The 11th Circuit affirmed a decision coming out of Alabama sanctioning Law Solutions of Chicago (Upright Law) and local counsel $150,000 and disgorgement of fees in 3 cases and barred Upright Law from filing cases in the Northern District of Alabama for 18 months for violation of Rule 9011, §707, and  §526 for filing 3 cases with Rule 2016 disclosures that did not comply with a prior settlement agreement requiring Upright Law to perform certain bankruptcy services such as dischargeability proceedings, stay motions, redemptions, lien avoidances, contested exemptions, reaffirmations, and continued 341 meetings; without charge that had previously been excluded from the list of services performed as part of bankruptcy representation.  This despite no evidence that any charges were actually made, or services in that category actually performed.  The Upright Law firm is a large legal firm based in Chicago that solicits clients through the internet and refers them to 'partner' attorneys who practice in the locality where the clients reside.  While designated as partners, the attorney in this case had never attended a partnership meetings, did not receive year end draws or distributions, and did not know the names of other attorneys in the firm.  The case results for a prior settlement agreement in two cases in 2016 in the Northern District of Alabama concerning Upright's involvement in a car repossession scheme involving referral to companies controlled by an associate of the firm of clients that had cars they wished to surrender, who would then take possession of the vehicle, pay the attorneys fees and filing fee for the bankruptcy, tow the vehicle to another state, and notify the creditor that they had just a few days to pay large fees for the loading, towing, and storing expenses.  As part of the settlement in that case after mediation Upright agreed to $50,000 paid to the estates,  barred the firm from filing new cases in the district for 6 months, and required any cases for clients that had hired them during such bar period filed after such bar to provide the above noted 'excluded services' for free.  About seven months after the approval of the compromise the bankruptcy administrator discovered three cases for clients covered by the settlement where the Rule 2016 disclosure indicated Upright would charge for those excluded services and filed a motion to examine .the transactions and determine whether such disclosures violated the settlement agreement.  Prior to any court action Upright amended the disclosures in accordance with the settlement agreement.    Following an evidentiary hearing the bankruptcy court determined that Upright violated §707 and §526, and that the conduct warranted the sanctions ordered.  The court found that Upright would not have allowed the error to occur had they been operating in good faith.  The bankruptcy court's order also cited at length the prior complaints regarding the repossession scheme.  After the district court affirmed the ruling, Upright appealed to the 11th Circuit.  The 11th Circuit initially found authority for the bankruptcy court to issues sanctions, and found such authority in the debt relief agency provision of §526(a)(2) by the misleading disclosure that Upright was authorized to charge fees not allowed under the settlement agreement.   Upright argued at the circuit level that the bankruptcy court did not have subject matter jurisdiction on some or all of the 6 cases.  First, three of the cases were closed when the sanctions were imposed, and never reopened.  The 11th Circuit disagreed, finding a number of cases indicating court's retained jurisdiction to impose sanctions even when cases are discharged or closed.  Next the court rejected Upright's argument that since the bankruptcy order approving the settlement in the prior litigation had not incorporated the agreement or it's terms, the court lacks jurisdiction to enforce such settlement.1   The 11th Circuit rejected this argument as there is an independent basis for jurisdiction, the bankruptcy provisions on which the motion to examine was based and Upright's compliance with the Bankruptcy Code provide independent grounds for subject matter jurisdiction.  Upright next argued that their due process rights were violated when it imposed sanctions without specific notice that §§526, 707, and rule 2016 were in play.   Due process requires that the attorney (or party) be given fair notice that his conduct may warrant sanctions and the reasons why. Notice can come from the party seeking sanctions, from the court, or from both. In addition, the accused must be given an opportunity to respond, orally or in writing, to the invocation of such sanctions and to justify his actions.  In re Mroz, 65 F.3d 1567, 1575-76 (11th Cir. 1995).The Court found that Upright had ample notice that the bankruptcy administrator was alleging violations of §§526, 707 and Rule 2016 based on the motion to examine, the hearing, the show cause order issued after the initial hearing, the evidentiary hearing on the show cause order, and the post- cause hearing briefing.  The court found Uprights' argument as to the order suspending it's authority to practice to be moot as such suspension had been completed by the date of oral argument. Finally, Upright contended that their conduct was unintentional, and the sanctions were grossly excessive.  