Best Bankruptcy Lawyer Las Vegas

The federal bankruptcy laws promise a fresh financial start for the honest but unfortunate debtor. Bankruptcy balances the interests of the debtor to obtain his fresh start and the interests of the creditor to see that the debtor pays whatever he can afford. In some circumstances the debtor can complicate his bankruptcy case before he files.

Mistake #1: Paying an Insider Creditor

The bankruptcy laws attempt to ensure that all creditors receive fair treatment during the bankruptcy process. One concern is that the debtor will pay loans to family or friends before filing bankruptcy, and therefore deprive other creditors from receiving payment. Family, friends, business partners, and other creditors who have close relationships with the debtor are called “insider creditors” and transfers to insider creditors can be avoided by the bankruptcy trustee if the transfer occurred within one year before the bankruptcy filing. For instance, if you gave your mother $1,000 from your income tax refund as payment for a debt, and then filed bankruptcy two months later, the bankruptcy trustee can sue your mother to recover the $1,000. To make matters worse, often the debtor could have protected the cash money during the bankruptcy and paid the debt without difficulty after the case was filed.

Mistake #2: Incurring Debt After Deciding to File

Some people decide to charge up credit cards or take payday loans just before filing bankruptcy. If you have decided to file bankruptcy, do not incur additional debt. Taking loans with no intention to repay the creditor could be fraud. It could also be a criminal act.

Mistake #3: Transferring Property

Some people fear that they will lose property when they file bankruptcy. Some will give away or sell property to avoid losing it. In most cases your bankruptcy attorney can protect your property and you will not lose anything. However, once you have transferred an item it is no longer eligible for legal protections. For instance, a car worth $2,000 is likely entirely protected from turnover during your bankruptcy. If you transfer title of this vehicle to your brother before the bankruptcy, the trustee can avoid the transfer, take the car, and sell it to pay your creditors.

Mistake #4: Cashing out Retirement

Most retirement accounts are entirely protected during bankruptcy. Unfortunately, some people are unaware of these broad protections and cash out their retirement savings out of fear that it will be taken during the bankruptcy. Sometimes the money is spent to pay off loans which can create preference issues. In other cases the debtor converts an exempt asset (retirement funds) to a non-exempt asset (e.g. a paid off car).

Mistake #5: Failing to Be Honest

This is the worst mistake of all because the bankruptcy laws do not protect a dishonest debtor. Failure to truthfully list all of your assets, debts, income and expenses is grounds for dismissal of your case, or you may have to answer allegations of bankruptcy fraud (a federal crime).

If you are experiencing financial difficulty and are considering bankruptcy, discuss your case with an experienced bankruptcy attorney. The bankruptcy attorneys at Haines and Krieger can advise you on the best actions to take before bankruptcy and how to avoid common mistakes. Contact us today for a free consultation and use the federal bankruptcy laws to protect your property in Las Vegas.

There are generally two types of “bad checks.” The first type is the kind that is “payable on demand” meaning that it is expected that the bank will honor the check when it is presented. This is the most common type of bad check. When you write a check that the recipient believes is “payable on demand,” and the check is returned for Non-Sufficient Funds (NSF), you may have committed a criminal act. Depending on the amount of the bad check written, a person can be prosecuted for a misdemeanor or a felony. Even if you later make payment on the check there may be criminal charges or substantial fees and/or fines.

A NSF “payable on demand” check is not dischargeable in bankruptcy and bankruptcy will not exonerate you of a criminal act. The bankruptcy automatic stay does not apply to stop criminal prosecutions. Likewise, any debt to the victim of the bad check is now considered criminal restitution, also not dischargeable in bankruptcy. Any restitution, costs, and fines are not discharged by the bankruptcy.

While criminal prosecution of a bad check case is not affected by your bankruptcy, private collection is stopped by your bankruptcy. Any civil legal action concerning a bad check must stop, and any civil garnishment or other collection action must cease.

