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The United States Trustee Program is a component of the Department of Justice. The Trustee Program appoints and supervises local private trustees who administer Chapter 7 and 13 bankruptcy estates. One of the private trustee’s chief duties in Chapter 7 cases is to liquidate the debtor’s nonexempt assets and pay creditors with the proceeds. Similarly, in a Chapter 13 case the trustee must ensure that the debtor devotes all disposable income to debt repayment.

The trustee is not your friend, the judge, or your legal counsel. The trustee has no judicial power to make final decisions or issue orders regarding your bankruptcy case. While the private trustee is very skilled at bankruptcy law, the trustee is forbidden from giving the debtor legal advice. 

On occasion a debtor will contact the trustee’s office with questions concerning the bankruptcy case. This is always a bad idea and often results in a negative outcome. Direct debtor contact is uncommon, so the trustee will identify and remember a debtor that personally contacts his or her office. The case may have been a “routine” bankruptcy case for the trustee, but after the debtor contact the case is squarely on the trustee’s radar. The trustee will assume there is a problem with the bankruptcy and scrutinize the case.

During a lawsuit direct communication with represented litigants is generally prohibited. Many trustees are also licensed attorneys, but may communicate directly with you while performing the duties of bankruptcy trustee. If you call the trustee, he or she will likely speak with you. And why not? You may inadvertently disclose something that is better left unsaid. What seems like an innocent and expedient communication may turn into an issue that you are unable to predict. 

The bankruptcy trustee is not your friend. If you have questions concerning your bankruptcy, discuss your issues with your attorney. The attorneys at Haines and Krieger  can answer questions about bankruptcy and are experienced in dealing with the bankruptcy trustee. Let the attorneys at Haines and Krieger represent you and do not complicate your case by communicating directly with the bankruptcy trustee.  Contact us today for a free consultation.

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.

Examining your options is important for anyone experiencing debt problems. If you are considering bankruptcy or debt settlement to resolve your financial difficulties, investigate the consequences of each process before making your decision. Below is some information about debt settlement companies and bankruptcy that you may not know:

Debt Settlement: The debt settlement process will harm your credit for years. Creditors will report your delinquent account until it is paid. Your report may identify settled accounts as paid less than 100%, which also adversely affects your credit score. 

Bankruptcy: Any debt included in a bankruptcy appears on your credit report as discharged with a zero balance from the date you filed your bankruptcy case. Bankruptcy stops adverse reporting so your credit report can improve. 

Debt Settlement: The typical debt settlement account will resolve your debt with a lump sum payment of between 20% and 80% of the debt.

Bankruptcy: In most bankruptcy cases you pay nothing to unsecured creditors.

Debt Settlement: Any settled debt will have tax consequences and you may have to pay the IRS. 

Bankruptcy: There is no tax liability for a debt discharged in bankruptcy.

Debt Settlement: You may be sued while you or your representative is attempting to settle your debt.   

Bankruptcy: All lawsuits are prohibited during your bankruptcy case.

Debt Settlement:  Some debt settlement companies are disreputable and the process is even illegal in some states.

Bankruptcy: The bankruptcy process is authorized by the United States Constitution and its laws are written by Congress. Only licensed attorneys admitted to practice in the federal courts are able to represent bankruptcy debtors.

Debt Settlement: The debt settlement process can take more than a year. The general rule is: the longer you don’t pay, the better the settlement. Creditors are reluctant to accept less than full payment unless they believe that you may file bankruptcy.

Bankruptcy: The typical chapter 7 bankruptcy case takes less than six months.

If you are struggling with debt in Nevada, investigate your options and speak with one of the experienced Las Vegas bankruptcy attorneys at Haines and Krieger. The federal bankruptcy law is a powerful tool to eliminate your debt problem and put you on the road to financial recovery.  Contact Haines and Krieger for a free Las Vegas bankruptcy 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.

The Bankruptcy Code requires every debtor to appear and submit to a bankruptcy examination under oath at a meeting with the debtor's creditors. This meeting is presided over by the bankruptcy trustee and is an opportunity for creditors and the trustee to determine if assets have improperly been disposed of or concealed or if there are grounds for objection to discharge. At this meeting the trustee must inform the Chapter 7 debtor of the consequences of bankruptcy, the availability of relief under other chapters of the Bankruptcy Code, and the effect of receiving a discharge of debts and of reaffirming a debt.

The Meeting of Creditors (also called the "Trustee's Meeting," the "Creditors’ Meeting," or the 341 Meeting (after section 341 of the bankruptcy code which requires the meeting) is held between 20 and 40 days after your bankruptcy is filed. The bankruptcy court schedules the meeting and mails notices to all of your creditors. However, the bankruptcy judge is prohibited from attending the meeting. Since there is no judge, the Meeting of Creditors is not a judicial proceeding. 

The bankruptcy trustee is required examine you under oath and investigate your financial affairs. The trustee then submits a report to the bankruptcy court and Office of the U.S. Trustee. The trustee is also required to ask specific questions, including:

Did you read your schedules before signing them?