Again, all but the $150,000 monetary sanctions had been rendered moot.  Upright alleged the court 'went out of its way to portray Upright in a negative light', referring to the firm as a high-volume, monolithic, internet cartel and bankruptcy mill, and making repeated references to ethical problems with the firm's business model, as well as repeating at length the details of the repossession scam.  The circuit court believed such sanctions were warranted based on a clear violation of §526, the bankruptcy court's opportunity to observe the demeanor and credibility of Upright's witnesses (finding them to be arrogant and indifferent), and finding that the previous sanctions failed to get Upright's attentions. 1 See Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) wherein Supreme Court found that courts did not retain jurisdiction to enforce settlement agreements simply based on approval thereof..↩Law office of Larry Heinkel, P Aby: Michael Barnett506 N. Armenia Ave.Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com   

This story orginally appeared at https://patch.com/new-york/new-york-city/taxi-drivers-protest-no-coronavirus-relief-sight--------------- Taxi Drivers Protest With No Coronavirus Relief In SightDrivers shut down traffic around city hall to protest a lack of aid, and continued on to medallion creditors who still demand payment.By Documented NY, News PartnerAug 21, 2020 1:19 pm ET Bronx, New York - May 6, 2018: Views of Jerome Street in the Bronx. Bronx, New York - May 6, 2018: Views of Jerome Street in the Bronx. (Photo: Christopher Lee for Documented.)August 21 2020Max Siegelbaum @maxsiegelbaumTaxi drivers parked their cabs and shut down the area around New York City Hall on Wednesday morning to demand help from the mayor. COVID-19 has dried up most of their fares, and creditors are still seeking money for their taxi medallions that have plummeted in value. The New York Taxi Workers Alliance organized the rally, which proceeded from city hall to buildings of taxi loan creditors in Long Island and New Jersey. The organization estimates ridership has dropped between 80 percent and 90 percent during the pandemic. "The brokers, the mayor the banks, they all said they would take care of yellow medallion taxis, but instead, the TLC [Taxi and Limousine Commission) didn't tell drivers the medallion was going to drop from hundreds of thousands of dollars to only $83,000 — leaving many of us with huge debt and it's killing us," one driver said outside City Hall. amNY

Philadelphia Bankruptcy Lawyer to Help You Clear Private Student Loans Are you looking for help with unaffordable private student loans? Generally, most private student loans are not forgiven, so if you are looking for private student loan forgiveness, you will probably be out of luck. However, individuals can discharge their private student loans in bankruptcy if their loans do not qualify for exception to discharge. Here are the circumstances under which you can get rid of private student loans. Call us at (215) 625-9600 for your free, no-obligation consultation if you think one of these circumstances may apply to you and your private student loan. Discharging Student Loans for Undue Hardship You have probably heard student loans are excepted from discharge in bankruptcy unless you can prove that you or your dependents would suffer “undue hardship” if forced to pay them back. This is a notoriously high bar to meet. Very few student loan borrowers can show that they are completely unable to pay back some or all of their student loan debt due to undue hardship. However, not all student loans are the same. Some private student loans fall through the cracks in Bankruptcy law and can be discharged as ordinary unsecured debt. Under Section 523(a) of the federal Bankruptcy Code, a student loan meeting the following criteria is only dischargeable if the debtor can prove “undue hardship.” (8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for— (A) (i)an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual There are three circumstances under which private student loans can be discharged as unsecured debt. If Your Loan was Not a “Qualified Education Loan” it is Dischargeable as Ordinary Unsecured Debt If you were loaned money above and beyond the “costs of attendance,” that loan may not be a qualified education loan under the Bankruptcy Code, and you may be able to have it discharged as ordinary unsecured debt. Bankruptcy law references Section 221(d)(a) of the Internal Revenue Code, which provides that interest on an education loan can only be deducted from income for tax purposes if the loan was “incurred solely to pay qualified higher education expenses.” “Qualified higher education expenses” are in turn defined in the Higher Education Act of 1965 as the “cost of attendance.” What expenses are included in the cost of attendance? Tuition and fees Rent or purchase of required equipment or materials Books, supplies, transportation Room and board Allowance for personal expenses If your loan was used for something more than the costs of attendance at your school, call us. We can help determine whether it is dischargeable as ordinary unsecured debt. If You Did Not Attend an “Eligible Education Institution” Your Private Student Loan is Dischargeable as Ordinary Unsecured Debt For the purposes of bankruptcy, a qualified educational institution is a college or other post-secondary school authorized to participate in the U.S. Department of Education Student Loan program. 