The second type of bad check is the post-dated check. These checks include payday loans and other checks that are essentially promises to pay in the future. You and the receiver are aware that the check is not presently negotiable. The bank will not pay the check because you don’t presently have the money in your account.

With a few narrow exceptions, being unable to pay a post-dated check is not a criminal act. However, it may be a crime to write a post-dated check that you intend to include in your bankruptcy. Typically the recipient of the post-dated check would have to file an adversary case with the bankruptcy court and prove that you committed fraud in writing the check with no intention to ever pay it.

If you have outstanding bad checks and are considering bankruptcy, discuss your situation with an experienced bankruptcy attorney. The attorneys at Haines and Krieger can advise you on the best way to deal with a bad check during your bankruptcy.  Contact us today for a free consultation.

The automatic stay is a powerful bankruptcy protection that immediately stops nearly all creditor action against a debtor. The automatic stay is a temporary injunction against debt collection and is meant to give the debtor a “breathing spell” from his creditors. The automatic stay permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy.

This protection is immediate and “automatic” upon filing a bankruptcy petition - no hearing is necessary. The stay is a legal injunction ordered by the bankruptcy court that prohibits a creditor with a claim that arose before commencement of the bankruptcy case from taking many actions, including:

• contacting the debtor to request payment (stops collection calls)
• initiating or continuing a lawsuit against the debtor (stops lawsuits)
• enforcing a judgment against the debtor (stops wage garnishments)
• repossessing personal property or foreclosing on real estate (stops repossessions and foreclosure)

While the automatic stay is immediate, it is not permanent. The stay can be contested by a creditor and lifted by the bankruptcy court after notice and a hearing. There are also a few exceptions to the automatic stay protections, for instance: the automatic stay does not prevent criminal prosecution. Likewise the automatic stay does not stop lawsuits to establish or modify alimony, maintenance, or support.

Individuals that file for bankruptcy receive this powerful legal injunction against creditor actions. However, the automatic stay is just one weapon in your bankruptcy attorney’s arsenal. Your attorney can use the power of the bankruptcy laws to help you make the best decisions for your family’s future financial health. If you are struggling with debt, consult with one of the experienced bankruptcy attorneys at Haines and Krieger and learn how the federal bankruptcy laws can help you. Contact us for a free consultation today.

When a bankruptcy debtor inherits money from someone who dies within 180 days of the date the debtor filed bankruptcy that money becomes part of the debtor’s bankruptcy estate. The inherited money that becomes part of the bankruptcy estate is used to pay your creditors. This is true even if you have received a discharge and your Chapter 7 bankruptcy case has closed. 

For instance, if you file a Chapter 7 bankruptcy on April 1, and your great aunt dies on September 28 (within 180 days of the bankruptcy filing date), any money you receive from your great aunt’s estate must be turned over to the bankruptcy trustee. It does not matter when you receive the money or when your case was discharged. You might receive the inheritance years later, and it must be turned over to the bankruptcy trustee for payment to creditors. You may be charged with bankruptcy fraud (a federal crime) if you fail to inform the trustee of your inheritance or turn over the money.

If the trustee receives inherited money, your case will be reopened and a bankruptcy estate is formed. Notices to creditors are sent and the trustee will distribute the funds to creditors. In some cases you will be able to keep some of the money, and in other cases some of the funds may be returned. 

Inherited property is treated the same as cash. If you receive a car or a family heirloom, the property must be turned over to the trustee. In some cases you may be able to exempt inherited property or the trustee may consider the value of the inheritance too small or burdensome to liquidate and distribute.

If you are considering bankruptcy and are aware of a significant chance of someone leaving you inheritance money, speak with your attorney. There are options to avoid turnover including rewriting the will to cut you out, or setting up a spendthrift trust. A spendthrift trust cannot be reached by creditors. Consult with an attorney to properly create a spendthrift trust or rewrite a will. There is nothing illegal or immoral about estate planning and your loved one may prefer leaving money to you rather than your creditors.  Contact Haines and Krieger today for a free consultation.

