Help Stop Foreclosure Las Vegas

Your bankruptcy attorney has many powerful to help you keep property while eliminating debt. One tool is lien avoidance, which is available to both Chapter 7 and Chapter 13 debtors. The general rule in bankruptcy is that debts secured by a lien must be paid or the property must be surrendered to the creditor. However, under certain circumstances, a lien can be legally avoided without losing the property.

The Bankruptcy Code identifies two different types of liens that may be avoided during bankruptcy: (1) a judicial lien; and (2) a non-possessory, non-purchase money security interest in household goods or tools of the trade. Furthermore, to qualify for avoidance the debtor must be able to apply a bankruptcy exemption (a legal allowance to the debtor to protect property from creditors) to the property securing the debt.

Clear as mud, right?

Let's make it a little clearer: first, judicial liens are judgments and garnishments caused by a court order or judicial process. If your property is subject to a debt imposed by a court order, it may be possible to avoid the lien during bankruptcy. Statutory liens, like tax liens, are not avoidable in Chapter 7, but may be avoidable in Chapter 13.

Second, a non-possessory, non-purchase money security interest is simply a lien that you gave a creditor against property that you owned prior to incurring the debt and did not acquire using money from the creditor. A typical example is a personal bank loan secured by your television and/or other household items.

Finally, to qualify for lien avoidance, the debtor must be able to apply a legal exemption to the property. For instance, if you own a television worth $500 used as collateral for a $1,000 personal loan, you may be able to apply a legal exemption to protect the television and avoid the lien against it. Once the lien is avoided, the status of the debt changes from secured to unsecured and is likely discharged at the end of the bankruptcy case.

Additionally, if the legal exemption does not protect all of the value of the property, the lien may be reduced to the extent the lien secures the property. Using the above example, if the television is worth $500, but the debtor is only able to exempt $250 of its value, the creditor's lien would be reduced in value from $1,000 to $250 (the amount of non-exempt equity in the television).

To avoid a lien the debtor's attorney files a motion with the bankruptcy court alleging that the creditor's lien is impairing the debtor's exemption. Typically these motions are uncontested and are granted without hearing.

It is important that you provide your bankruptcy attorney with documentation for all of your loans. The attorneys at Haines and Krieger can avoid certain liens during the bankruptcy that will safeguard your property after your bankruptcy discharge.  Contact us today to discuss your options with a free consultation.

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.

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. 

Many students are unable to attend college without federal financial aid. Fortunately, a bankruptcy filing does not affect a student’s ability to obtain need-based financial aid. For most students that means Pell Grants and Stafford Loans, both subsidized and unsubsidized.  Your credit is not considered in determining your financial need to receive Pell Grants and Stafford Loans and your bankruptcy filing does not disqualify you from receiving need-based financial aid. Pell Grants and Stafford Loans are the two most common forms of financial aid to undergraduate college students.

Stafford Loans during a Chapter 13 bankruptcy presents a problem for the student. You will need permission from the bankruptcy trustee and bankruptcy court to incur additional debt. These requests are handled on a case-by-case basis, so consult with your bankruptcy attorney if you want to take loans to attend school during a Chapter 13 bankruptcy.

Credit-based financial aid is a different story. This type of financial aid includes student loans from private lenders such as Sallie Mae. Applying for credit-based loans is the same as applying for an unsecured personal loan. Your credit history is considered and your bankruptcy will play a part in the decision to give you the loan.

Your credit is also considered if you are a parent applying for a parent loan like the PLUS (Parental Loan for Undergraduate Students) Loan and the Graduate PLUS (a loan for Graduate students) Loan. These federally guaranteed parent loans are credit based and federal regulations state that a parent with a bankruptcy within the past five years is automatically disqualified from obtaining a PLUS Loan for his or her child, unless there were extenuating circumstances or the borrower obtains a creditworthy endorser.  However, if you are denied a PLUS Loan, your child qualifies for increased unsubsidized Stafford loan limits. Stafford loans remain in forbearance while the student attends school, while a PLUS Loan is subject to immediate repayment.

If you are a student or parent who needs money for school after a bankruptcy, speak with your student financial aid advisor and your bankruptcy attorney. Bankruptcy can help eliminate your personal debt and free money for college, or college loan repayment.  The attorneys at Haines and Krieger can explain the bankruptcy process and your legal rights.

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.

Bankruptcy is a powerful tool for eliminating personal debt.  It is important to know what bankruptcy can do for you, and what it cannot.

What Bankruptcy Can Do:

Bankruptcy can eliminate your personal obligation on many unsecured debts.  For many debtors this is the most important benefit of bankruptcy.  Most credit cards and medical bills can be discharged during bankruptcy and you will never worry about them again.

Bankruptcy can stop creditor collection activities and harassment.  When a bankruptcy is filed, all collection activity must stop.  After a debt is discharged at the end of your bankruptcy case, the creditor is prohibited from contacting you to collect on that debt.