26 U.S.C. 25A(f)(2) Eligible educational institution – The term “eligible educational institution” means an institution – (A) which is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and (B) which is eligible to participate in a program under title IV of such Act. Page 37 of IRS publication 970 describes an “eligible educational institution” as any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. If the school you attended was not accredited or not eligible to participate in the U.S. Department of Education student loan program, the loan you took out to attend that school may be dischargeable as ordinary unsecured debt. Call us to schedule your free consultation and we will help you find out. If You Did Not Attend School at Least Half-Time, Your Private Student Loan may be Dischargeable as Ordinary Unsecured Debt Under 26 U.S.C. § 221(d)(2) a student must be attending school at least half-time for the private student loan to be subject to the undue hardship test. If you attended school less than half-time, contact us. We can help determine whether your private student loan debt is dischargeable is ordinary unsecured debt. We Can Help You Get Rid of Private Student Loan Debt If you are having trouble paying your private student loan debt, give us a call. We can analyze the facts of your situation and advise you as to whether your private student loan is eligible for bankruptcy discharge as ordinary unsecured debt. We help you assess your entire financial situation, and even if your private student loan is not dischargeable as ordinary unsecured debt or under the undue hardship test, there may be other debt you have that we can get discharged for you, to help you afford your student loan payments. Contact us to get your fresh start.   The post How to Get Rid of Private Student Loans in Bankruptcy appeared first on David M. Offen, Attorney at Law.

Texas lawyers have long bemoaned the tendency of large Texas-based companies to file bankruptcy in Delaware or New York. However, with the collapse in oil prices and the impact of Covid-19 on retail, many large companies are seeking to restructure in Texas. Since January, 36 groups of companies reporting at least $100 million in assets have filed Texas cases. These cases generated a total of 802 individual case filings. Since the filing fee for a case is $1,717, the flood of filings has generated $1,377,034 in filing fees for the clerk’s offices. To arrive at these numbers, I looked at all of the chapter 11 filings in Texas this year. On the petition, there is a place to list estimated assets in ranges of $100-$500 million, $500 million - $1 billion, $1-$10 billion, $10-$50 billion and $50 billion or more. In a few cases, where the petitions did not seem to reflect the assets, I looked further at schedules and first day declarations. In the case of GGI Holdings (Gold’s Gym), I knew that the company had sold for $100 million, so I gave it a bump up to that category. I also aggregated fourteen single asset real estate cases related to World Class Capital into a group of companies although they are not being jointly administered.  Of the 36 groups of cases, 31 filed in the Southern District of Texas, including two $10 billion cases, four filed in the Northern District of Texas and one filed in the Western District of Texas. The Southern District of Texas cases were divided between just two judges, Judge Marvin Isgur and Judge David Jones, who make up that district’s complex case panel. Oil and gas extraction and support services made up 21 of the large groups of filings. There were also a number of well-known retailers filing in Texas, including Neiman Marcus, Stage Stores, JC Penney, Tuesday Morning and Tailored Brands (Men’s Warehouse and Joseph A. Bank). Other businesses likely affected by Covid-19 were fitness chain Gold’s Gym, California Pizza Kitchen and NPC International (franchisee for Wendy’s and Pizza Hut). Of these cases, eleven met my minimum cutoff of $100 million. Another five cases reported assets of at least half a billion dollars. Eighteen cases hit the billion-dollar mark. Two cases broke $10 billion. That means that Texas had twenty billion dollar filings, an incredible showing for less than a year’s time. Out of the 36 groups of companies, three were headquartered outside of the United States, eleven were based in other states, and twenty-two were Texas based (even if they filed in a different Texas district than their home office). Ironically, large number of financially troubled companies filing in Houston could be a boost for that city’s economy. Bloomberg Business Week has estimated that having a major case filed in a city generates $4.5 million worth of economic activity, such as amounts spent on hotels, restaurants and cabs. The thirty-one large filings in Houston and Corpus Christi could be worth at least $139,500,000 in economic activity, not including fees earned by Texas professionals. (While many of the lead law firms were from out of state, nearly every case had a Texas local counsel. If you would like a chart showing the filings, please feel free to email me at ssather@bn-lawyers.com. 