Just because a relative is older and living on a fixed income in Nevada does not mean that he or she is also debt-free. Many of Nevada's elderly struggle each month to pay unsecured debts from very modest incomes. The most common forms of unsecured debts are credit cards and medical expenses, and for many of our elderly even a small unsecure debt can be a big financial complication. Some face the difficult decision to cut back on food, prescription medicine, or home utilities in order to make minimum payments on these debts.

Many of our elderly try to avoid bankruptcy because they believe that they can pay their obligations with minimum monthly payments. The unfortunate truth is that it takes many years to pay off even a small high interest debt with minimum monthly payments. In the meantime a changed interest rate and annual fees can cause that minimum payment to increase. Additionally, forgotten payments can lead to creditor harassment or lawsuits which can result in a real estate judgment lien and/or an asset seizure.

Discussing personal bankruptcy with an older loved one can be difficult. In many cases there is great concern over losing property or income. The federal bankruptcy laws have changed significantly over the past fifty years and offer great protections for the elderly. For instance, retirement income and social security are protected from creditor garnishment during bankruptcy. In most cases all of the bankruptcy debtor’s property is exempt from turnover; however your bankruptcy attorney can discuss any property that may be at risk. The bankruptcy laws offer many options for retaining property and discharging debts. After the typical case the unsecured debts are discharged and there is more money available to pay necessary living expenses.

Another common concern is the embarrassment of bankruptcy. A personal bankruptcy can is usually a very private legal process. Friends and family are not contacted and bankruptcy cases are not published in the newspaper. Only creditors and co-debtors receive notice of a personal bankruptcy.  

If an older Nevada relative is struggling with debt, discuss the situation with one of the experienced bankruptcy attorneys at Haines and Krieger. The federal bankruptcy laws contain many protections that shield the assets and incomes of the elderly while discharging burdensome creditors. Don’t let the stress of credit cards and medical bills tarnish your loved one’s golden years.  Contact Haines and Krieger today for a free consultation.

There are a surprising number of options for Nevada debtors to retain possession of vehicles during bankruptcy. Choosing the best option depends on several factors including your ability to pay and the condition of your vehicle. In some cases the best financial option is to surrender your vehicle back to the bank and purchase a different one. 

Years ago it was unheard of for a debtor in an active bankruptcy to obtain an auto loan. Several years ago two companies, 722 Redemption Funding, and Fresh Start Loan Corporation, began making auto loans to debtors in bankruptcy, and now many banks have lending programs for debtors. The attitude towards bankruptcy has changed and many debtors are evaluated more on their future ability to pay the loan rather than their past financial trouble.

Obtaining an auto loan during bankruptcy is a matter of showing stable income, a good debt-to-income ratio, and some assurance that your current financial trouble is unusual and not likely to reoccur. All lenders require a loan application and the criteria for approval can vary significantly. Some lenders will not approve a loan if you have had a prior repossession. Other lenders want a substantial down payment. New auto loans often want the bankruptcy discharged before approving the loan. In all cases your vehicle choice will be restricted to a newer vehicle with low miles.

During a Chapter 7 bankruptcy the debtor and the lender are free to negotiate terms outside of the bankruptcy case. The loan is not a part of the case and is not affected by the bankruptcy discharge. For Chapter 13 debtors, any new indebtedness must be approved by the trustee and the court. In most cases the Chapter 13 debtor can obtain approval after a showing of need and ability to pay.

If you are considering bankruptcy and need to buy a different vehicle, consult with an experienced attorney at Haines and Krieger. There are many different options for Nevada debtors during bankruptcy for retaining, refinancing, or purchasing a different vehicle. Contact us today for a free consultation and get the information you need to drive your financial future.  

Almost all Nevada debtors in bankruptcy are honest people who have experienced great financial difficulty. One of the most common questions asked by debtors is, “Do I need to list a creditor I intend to repay?”

The answer to this question is very simple: “Yes!” You must list all of your debts and each of your creditors, even those you intend to repay. There are two ways to repay a debt after bankruptcy. The first is by voluntary payment. The second is with a reaffirmation agreement.