Bankruptcy can stop a foreclosure or repossession.  In a Chapter 7 bankruptcy the debtor is given time to negotiate an agreement with the creditor, or prepare to walk-away from the debt and surrender a home or vehicle.  In a Chapter 13, the debtor can also surrender property back to the creditor, or force the creditor to accept payments to cure an arrearage and resume monthly payments.

Bankruptcy can protect personal assets.  Ordinary household goods, certain equity in vehicles or a family home, and retirement accounts are all protected during a bankruptcy.  Statistically only 1 in 20 debtors lose anything, and your bankruptcy attorney can advise you of any property that is at risk in advance of the filing.

Bankruptcy can strip away certain liens.   Many loans that are secured with an item you previously owned (called a Non-Purchase-Money Security Interest) can be stripped away during bankruptcy.  Under certain circumstances a second mortgage can be stripped and made an unsecured debt (and eligible for discharged). 

What Bankruptcy Cannot Do:

Bankruptcy cannot allow you to keep secured property without payment.  While there are exceptions, generally if you do not pay for a secured property (e.g. car or house), the property must be returned to the secured creditor.

Bankruptcy cannot eliminate certain types of debts.  The Bankruptcy Code lists debts that cannot be discharged such as student loans, certain taxes, and child support obligations.  However, every situation is different and many of these “non-dischargeable debts” can be discharged under certain circumstances.  Your bankruptcy attorney can discuss your individual situation and options for eliminating your debts.

The goal of the federal bankruptcy laws is to give the debtor a fresh start on a new financial future.  There are many powerful legal options available in bankruptcy to eliminate or reduce overwhelming debt.  The experienced bankruptcy attorneys at Haines and Krieger can explain your options and guide you to your fresh 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. 

Deciding whether to file bankruptcy can be difficult. There is no “bright line” test that signals when a bankruptcy is appropriate to solve a debt problem. For many debtors, it is not one issue, but a combination of debts that makes bankruptcy the right choice.

Below are common debt patterns that attorneys see from their bankruptcy clients. If you are experiencing one or more of these debt problems, a bankruptcy filing can improve your financial situation:

• Your wages are garnished or your bank account is attached
• You are unable to make even minimum payments to your creditors, or you struggle to make minimum payments each month
• Collectors harass you at home and at work
• You pick and choose what creditors to pay on-time
• You are caught up in a cycle of payday loans
• You are paying off large unsecured debts (e.g. credit cards, medical bills, etc.)
• You are at risk for repossession or foreclosure
• You are being sued for a debt
• The IRS is threatening collection action

Whether to file bankruptcy is a decision that is unique to your personal situation. If you are struggling with debt, a bankruptcy filing stops collection action and provides breathing room so you can decide how to move forward with your finances. The bankruptcy laws offer the choice of repayment or the outright discharge of most debts under the supervision of a federal court. In most cases there is no payment to unsecured creditors and the debtor does not lose any property.

If you are experiencing a persistent debt problem, bankruptcy may be the right choice for you. Discuss your situation with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can eliminate your financial burdens. Contact Haines and Krieger and get started on a brighter financial future today!

In 2004 and 2005, the banking industry spent millions lobbying for tougher bankruptcy laws. Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. collectively spent $25 million during that period. The big banks' efforts paid off in a major overhaul of the Bankruptcy Code in 2005 making it more difficult for struggling families to discharge credit card debt. However, the banks did not foresee the current housing crisis, and new research suggests that the 2005 changes to the Bankruptcy Code may have caused mortgage default rates to rise.

A paper published by the National Bureau of Economic Research states that the 2005 changes “raised the cost of filing and reduced the amount of debt that is discharged" thereby making it more difficult for debtors "to shift funds from paying other debts to paying their mortgages[.]" In other words, before the 2005 changes, many debtors struggling with a mortgage arrears and credit card debt could file bankruptcy, discharge the credit card debt, and free-up money to pay the mortgage. The new bankruptcy provisions make this process more difficult. As a result, fewer debtors are able to afford to save their homes through the bankruptcy process.

Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank said, "Be careful what you wish for. [The banks] wanted to make sure that people kept paying their credit cards, and what they're getting is more foreclosures."

If you are facing overwhelming debt and want to keep your home, there are many alternatives available to you. An experienced bankruptcy attorney can review your finances and explain your legal options for discharging or repaying your debts. Bankruptcy is not the only option for saving a home from foreclosure, and many cases are successfully resolved using a combination of bankruptcy and non-bankruptcy methods.  Get the facts today and solve your debt dilemma!  Contact Haines and Krieger for a free consultation.

The Bankruptcy Code directs the Chapter 7 debtor to file a statement of intention with the bankruptcy court within 30 days after the petition filing, or on or before the 341 Meeting of Creditors, whichever is earlier. A statement of intention advises the court, the bankruptcy trustee, and your creditors of how the debtor intends to treat secured collateral, like a car or home, in the bankruptcy.