Deciding to file for bankruptcy is a very personal decision. You may agonize over whether it is the right choice, and if you decide that it is, you may wring your hands over the right timing. You may tell yourself that there is still something else you can do to avoid bankruptcy, or you may take a “wait and see” approach. Meanwhile, your financial problems can continue to get worse.  In fact, bankruptcy should not be seen as a “last resort” or something that you have to do because you have no choice. Bankruptcy is actually a powerful legal resource – a secret weapon in your financial arsenal. A good bankruptcy attorney in Glendale can help you learn more. But here are just some of the many great things that bankruptcy can do for you – and reasons you should see it as a judicious choice:  Prompts an Automatic Stay One of the biggest problems you face when you start accumulating debt you can’t pay is harassment from creditors. You may receive phone calls day in and day out – even multiple times a day. You may get called at home and at work. If your creditors break the rules, they may even talk to your neighbors, co-workers, family, or friends, or they might call you very early in the morning or very late at night. You may dread answering your phone or checking your email. When you file for bankruptcy, you trigger what is known as the “automatic stay.” The stay puts an immediate stop to any contact from any of your creditors. You may be contacted by a creditor or two who didn’t update their information quickly enough with their call centers. But after you let them know you have filed for bankruptcy  you shouldn’t hear from them again. If you do, you can take action against them.  Saves Your House If you let your credit problem go, you may have to start selling assets. You may not have any other recourse if you don’t take steps before then. If you own your home, that may mean eventually selling your house – either to downgrade to something cheaper or to move in with family or make some other arrangement. If you file for bankruptcy in Phoenix , you can keep your house. Chapter 7 bankruptcy in Mesa allows for a homestead exemption. So, unless you own a very expensive house outright, your house will not be seized to pay creditors. If you have fallen behind on your mortgage, you can file for Chapter 13 bankruptcy in Mesa to include the amount you owe in a debt repayment plan. You’ll save your house from foreclosure and deal with your debt problem at the same time.  Saves Your Retirement Accounts Instead of selling your assets to pay your debts, you may think to cash in your retirement accounts to pay off your debts. However, doing so would be a big mistake. You’ll only be pushing your problem down the road – you may pay off your debts, but you’ll find yourself without the resources you need when you retire, creating a financial crisis when you have fewer solutions.  Fortunately, retirement accounts are among the assets that you can exempt from a bankruptcy filing. You don’t have to worry that creditors will take legal action against you and seize your account. You can file for bankruptcy and protect your retirement savings while eliminating your debt or making it more manageable.  Bankruptcy can help you take control of your finances, rather than waiting until your creditors are taking action against you and you no longer have any choices. Talk with a bankruptcy attorney  serving near you in Gilbert to determine how bankruptcy can help you get maximum debt relief and allow you to reach your financial goals.  My AZ lawyers are ready to help if you live in Mesa, Glendale, Tucson, Phoenix, or the surrounding area. An experienced and dedicated bankruptcy attorney serving in Arizona from our team will help you understand your rights and responsibilities under bankruptcy law, as well as how bankruptcy can help you gain the freedom you seek from overwhelming debt. We represent individuals interested in Chapter 7 bankruptcy or Chapter 13 bankruptcy, as well as businesses. Call our bankruptcy law office  to schedule a consultation today. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Bankruptcy Last Resort or Secret Weapon appeared first on My AZ Lawyers.