Voluntary payments made after your bankruptcy discharge neither create a new legal obligation nor invalidate the discharge order. Any payment you make on a discharged debt is the result of a moral obligation since the legal obligation to pay the debt has been discharged by the bankruptcy court. The creditor is still prohibited from contacting you or trying to collect on the debt.

A reaffirmation agreement is a new contract between you and your creditor. It is fully enforceable after the bankruptcy, so if you default on the obligation the creditor can sue you and repossess any property securing the agreement. Reaffirmation agreements are commonly used to continue auto and home loans. The debtor agrees to continue the legal obligation to pay the loan, and the lender agrees to not repossess the collateral. 

Reaffirmation agreements are only available to Chapter 7 debtors and the agreement must be executed before the bankruptcy discharge is entered. The debtor can revoke the agreement with 60 days after the agreement is signed. The Bankruptcy Code requires that the debtor demonstrate that the paying a reaffirmed debt will not create an undue hardship for the debtor or the debtor's family. While a reaffirmation agreement can be used for credit card agreements and other unsecured loans, bankruptcy courts are reluctant to approve these agreements without exceptional circumstances.

You are free to continue to pay a debt after your bankruptcy. Congress specified in the Bankruptcy Code that “Nothing contained in. . . this section prevents a debtor from voluntarily repaying any debt.” There are several legal options for repaying a debt after bankruptcy, as well as several avenues for debt restructuring. Discuss your specific situation with the experienced bankruptcy attorneys at Haines and Krieger and discover your options.  Contact us today for a free consultation. 

During a Chapter 13 bankruptcy you pay your creditors in accordance with your ability to pay.  Some creditors receive 100% of the debt, and others may receive a small sum or nothing at all.  The Bankruptcy Code establishes a priority of debt repayment.

Administrative claims must be paid 100% and include your filing fee, the trustee’s compensation (3% to 10% of each monthly payment), and your attorney’s fees.  Other debts must be paid 100% during the debtor’s bankruptcy including alimony and child support, most tax debts, and mortgage arrears if you intend to keep you home.

The lowest category of debt repayment is unsecured creditors.  The amount paid to unsecured creditors (e.g. medical bills, credit cards, and unsecured personal loans) is determined by several factors including (1) the amount of your nonexempt assets; (2) your disposable income; and (3) the length of your plan.

The length of your plan and amount of your disposable income are largely determined by the Bankruptcy Means Test.  The Means Test was the subject of a recent United States Supreme Court case: Hamilton, Chapter 13 Trustee v. Lanning.  The issue in Hamilton is how a bankruptcy court calculates your ability to pay creditors during the bankruptcy case.

The 2005 changes to the Bankruptcy Code included a requirement that Chapter 13 debtors commit all "projected disposable income" to the repayment plan.  Confusion arose over whether Congress meant to determine this amount through a mechanical approach, by averaging the debtor's income for the past six months, or whether the determination is “forward looking” and should consider the debtor’s future ability to pay.

Justice Samuel Alito, writing for an 8-1 majority, said the “forward looking” approach is correct.  The forward-looking approach starts with the debtor's average monthly disposable income for the past six months multiplied by the number of months in a debtor's plan.  This figure is ordinarily the debtor's projected disposable income.  However, in some cases, the Court has authority to review the debtor's actual and present monthly income in order to calculate the debtor’s ability to pay debts during the plan period.

The Hamilton case will have great impact on Chapter 13 bankruptcy cases and places the power to determine a fair and affordable Chapter 13 payment plan in the hands of the bankruptcy court judges.  If you are in need of bankruptcy relief, but fear that you will be forced to pay a monthly sum you can’t afford, get the facts from the experienced bankruptcy attorneys at Haines and Krieger.  Bankruptcy is not a debtor’s prison and has helped millions get a fresh financial start. Contact us today for a free consultation.

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 Haines and Krieger for a free consultation. 

