy as it sounds. One legal and reliable way is to file for a Chapter 7 bankruptcy. Once you apply for bankruptcy, you must then pass a series of steps to see if you can discharge IRS tax debts under Chapter 7. Basically you can discharge an IRS tax debt if you meet all of the following conditions:

·         The taxes are only income taxes.

·         You did not commit fraud.

·         You did not commit willful evasion.

·         You filed a tax return.

·         The debt must be at least three years old.

·         You pass the "240-day rule."

 

As you can see the discharge of an IRS debt is not as simple or easy as some may lead you to believe. It is advisable to speak with an attorney experienced in bankruptcy law and you can by contacting Fears | Nachawati toll free at 1.866.705.7584 for a free bankruptcy consultation.

 

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Posted on July 19, 2009 by Bryan Fears

Fort Worth Homeowners: You Can Avoid Foreclosures!

Despite some of the reports on the Internet that foreclosures in the Fort Worth area are declining, the rates are still considerably higher than they were last year. There can be many reasons why there is a lull in foreclosures. It could mean that the mortgage companies are overwhelmed with paperwork and are forced to sit on homes that are in pending foreclosures. This of course does not mean that they will not foreclose, but rather that they will eventually get around to it.

 

If you are facing foreclosure and cannot negotiate a reasonable repayment plan with your mortgage lender, it may be wise to consider filing for a Chapter 13 bankruptcy. When you file for bankruptcy, you will stop the sale of your home and have the opportunity to repay the arrears. Additionally, you may even be able to exclude a second mortgage that in turn can save you thousands in mortgage payments.

 

If you are in danger of losing your home, filing for bankruptcy can be a very powerful solution for many homeowners as it can give you the time and resources to renegotiate your mortgage with your lender while saving your home.

 

For more details on how Chapter 13 can help you save your home contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or e-mail info@fnlawfirm.com for a free bankruptcy consultation.

 

 

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Posted on July 18, 2009 by Bryan Fears

Obama's Credit Card Regulations

On May 22, 2009, President Barack Obama signed the Credit Card Accountability, Responsibility and Disclosure Act.  This new legislation is intended to reform how

credit card companies deal with its customers. According to the White House,

”Just for starters, it bans unfair rate increases, prevents unfair fee traps, requires plain language in plain sight for disclosures, increases accountability all around, and institutes protections for students and young people.”

And while this is definitely a step in the right direction, it does not protect consumers who are in serious credit card debt at this moment. Most people are weighing basic necessities over paying a credit card bill. Even if you once had the recommended 6-month savings in your bank account, we have been in recession far longer than that.

In the meantime, the credit card bills continue to come, with late and over the limit fees for some. As a result, the bill does not get paid and the harassing phone calls and threats from the credit card companies begin to occur. If this is the case, filing for bankruptcy may be a good resolution to your credit card problems. It will help give you a fresh start and stop any collection actions by the credit card companies against your assets or paycheck.

If you are looking for a step in the right direction, contact bankruptcy law firm, Fears | Nachawati, toll free at 1.866.705.7584 or by e-mail at info@fnlawfirm.com 'for a free bankruptcy consultation.

 

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Posted on July 17, 2009 by Bryan Fears

You Can Afford Bankruptcy In Dallas!

Dallas bankruptcy filing rates are far more affordable than most people think. In fact, filing for bankruptcy can save you money on your mortgage and reduce the debt owed to creditors. For example, when you file for bankruptcy in Dallas or Fort Worth (Northern District of Texas), the filing fees for a Chapter 7 and 13 are $299 and $274, respectively.

When you file for bankruptcy in Dallas and pay the filing fees your application will be reviewed by the bankruptcy court and all action by creditors will stop immediately. That means that all harassing calls and liens by creditors must end. Creditors are very well aware of the penalties they face if they continue to take action against you after they have been notified that you have filed for bankruptcy.

Filing for bankruptcy can be a very powerful solution to those in debt as it gives the time and resources to renegotiate your mortgage and other debts with your creditors while saving your home and avoiding liens on your paycheck or bank account.

For a free bankruptcy consultation contact Dallas bankruptcy law firm, Fears | Nachawati, via toll free at 1-866-705-7584 or via e-mail at info@fnlawfirm.com.

 

 

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Posted on July 2, 2009 by Bryan Fears

Stop Being Bullied by Debt Collectors

Debt collectors can be relentless in their pursuit to collect on past due bills.  The following are some tips on how to avoid being bullied by collecting agencies.  These tips were published in an article in the Dallas Morning News that can be found here. 

1.  Do not ignore the collector's calls or written communication. 

2.  Make the collector prove that you owe the debt.

3.  If a collector calls regarding a bill that has already been paid then provide proof to the collecting agency the account is already settled and paid.

4.  Do not tolerate abusive debt collectors who make threats, use foul language or repeatedly call. 

5.  Take action by submitting written notice to debt collectors to cease communication if collection calls become over the top. 

By taking these steps hopefully you can work out a plan to resolve your debt with the collection agencies in a swift manner.  If however you feel you have taken the above action and still feel stressed from collection calls and cannot seem to get caught up on your bills then you may want to speak with an Attorney regarding your options.  If so, contact Fears | Nachawati toll free at 1-866-705-7584 or via e-mail at info@fnlawfirm.com. 

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