Bankruptcy Last Resort or Secret Weapon Deciding to file for bankruptcy is a very personal decision. You may agonize over whether it is the right choice, and if you decide that it is, you may wring your hands over the right timing. You may tell yourself that there is still something else you can do to avoid bankruptcy, or you may take a “wait and see” approach. Meanwhile, your financial problems can continue to get worse. In fact, bankruptcy should not be seen as a “last resort” or something that you have to do because you have no choice. Bankruptcy is actually a powerful legal resource – a secret weapon in your financial arsenal. A good Avondale bankruptcy attorney can help you learn more. But here are just some of the many great things that bankruptcy can do for you – and reasons you should see it as a judicious choice: Prompts an Automatic Stay One of the biggest problems you face when you start accumulating debt you can’t pay is harassment from creditors. You may receive phone calls day in and day out – even multiple times a day. You may get called at home and at work. If your creditors break the rules, they may even talk to your neighbors, co-workers, family, or friends, or they might call you very early in the morning or very late at night. You may dread answering your phone or checking your email. When you file for bankruptcy in Glendale, you trigger what is known as the “automatic stay.” The stay puts an immediate stop to any contact from any of your creditors. You may be contacted by a creditor or two who didn’t update their information quickly enough with their call centers. But after you let them know you have filed for bankruptcy  you shouldn’t hear from them again. If you do, you can take action against them.  Saves Your House If you let your credit problem go, you may have to start selling assets. You may not have any other recourse if you don’t take steps before then. If you own your home, that may mean eventually selling your house – either to downgrade to something cheaper or to move in with family or make some other arrangement. If you file for bankruptcy, you can keep your house. Chapter 7 bankruptcy in Mesa allows for a homestead exemption. So, unless you own a very expensive house outright, your house will not be seized to pay creditors. If you have fallen behind on your mortgage, you can file for Mesa Chapter 13 bankruptcy to include the amount you owe in a debt repayment plan. You’ll save your house from foreclosure and deal with your debt problem at the same time.  Saves Your Retirement Accounts Instead of selling your assets to pay your debts, you may think to cash in your retirement accounts to pay off your debts. However, doing so would be a big mistake. You’ll only be pushing your problem down the road – you may pay off your debts, but you’ll find yourself without the resources you need when you retire, creating a financial crisis when you have fewer solutions.  Fortunately, retirement accounts are among the assets that you can exempt from a bankruptcy filing. You don’t have to worry that creditors will take legal action against you and seize your account. You can file for bankruptcy and protect your retirement savings while eliminating your debt or making it more manageable.  Bankruptcy can help you take control of your finances, rather than waiting until your creditors are taking action against you and you no longer have any choices. Talk with a bankruptcy attorney serving Gilbert to determine how bankruptcy can help you get maximum debt relief and allow you to reach your financial goals.  My AZ lawyers are ready to help if you live in Mesa, Glendale, Tucson, Phoenix, or the surrounding area. An experienced and dedicated bankruptcy attorney from our team will help you understand your rights and responsibilities under bankruptcy law, as well as how bankruptcy can help you gain the freedom you seek from overwhelming debt. We represent individuals interested in Chapter 7 bankruptcy or Chapter 13 bankruptcy, as well as businesses. Call our bankruptcy law office to schedule a consultation today. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: info@myazlawyers.com Website: http://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Bankruptcy Last Resort or Secret Weapon appeared first on My AZ Lawyers.