The federal bankruptcy code states that a debtor may obtain a discharge of a government-sponsored student loan only if repaying the loan would impose an “undue hardship” on the debtor and his dependents. Most bankruptcy courts interpret “undue hardship” as meaning that the debtor cannot repay the loan and maintain a minimal standard of living. As a result of this very high bar, it is rare that a student loan is discharged during bankruptcy.

Consequently, many bankruptcy debtors are caught in a student loan trap of being unable to pay on the student loan and the interest continues to accrue. While discharging the student loan may not be possible, there are options for dealing with a student loan during and after bankruptcy.

First, the student loan lender or collection agency is strictly forbidden from engaging in any collection action during the bankruptcy. This protection (known as the “automatic stay”) may last from a few months during a Chapter 7 to several years during a Chapter 13 repayment plan. Interest may continue to accrue and will be tacked-on at the end of the bankruptcy case.

Second, if the student loan was not defaulted prior to the bankruptcy filing (meaning no payment for more than 270 days), the account will usually be re-aged and is considered current upon the conclusion of the bankruptcy case. This is a good time to negotiate with the lender for a payment plan you can afford. If the student loan was defaulted prior to the bankruptcy, the lender may offer a loan rehabilitation program.

Finally, your student loan lender has many repayment options after your bankruptcy case ends, including the Income Based Repayment Plan which limits your loan repayment to 15% of your income and offers loan forgiveness after 25 years of repayment (or 10 years for public service employees). 

If you are struggling with student loan debt, speak to the experienced bankruptcy attorneys at Haines and Krieger and discuss your options. Your attorney can explain the many ways for dealing with student loan debt and can help you decide on a course of action that is best for you and your family.  Contact us for a free consultation.

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 mistake. 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 lose 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 a non-dischargeable debt 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.

One of the most common and important questions asked by a client during the initial bankruptcy consultation is, “Can I keep my house?” 

The happy answer is, “Yes.” However, every client’s case is different and requires a skilled and experience attorney to evaluate your situation and help you choose the appropriate debt relief process.

The first question is whether there is equity in your home. Every state allows the debtor to exempt home equity from creditors during bankruptcy. Home equity is simply the difference between the amount that is owed and what the property is worth. If you have more equity in your home than can be exempted, you may need to consider either a Chapter 13 repayment plan or a non-bankruptcy option for debt repayment. In a Chapter 13 the debtor pays the amount equal to the non-exempt home equity to unsecured creditors (like credit cards and medical bills) over a three to five year period. If Chapter 13 is not a feasible option, the debtor may want to consider borrowing against the home equity to pay unsecured creditors.

The second issue is whether you can afford to keep the home by making the monthly payments. A home mortgage is a secured debt which must be paid or you must surrender the property back to the mortgage holder. When circumstances have changed and you can no loner afford to keep your home, the bankruptcy laws can help you to leave on your terms without any lingering debt.

In some cases a third issue is present: the debt is more than the value of the house. In those cases bankruptcy may help either through lien stripping an entirely unsecured second mortgage, or by encouraging the mortgage holder to negotiate for a modification and reduction in principle. Typically the mortgage holder does not want your property, and is usually willing to discuss payment options once a bankruptcy case is filed.

Finally, some debtors are facing foreclosure from an uncooperative mortgage holder. A Chapter 13 bankruptcy can be used to force the mortgage holder to accept payments that cure mortgage arrears over three to five years.

There are many options available for saving your home. The attorneys at Haines and krieger can discuss the pros and cons of each and help you decide which option is best for your family. Use the federal law to your advantage and discover how the bankruptcy laws can help you keep your home.  Contact us for a free consultation today.

Around the country courts are questioning the standing of MERS to assert legal rights in foreclosure or bankruptcy proceedings. Many courts are finding that Mortgage Electronic Registration System, or “MERS,” is not a legal mortgage holder for lenders, investors and their loan servicers, and are invalidating bankruptcy claims or foreclosure processes.

On its website MERS describes itself:

MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.