Did you list all of your assets?

Did you list all of your debts?

Are your schedules accurate or do you need to make any corrections?

Do you have a domestic support obligation?

The trustee may also have specific questions concerning your schedules which may involve your assets, income, expenses, debts, or financial transactions. Your attorney will be present with you to assist you during this examination. The trustee may also require that you provide information or documents before, during or after the meeting including bank statements, pay stubs, tax returns, vehicle titles, and land ownership and debt documents. Finally, you are required to provide proof of identity including social security number and a government issued photo I.D.

Despite the name, the Meeting of Creditors is generally a meeting that no creditors attend. For most national creditors like Ford Motor Credit or Capital One it is not cost-effective to attend these meetings. Because the trustee conducts dozens of these meetings on the same day, any creditor questions are limited to only a few minutes. If the creditor needs additional time, it can ask the bankruptcy court to order the debtor to appear for a further examination between just the creditor and the debtor at a later date.

Many bankruptcy debtors are very nervous going into the Meeting of Creditors, but soon realize that it is just a procedural formality. The experienced bankruptcy attorneys at Haines and Krieger will assist you during your meeting, and can answer any questions concerning your Nevada Meeting of Creditors or the bankruptcy process.  Contact us today for a free consultation.

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.

It is no surprise that illness is a chief contributor to personal bankruptcy. In fact, a 2009 study released by Harvard researchers claims that 62% of all personal bankruptcies during 2007 were caused by health problems.  Many individuals struggling with medical bills need relief, but worry about how a bankruptcy will affect their ability to receive medical care in the future.

Under the Emergency Medical Treatment and Active Labor Act hospitals and ambulance services are required to provide emergency healthcare to a person regardless of ability to pay. This federal law requires appropriate medical screening, necessary stabilization, and transfer to an appropriate facility for treatment of an emergency condition. In broad general terms, if you have an emergency medical condition, a hospital ER must treat you.

If you do not have an emergency medical condition, the hospital or doctor may refuse treatment to a bankruptcy debtor. It is unusual for a hospital to deny service after bankruptcy unless the patient demonstrates an inability to pay the new bill. If you have insurance or other form of guaranteed payment, the hospital will likely treat you.

Individual physicians are more likely to deny services if you have discharged their bill. Many bankruptcy debtors want to continue a relationship with their personal doctor, and consequently make payment arrangements after the bankruptcy has been filed.  While the bankruptcy law requires the debtor to list every creditor, there is no prohibition against paying a debt after the bankruptcy. Paying the debt does not renew or create a new obligation and the doctor may not take action to collect a discharged debt (i.e. writing or calling to encourage payment).

If you need to include medical bills in your bankruptcy, but worry about receiving future medical care, consult with the Las Vegas bankruptcy attorneys at Haines and Krieger. In most cases there is no interruption in medical care or treatment. Know your legal rights and be informed of how your bankruptcy will affect your ability to receive medical care.  Contact us 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. 

Many people mistakenly believe that the bankruptcy court will take everything they own and sell it to pay creditors. Some of their descriptions of bankruptcy conjure up images of a poor unfortunate walking the streets of Las Vegas wearing a wooden barrel with no property or money to his name.

Well, you can stop worrying about barrel chafing because there are many legal protections that allow you to keep household property during bankruptcy. These protections are generally limited to “common sense” amounts and typically apply to clothing, household furniture, musical instruments, books, electronics, appliances, etc. 

One stated goal of bankruptcy is to give the debtor a “fresh start,” so Congress and state legislators attempt to balance the requirement of the debtor to have basic necessities against your creditors’ interests in receiving payment for your debts. The idea is to permit the debtor the things he needs for day-to-day living while prohibiting the debtor from living a lavish lifestyle at the expense of his creditors. For instance, if you have a Steinway grand piano worth $50,000 in your living room, it will likely be taken and sold to pay creditors. If you have a family piano worth $2,000, you can likely keep it.

The truth is that only around four percent of Chapter 7 bankruptcy cases are “asset cases,” meaning the bankruptcy trustee receives money or an asset from the debtor. In the vast majority of these “asset cases” the debtor loses a car or real estate in which he has too much equity. It is very rare to see a debtor lose any household item during a Chapter 7 bankruptcy. Debtors in Chapter 13 keep their property.

Determining whether a household item is at risk is a simple arithmetic calculation. First, start with the liquidation value of the item. Often this value can be determined by looking at yard sales or internet auction sites like Ebay. Next subtract the applicable state or federal exemption amount for that item. Any remaining sum is unprotected equity. Your bankruptcy attorney can discuss your options for protecting and keeping items with unprotected equity.

It is important to correctly describe, value and apply the proper exemptions to household items in your bankruptcy schedules. Once you have provided an adequate description and value of your household items, your attorney can apply the proper exemptions and protect your property from turn-over to the bankruptcy trustee. Discuss any of your property concerns with the attorneys at Haines and Krieger to ensure that you obtain full legal protections during bankruptcy.  Contact us for a free consultation today.