This article originally appeared on August 10, 2020 at https://www.studyfinds.org/quarter-americans-missed-bill-payment-covid-19/----------------Tough for many these days, and a new survey shows that Americans are cutting costs or even adopting a ‘minimalistic’ lifestyle to make ends meet. NEW YORK — From our social lives to professional careers, life as we know it has shifted since the beginning of 2020. Well, almost everything; millions may have lost their jobs due to COVID-19, but that doesn’t mean the bills have stopped coming. Indeed, paying off bills are an unavoidable part of life, even during a pandemic. Unfortunately, a new survey of 2,000 Americans finds that one in four (24%) have already missed at least one payment since the pandemic began.Among that group, 26% say they haven’t paid their cell phone or cable bills. Another 25% failed to pay for streaming services, and perhaps more worryingly, some of their electricity or utilities bills.On average, Americans who admit to skipping a bill payment have missed five bills altogether.Commissioned by EnergyBot, the survey set out to gauge just how much COVID-19 has dealt a blow to Americans financially. Predictably, money is a big concern these days. In fact, 63% say they’re “always” worried about paying all their bills right now. Similarly, 58% are battling extra stress over their bills since the pandemic started.Ways we’re cutting backWith those last stats in mind, it makes sense then that 65% of respondents admit they’ve had to make some sacrifices lately to make ends meet. What type of sacrifices are we talking about? Many have cancelled subscription services (38%) and gym memberships (39%). Others are cutting costs by no longer ordering takeout food (35%).All in all, 52% say they only buy the “essentials” these days. Another 43% are no longer buying premium quality goods (toilet paper, gas) in an effort to save some cash. Some are adopting new lifestyles: 41% say they’re following “minimalistic” approach to life.Moreover, about two in five people never use their credit card anymore because it encourages them to spend more.Raiding retirement to pay off billsA third of Americans have also been forced to dip into their savings accounts because of COVID-19. On that note, 55% of respondents often feel “overwhelmed” by just how much the coronavirus has changed their financial footing.Even small expenses, like repairing a broken home appliance, just aren’t possible right now. A significant portion of respondents (35%) have learned to live without a broken appliance because they just can’t afford to fix it. Meanwhile, 68% have tried to fix the appliance themselves (or asked a spouse to fix it). Others (33%) have used some of their savings to solve such issues when they were unable to fix the item themselves.Another 37% say, however, that they wouldn’t even have enough savings to fix appliances if they were to break.A few other common ways Americans are saving money through this pandemic are: turning off lights when they’re not needed (62%); turning off appliances when they’re not being used (46%); closing windows/doors when the heat is on (42%); opening the windows instead of using AC (36%); and using blinds to adjust room temperature (33%).

Lawyer to Help with My Car Lease in Bankruptcy So you’ve decided you need to file bankruptcy and you happen to be leasing a car. This article will go over your four options concerning the disposition of your car lease. Bankruptcy law is nuanced in that it varies state-to-state. This article will give you a broad outline of your rights and responsibilities if you have a car lease, and you file bankruptcy. However, the law and facts of your particular situation should be reviewed by an experienced bankruptcy attorney so that you can be sure you are going to get the outcome you intend. If you are in Philadelphia or the surrounding areas, give us a call at (215) 625-9600. We have helped thousands of people just like you straighten out their finances. We will discuss all of your available options during your free, no-obligation consultation, and help you decide what course of action is best for you. Option #1 – You Can No Longer Afford the Lease and Want to Surrender Your Car Unfortunately, this is all too common. A while ago, you were making good money and leased a car you thought you could afford. Now your hours have been cut, or you are on unemployment, and the lease payment is just too much. What is “Surrender” in Chapter 7 Bankruptcy? If you file a Chapter 7 petition, you can “surrender” the car to the lessor and have the remainder of the lease discharged as unsecured debt. This means you give the car up and walk away with no debt under the lease. Also, you can get your other unsecured debt, such as credit card debt or medical debt, discharged at the same time. What will Filing Chapter 7 Bankruptcy Do to My Credit? While the fact that you filed a bankruptcy petition can remain on your credit report up to ten years, most Chapter 7 debtors find that their credit score rises shortly after their bankruptcy case closes because their debt-to-income ratio has improved. Also, while there are credit ramifications to filing a bankruptcy