Since the mortgage bubble burst, MERS has come under increasing attack in state and federal courts. Some courts (most notably in Kansas, Florida, and New York) have found that MERS does not have standing to assert mortgage rights because it is a mere nominee, and not a mortgage assignee (an assignment of a mortgage without the debt transfers nothing. 55 Am. Jur. 2d, Mortgages § 1002). Additionally, MERS routinely skips legally required processes when a mortgage is transferred.

MERS is not the beneficiary of a Deed of Trust, and has no ownership or possession of a promissory note. Therefore, many courts are finding noncompliance with state laws. Recently one bankruptcy court in the State of New York invalidated a bankruptcy claim by MERS when the company could not show how it had standing in the case.

Many bankruptcy attorneys are demanding proof of assignment and documents establishing a paper trail for their client’s mortgage. In many cases MERS is unable to provide this information; much like collection companies often cannot prove a debt. Original documents, recorded deeds, payment history, and executed assignments seem to be inconsequential matters to the MERS powerhouse. Fortunately, MERS is now under attack and accused of not following legal processes. It will be very interesting to see how the state and federal appellate courts address the MERS debacle.

If you are dealing with an uncooperative mortgage company and need assistance saving your home, speak with an experienced bankruptcy attorney and discuss your options. There are many legal options available. Let Haines and Krieger help you determine the best choice for your family.  Contact us today for a free consultation.

In some cases a debtor has no money, no job, and no assets. Lawyers commonly refer to this situation as being “judgment proof.” Any attempts to collect on a debt will be futile. As the saying goes, “You can’t get blood out of a turnip.”

While an entirely insolvent and judgment proof individual may avoid creditor collection, many people without money, jobs, or assets receive periodic federal benefits like Social Security. The federal law prohibits most creditors from garnishing federal benefits making the individual “legally” judgment proof.

Debt collectors will occasionally circumvent the federal prohibition by seizing the debtor’s bank account through a state court order. After a judge orders the seizure of a bank account to satisfy a judgment it is the debtor’s obligation to prove that the funds are federally protected. This generally requires hiring an attorney and holding a hearing in the state court. For more information, visit the Federal Trade Commission website for a free publication about bank seizure of federal benefits.

To close this legal loophole, the Obama administration has recently proposed rules to protect federal benefits from creditor garnishment. These proposed rules require banks to determine whether federal benefits have been directly deposited into a customer’s account within the past 60 days, and to determine the amount, before collecting funds pursuant to a court order. More than 80 percent of Social Security recipients receive their monthly benefits via direct deposit. 

Many federal benefits are protected during bankruptcy.  For a legally judgment proof debtor, a bankruptcy will end creditor harassment, prevent a bank account seizure, and discharge the debt for good. A bankruptcy can provide peace of mind.

If you receive federal benefits and have outstanding debts, consult with an experienced bankruptcy attorney. Haines and Krieger can advise you on the best course of action to resolve the debt and protect your federal benefits.  Contact us today for a free consultation.

A bank account debt can offer many challenges to an individual in bankruptcy. Usually a bank account debt originates from fees associated with an overdrawn account. These fees can quickly accumulate and result in a debt of hundreds of dollars. A bankruptcy will generally discharge this debt, assuming the debt was not incurred by fraud or criminal activity. However, the issue is often should you discharge your bank account debt rather than can it be discharged.

In deciding whether to discharge a bank account debt, you must determine if repayment is feasible. In cases where the debt is small, the account is still open, and you have the resources to pay the debt, repaying the debt is generally the best option. Remember to consult with your attorney before repaying any debt prior to filing bankruptcy. In many cases it is advantageous to wait until after the case is filed before repaying a debt.

If paying the bank account debt is not feasible, you may face several negative consequences. First, the bank will close your bank account. Second, over eighty percent of all banks use Chexsystems, a consumer reporting agency that provides information regarding accounts at banking institutions. Negative information may remain on your Chexsystems file for five years. To view your Chexsystems report for free, visit: https://www.consumerdebit.com/consumerinfo/us/en/chexsystems/report/index.htm

While a bankruptcy will discharge a bank account debt, factual information concerning the debt will remain on your Chexsystems report after the bankruptcy. This information is available to financial institutions and may prevent you from opening another bank account. 