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.

1.                  unpaid taxes due within three years of the bankruptcy filing;

2.                  unpaid taxes for returns filed late, but within two years of the bankruptcy filing;

3.                  unpaid taxes for tax years when the debtor did not file a return; and

4.                  unpaid taxes due when the debtor filed a fraudulent return or tried to evade the tax obligation.

If you have any question whether your tax debt can be discharged during your bankruptcy, consult with your attorney.  Some tax penalties can also be discharged, so be sure to discuss exactly what portion of your tax debt will be discharged, and what portion will survive.

Tax liens can be stripped off during a Chapter 13 bankruptcy to the extent that the lien is more than the equity in property.  Tax liens cannot be stripped or otherwise avoided in Chapter 7.  However if the tax is dischargeable in a Chapter 7, the bankruptcy court should determine the extent of the tax lien against your property.

Property taxes are treated differently after bankruptcy.  Your personal obligation to pay property taxes can be discharged if the tax was last payable without penalty more than one year before you file bankruptcy.  However, property taxes are secured with a lien which will generally survive the discharge.  If you keep the property, you must pay the tax debt after the bankruptcy.  If the property is surrendered during the bankruptcy, you will owe nothing.

The intersection of tax and bankruptcy is a complicated area of the law.  It is important to address any tax issues early in your case and have a clear understanding of how you and your attorney will deal with your tax debt during your bankruptcy.  Contact Haines and Krieger today and discuss your tax debt during a free consultation.

Filing bankruptcy is a difficult decision, but sometimes life dictates choices to us.  Financial disaster can blind-side any of us, like a job loss or medical catastrophe.  Whatever the reason, individuals occasionally need the protections of the federal bankruptcy laws a second time.

An individual can ordinarily file a bankruptcy case at anytime, however there may be restrictions on the relief that is available.  The most common restriction is the eligibility to receive a bankruptcy discharge.  To receive a Chapter 7 discharge, you must file your case eight (8) years after your previous Chapter 7 case was filed, or six (6) years after your Chapter 13 case was filed.  To receive a Chapter 13 discharge, you must file your case four (4) years after your previous Chapter 7 case was filed, or two (2) years after your Chapter 13 case was filed.

In some cases, receiving a bankruptcy discharge may not be important to the debtor.  For instance, if a debtor has a non-dischargeable debt like child support or taxes that must be paid, bankruptcy can offer an organized process for payment while the debtor retains some control.

Another less common restriction concerns the automatic stay.  If your bankruptcy case is dismissed within the past year, the bankruptcy court assumes that your second bankruptcy is filed in bad faith.  The automatic stay will only apply for 30 days after your second filing.  A hearing is required to extend the automatic stay and you must convince the court that you have filed in “good faith.”  If you file two or more cases within the past years, you must petition the bankruptcy court for a stay – it is not automatic for any period of time.

Finally, you are not eligible to file at all if your case was dismissed by the bankruptcy court within 180 days due to a willful failure to obey an order of the bankruptcy court, or if your case was voluntarily dismissed after a creditor sought to lift the automatic stay to enforce a lien against your property.

Filing a second bankruptcy is not uncommon.  Congress has established a few additional rules to deter abusive serial filers, but bankruptcy protection is available for the honest yet unfortunate debtor.  If you need assistance with filing a second bankruptcy case, contact  the experienced bankruptcy attorneys at Haines and Krieger and get the relief you need.

A bankruptcy discharge is an order from the United States Bankruptcy Court.  The discharge is a court injunction prohibiting any attempt to collect on a discharged debt.  Creditors are strictly prohibited from contacting the debtor by mail, phone, or otherwise; filing or continuing a lawsuit; attaching wages or other property; or taking any other action to collect a discharged debt.  A creditor that violates this order is subject to contempt of court and may have to pay damages and attorney's fees.

A creditor that contacts you in an effort to collect a discharged debt is in violation of the bankruptcy court’s discharge injunction.  Usually such contact is a mistake and the creditor is unaware of your bankruptcy discharge.  While claiming ignorance is not a valid excuse for violating the bankruptcy court order, informing the creditor that you have filed bankruptcy and received a discharge of the debt is often enough to stop future collection actions.  The creditor may want to know certain information about the bankruptcy (case number, date of discharge, chapter, etc.) to update their records and stop further collection efforts.  You can answer these questions or simply refer the creditor to your attorney.

It is good practice to document any post-discharge collection action by creditors.  While these collection attempts are often mistakes, a main purpose of the bankruptcy discharge is to allow you to live your life free from creditor harassment.  The bankruptcy discharge applies to the debt and enjoins any collection of the debt.  Consequently, the discharge injunction applies to the original creditor, collection agencies, attorneys, and any other subsequent collector.

Your bankruptcy discharge is legal protection against creditor harassment concerning discharged debts.  If you are repeatedly contacted by a creditor after your bankruptcy discharge, document the creditor contact and report it to your attorneys at Haines and Krieger.  The law is on your side and will protect your right to a fresh start free of creditor harassment.