petition, defaulting on your lease and forcing the lessor to repossess the car hurts your credit too. Which would you prefer? Option #2 – You Can Afford Your Lease but Only if You Do Not Have To Repay Your Unsecured Debt If unexpected expenses arise, such as uninsured or unreimbursed medical expenses, divorce, or job reduction or loss, you may be able to continue to pay your monthly car lease payments if you get those expenses discharged in bankruptcy. What is “Assuming” a Lease in Chapter 7 Bankruptcy? By filing Chapter 7, you can have credit card debt, medical expenses, and some income taxes discharged but keep your leased car by “assuming” the lease, meaning, you agree to the terms of the lease and continue paying, while the lessor’s rights are in no way affected by your bankruptcy filing. Beware of Bankruptcy Fraud Regarding Car Leases Keep in mind that if you leased a luxury vehicle shortly before filing bankruptcy expecting to keep that vehicle but to get out of paying your other creditors, that won’t work. Not only will the Trustee or your other creditors object to the discharge, but you may find that your Bankruptcy case winds up being dismissed for not being filed in good faith. Chapter 7 is for the honest but unfortunate debtor who, through no fault of his or her own, is in financial distress. While you can’t expect to profit from bankruptcy by driving away from all of your unsecured debt in your luxury vehicle, you can expect help with unaffordable debt when you really need it, and be able to keep your car. Option #3 – You are Behind in Paying Lease Payments But Can Afford to Catch Up Now If you’ve fallen behind in your lease payments, but your circumstances have changed and you could afford to repay the arrears if given the chance to do so over time, Chapter 13 is for you. What Happens to a Car Lease in a Chapter 13? Chapter 13 is a 3- to 5-year repayment plan where you pay the Trustee every month, and the Trustee in turn pays your lessor. At the end of your plan, your lease arrears are all paid up, and your unpaid unsecured debt is discharged. You Can Catch Up On Many Kinds of Debt With Chapter 13 A Chapter 13 plan can also be used to pay mortgage arrears, past due child support or alimony, past due student loan payments, and past due government fines and fees that are not dischargeable. You May Be Able to Pay Your Bankruptcy Attorney’s Fee Through Your Chapter 13 Plan Chapter 13 is for those who have steady income, but perhaps you do not have enough in a lump sum to pay your filing fee and attorney fee. Don’t worry. You can still afford to retain an experienced Chapter 13 bankruptcy lawyer. We allow our clients to pay their attorney fee over time, through their Chapter 13 plan. Contact us to see how we can help you keep your car and repay whatever other arrears you have, over time. Option #4 – You Have Reached the End of Your Lease, You Want to Keep the Car, But You Can Not Afford to Pay the Entire Balloon Payment Many leases conclude with a balloon payment, which is a payment you must make if you want to own the car after the lease term ends. While this is not often a good deal, if you are fond of the car and need it, in many cases you are able to pay that balloon payment over a 3- to 5-year Chapter 13 plan and own your car when the plan is complete. Again, your unsecured debt will be discharged as well. If you think this may be a good option for you, when we meet for your consultation, we will discuss why you want to keep the car as well as it’s value now and projected value at the conclusion of the plan. It may be that once we crunch the numbers together you won’t want to keep the car past the end of the lease term, but know that you have a number of options when you file a Chapter 13 case. Experienced Bankruptcy Attorney in Philadelphia will Help You With Your Car Lease in Bankruptcy If you are worried about paying your car lease or about paying your other debt, let us help you. Contact us to schedule your free, no-obligation consultation. When we meet, we will take a look at your entire financial situation and help you get the best possible result from your bankruptcy filing, including resolving your car lease problem. Let us help you get a fresh start. The post What Happens to Your Car Lease in Bankruptcy appeared first on David M. Offen, Attorney at Law.

A $3500 loan at 29% interest grows to a $45,000 garnishment. How fast does at debt at 29% interest add up? For Wilson a $3500 loan grew to a $45,000 garnishment in ten years. Wilson borrowed $3500 from a Finance Company in 2004.  He took out that loan to pay off some collections and raise […] The post $45,000 garnishment from a $3,500 29% interest loan by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

As the Covid-19 pandemic rages on plenty of Americans find themselves with debts they can’t pay. Average treatment costs are between $1000 and $2000, more than enough to send most families into a financial tailspin. Some have gone higher, with news sources reporting numbers like $34,000 or $1.1 million. Given many people are furloughed, out […] The post 4 Mistakes to Avoid if You Live in Philadelphia and Have Medical Debts appeared first on .