Fortunately, there are programs available to an individual with a derogatory Chexsystems report offered by banks, universities, and not for profit groups. One of the most popular is the “Get Checking” program offered by several groups around the country. The University of Missouri Extension offers a typical “Get Checking” program, which requires a debtor to pay all outstanding bank fees on the prior bank account and take a six-hour checking education class. The debtor then receives a certificate of completion which can be used to open a new account at a participating financial institution. If ChexSystems reports suspicion of fraud on a prior account, a certificate will not be issued and institutions are not required to open an account.

If you have an overdrawn bank account and are considering bankruptcy, discuss your financial situation with an experienced bankruptcy attorney. There are many options to deal with bank account debt, but the situation can only grow worse from procrastination. Contact the attorneys at Haines and Krieger today for a free consultation.

The bankruptcy means test is a calculation designed to identify debtors who can afford to pay some of their unsecured debts (for instance, credit card debt) and encourage repayment of these debts through a Chapter 13 repayment plan.  The first part of the means test determines whether your current monthly income is less than your state’s median income for a household of your size. 

If your family’s income is less than your state’s median income for a family of your size, you PASS the means test. There is no other testing and you can proceed with a Chapter 7 bankruptcy. The current state median income figures can be found at the U.S. Trustee’s website: http://www.usdoj.gov/ust/eo/bapcpa/meanstesting.htm.

If your family’s income is more than your state’s median income, you must complete the means test worksheet to calculate if you have (or should have) money to repay unsecured creditors. In the end if you are able to pay a significant portion of your unsecured debt, you will FAIL the means test and cannot file a Chapter 7 bankruptcy.

The truth is that most debtors pass the means test without any difficulty based upon their income. Others pass the means test after a skilled bankruptcy attorney has examined your income sources and made certain elections in completing the calculation. That is not to say that the test can be manipulated! On the contrary, the skilled bankruptcy attorney will work within the bankruptcy statutes, rules, case law, and local interpretations (which can vary a great deal among jurisdictions!) to obtain the best result from the means test. 

If you would like to “test-drive” the means test, Nolo Publishing has a free on-line calculator. The Nolo calculator uses the language and formatting of Official Form B 22A, the means test form required in Chapter 7 bankruptcy cases. Be warned: passing the means test can be complex and is more than simply crunching numbers!

If you have questions or concerns about passing the means test, seek out competent legal advice. The experienced bankruptcy attorneys at Haines and Krieger can guide you through the means test to reach the best possible result for your circumstances.  Contact us for a Free Consultation.

In an episode of television’s “The Office,” the main character Michael Scott makes a misguided attempt to resolve his debt problems by publically stating, “I. . . declare. . . bankruptcy!” Video clips of this funny episode can be found on YouTube.

Back in the real world, declaring bankruptcy is not nearly as public, or as simple, as shouting out “I declare bankruptcy!” The bankruptcy process begins with an accounting of your income, expenses, assets, and debts. The debtor is required to use approved forms for this financial accounting. A copy of these forms can be found on the U.S. Courts website, and a general description of each form that must be filed in all consumer debtor Chapter 7 and 13 cases is provided below.

The Voluntary Petition is three pages long and is the formal declaration of bankruptcy. Filing the Voluntary Petition begins the bankruptcy process and imposes the automatic stay which will generally stop action by creditors to collect debts.

Schedule A is a list of real property.

Schedule B is a list of personal property.

Schedule C is a list of property the debtor claims as exempt.

Schedule D is a list of creditors holding secured claims.

Schedule E is a list of creditors holding unsecured priority claims.

Schedule F is a list of creditors holding unsecured nonpriority claims.

Schedule G is a list of the debtor’s executory contracts and unexpired leases.