The Bankruptcy Code also requires that the Chapter 7 debtor perform on that intention within 45 days after filing the statement. The Bankruptcy Code allows the debtor to choose one of the following: (1) surrender the collateral back to the creditor and discharge any personal liability; (2) reaffirm the debt and retain the collateral in exchange for continued personal liability on the original debt; or (3) redeem the collateral by paying the current fair market value in a lump sum.

Prior to the overhaul of the Bankruptcy Code in 2005, a Chapter 7 statement of intention had little relevance.  Now the statement of intention can mean the difference between keeping and losing an automobile or other secured property. 

Failure to timely file or perform on a statement of intention causes the automatic stay to be lifted and the property is longer a part of the bankruptcy case. In some cases, a purchase agreement may contain an ipso facto clause which creates a default on the loan by filing bankruptcy. The Bankruptcy Code expressly nullifies ipso facto clauses, but only for property of the bankruptcy estate. Most courts find that ipso facto clauses are enforceable under state law when property is no longer a part of the bankruptcy estate. 

Let me restate this situation in plain English: if you file bankruptcy and do not file or timely perform on a statement of intention, the property is no longer protected by the bankruptcy and can be repossessed by the creditor, even though you are current on the loan. This situation recently was discussed in a Ninth Circuit Court of Appeals case, Dumont v. Ford Motor Credit Company.

If you have an auto loan or other secured item you want to keep, discuss your options with an experienced bankruptcy attorney. The attorneys at Haines and Krieger can help you reach the right decision for you and your family.  Contact us today for a free consultation.

Bankruptcy is a federal legal process for declaring an inability of an individual or organization to pay its creditors. The United States Constitution authorizes the bankruptcy laws and federal laws govern all bankruptcy cases. 

One stated purpose of the federal bankruptcy laws is to give the debtor a financial "fresh start." At the end of most cases the bankruptcy judge will discharge certain debts and release the debtor from personal liability. 

The bankruptcy laws are meant to give the honest debtor a fresh start, but not a head start. Therefore, Congress has identified certain debts that cannot be discharged in a bankruptcy. Many debts that would ordinarily qualify for discharge may be determined as non-dischargeable if a debtor has committed a crime or fraud in acquiring the debt. Other debts are deemed generally non-dischargeable based on public policy reasons (like taxes or child support).

Generally, the following are non-dischargeable debts:

1.                  child support or alimony obligations, and debts considered in the nature of support;

2.                  student loans, unless repayment would cause you undue hardship;

3.                  criminal fines or restitution;

4.                  debts listed in a prior bankruptcy where debtor was denied a discharge;

5.                  recent income taxes less than three years past due; and

6.                  auto accident claims involving intoxication.

Additionally, there are circumstances which may make a debt non-dischargeable:

1. debts incurred on the basis of fraud;
2. debts from willful or malicious injury to another or another's property;
3. recent purchases with credit cards;
4. debts from larceny (theft), breach of trust or embezzlement; and
5. most federal, state and local taxes and any money borrowed on a credit card to pay those taxes.

All of the categories of non-dischargeable debts in bankruptcy have specific rules and exceptions and each situation has its own challenges. If you have a debt that may fall into a non-dischargeable category, discuss your situation with a qualified bankruptcy attorney and learn your options. The attorneys at Haines and Krieger can provide options for managing, repaying, or discharging the debt.  Contact us for a free consultation today.

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.

Each year many Americans find themselves facing bankruptcy through no fault of their own. The American Journal of Medicine reported in 2009 that medical bills contributed to more that 60 percent of U.S. personal bankruptcies. A catastrophic medical condition can wipe out savings, assets, and even cause loss of income.

The study conducted by researchers 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, two-thirds were homeowners, and three-fifths had gone to college. Many of the debtors were average middle-class families who saw their lives tossed upside-down after a serious 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.

While medical expenses can lead to bankruptcy, the federal law requires the debtor to include all debts in a bankruptcy case, including auto loans, mortgages, and credit cards. A “medical bankruptcy,” when the debtor only discharges medical debt, is a myth. The bankruptcy laws do not allow the debtor to pick and choose which debts are included and which are excluded. Debts are treated fairly and equally in bankruptcy, and the debt classes are structured to avoid preferential treatment of one creditor over another within the same class.

For example, a hospital and a credit card company are generally classified as unsecured creditors and will receive the same treatment during the bankruptcy. If there are no assets available to pay these debts, both debts are discharged at the end of the case. However, while a debt may be discharged and no longer legally enforceable, the debtor may always voluntarily repay the creditor.

If your family is faced with high medical expenses, consult with an experienced bankruptcy attorney at Haines and Krieger and discover your options. The federal bankruptcy laws can discharge your medical bills and provide a fresh start on a better financial future.  Contact us today 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.