Schedule H is a list of codebtors in the bankruptcy.

Schedule I lists the debtor’s monthly income.

Schedule J lists the debtor’s monthly expenses.

The debtor must sign a Declaration that the above schedules are accurate to the best of his or her knowledge, information, and belief.

The debtor must file a Statement of Financial Affairs. This form provides a summary of the debtor's financial history, transactions, and operations over certain time periods before the case is filed. There are 18 separate items on this form:
 

1. Income from Employment or Operation of Business
2. Income Other than from Employment or Operation of Business
3. Payments to Creditors
4. Suits, Administrative Proceedings, Executions, Garnishments, and Attachments
5. Repossessions, Foreclosures, and Returns
6. Assignments and Receiverships
7. Gifts
8. Losses
9. Payments Related to Debt Counseling or Bankruptcy
10.   Other Transfers
11.   Closed Financial Accounts
12.   Safe Deposit Boxes
13.   Setoffs
14.   Property Held for Another Person
15.   Prior Address of Debtor
16.   Spouses and Former Spouses
17.   Environmental Information
18.   Nature, Location, and Name of Business

Finally, the debtor must file either a Statement of Current Monthly Income and Means Test Calculation in a Chapter 7 case, or a Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income in a Chapter 13 case.

The success of your bankruptcy largely depends on the accuracy of these forms and the skill that your bankruptcy attorney applies in crafting these financial reports. Don’t leave your financial future to chance! Let Haines and Krieger help you with your financial problems and advise you on the best course of action.  Contact us today for a free consultation.
 

Happy April from Haines & Krieger’s Las Vegas Foreclosure Round-Up, where we look at the latest Las Vegas foreclosure news:

1.     New HAFA Guidelines Help Performance Marketing America Provide Hope for Short Sales in Las Vegas (PR-USA.net)

This April 5^th, the federal government’s Home Affordable Foreclosure Alternatives (HAFA) goes into effect.  These guidelines accelerate the short sale process for debtors’ principal residences with mortgages predating 2009. 

Comment:  It's worth mentioning that Haines & Krieger has substantial experience helping Las Vegas homeowners with short sales and is well prepared to continue to help with the newly streamlined short sale process.

2.     Underwater Homeowners Leave Behind Mortgages, but Lenders Can Still Come Calling (Las Vegas Review-Journal)

Homeowners grapple with paying the negative equity on a depreciated home versus taking the credit score hit by engaging in “strategic default.”  If opting for the latter, they should beware, for Nevada is a recourse state, meaning lenders can go after former homeowners years after foreclosures, short sales, and bank-approved sales. 

Comment:  For this reason, we strongly recommend consulting with an experienced bankruptcy/foreclosure attorney before proceeding with a strategic default.  Haines & Krieger offers free consultations where you can get advice and perspective on your situation and figure out the best strategy for your situation.

3.     Investors Swoop In Again, but Do They Bring A Stigma? (Las Vegas Sun)

Rather than buying homes to flip them at a higher price, investors are coming to Las Vegas to buy homes and then rent them.  Nearby homeowners are concerned that renters are unwilling to make the same personal investment in houses as owners.  On the other hand, investors claim that a rented house is better for nearby property values than a vacant one.

4.     Retail Index Places Las Vegas Near Bottom (Las Vegas Review-Journal)

Investors are also swooping in on Las Vegas’ retail properties.  The poor economy is weakening sales, which is leading to shops closing, so like the housing market, the empty retail space is for sale at discount prices for investors.

Comment:  Haines & Kriegers attorneys excel at commercial loan modifications.  Please feel free to contact us for a free initial consultation to discuss your situation.
 

Hep Stop Foreclosure Las Vegas
If your'e facing foreclosure and need good bankruptcy attorneys in Las Vegas, please contact us for a free foreclosure consultation.

Haines & Krieger attorneys have been at the forefront of helping Las Vegas residents deal with foreclosure problems and getting back on their feet.  So get in touch and let us help you figure out your best options for fighting foreclosure.