In baseball, a batter gets three strikes, then he’s out. It doesn’t quite work that way with bankruptcy. Take our clients Aaron and Wendy. They filed a Chapter 13 bankruptcy and their bankruptcy was dismissed. They weren’t able for different reasons to make their plan payments for the complete plan, and wanted to start over. Aaron and Wendy could have filed a Chapter 13 bankruptcy again (and they did). However, the bankruptcy code puts in rules when someone has two bankruptcies open in the same year. These rules affect the “automatic stay”, the protection you get when filing for bankruptcy. This is the protection that tells creditors to stop foreclosures, wage garnishments, car repossessions, and lawsuits. The automatic stay is good for the full bankruptcy unless the court gives permission to a creditor to get around it. So if you stop paying on your mortgage for four months, the mortgage company can ask the court to let them out of the protection so they can foreclose. But when one case was dismissed (or discharged and finalized), then another case is filed, the automatic stay protection only lasts for 30 days. To make it stay for the whole bankruptcy again, you have to ask the judge to continue or extend it and explain why. To get what we wanted in court, we had to do what the courts ask when we need to ask for something – we filed a motion. We filed the motion for Wendy and Aaron to continue their bankruptcy protection throughout their new bankruptcy. In our explanation, we included their statements about why their last case didn’t work but this case would be more successful. Sometimes that is enough for the court to agree and for creditors to stay quiet and not object or fight it. Sometimes the judge wants to hear an explanation in person. That’s what happened here. The judge listened and agreed that this case was filed in good faith and not simply another way to stall and avoid creditors. So she agreed and now our clients are protected again. If you’ve had one case (or more) dismissed and want to re-file, you’ll want a lawyer to explain how to keep that automatic stay and protect yourself from creditors. Call 847-249-9100 or 262-694-7300 in Wisconsin, or e-mail us to see what we can do to make sure you keep the automatic stay in a new bankruptcy filing.
It’s easy to be confused when talking about the different types of bankruptcy. Most people are aware that bankruptcy is a way to eliminate debt. What they are not sure of, is whether it’s really in their best interest to file at all. There are some cases where it’s a tough decision. The person may+ Read MoreThe post There Are Different Types Of Bankruptcy appeared first on David M. Siegel.
Clients want to file a chapter 7 bankruptcy to clear up credit card debt and get a fresh start. Credit union customers are shocked to learn that their credit cards with a local credit union are tied together with their car loans at the same credit union. Credit unions frequently use “cross-collateralization.” This means that your car or house not only secures your car note or house mortgage but also your credit card debts at the credit union. Normally, when you borrow a large sum of money from a bank, you give a lien on the item known as collateral. So if you borrow money to purchase a vehicle, the lender keeps the title top the car until you pay off the loan. If you default on the car loan, then the bank could enforce its lien by taking it back. A loan with a credit union to purchase a vehicle works differently with a cross-collateralization clause. This provision has the effect of making your vehicle the collateral for all present and future loans with the credit union. So if you have a vehicle loan with your credit union and a credit card, the credit union can take back your car even if you just stop paying on the credit card. In bankruptcy, the credit union has two secured loans; the vehicle loan and the credit card. That means, if you want to keep the vehicle in a Chapter 7 bankruptcy, you have to reaffirm the vehicle loan AND the credit card. If you don’t reaffirm the credit card, then the credit union could repossess the vehicle. You could still get rid of personal liability on both the credit card and vehicle loan, but would no longer have a car to drive. One alternative to this dilemma is to redeem the vehicle. The Bankruptcy Code lets debtors in Chapter 7 pay the secured creditor the fair market value of the vehicle in one lump sum – the present value of the car. This is a good option when the vehicle is worth much less than the total amount of debt securing the vehicle. If the vehicle is newer this is likely not a good option. Most debtors in bankruptcy will not have enough cash to make a lump sum payment. Sometimes we can actually refinance the debt using a tool called “redemption financing”. If the vehicle loan was signed more than 910 days before the bankruptcy was filed, you can file a Chapter 13 and propose to pay the fair market value of the vehicle over the term of the plan, either 3 or 5 years, at a little over the current prime interest rate. The remaining balance on the vehicle loan and credit card would be paid a small percent of the balance as an unsecured creditor in the plan. As with most things in bankruptcy, it is helpful to have an attorney guide you through the process and determine the best course of action for dealing with the credit union. To avoid this situation in the future, I always advise my clients not to have more than one loan, whether secured or unsecured, with a credit union.
Chapter 7: Time To File? David Siegel: When would somebody want to file a Chapter 7 bankruptcy as opposed to not filing at all? What is the reason why someone would file a Chapter 7? Jesse Barrientes: I guess there are a lot of different reasons. One would be for example if somebody filed a+ Read MoreThe post Bankruptcy & The Right Time To File appeared first on David M. Siegel.
Baby Boomers are signing up for reverse mortgages at record levels. They’ve taken out $15.3 billion worth in 2013, an increase of 20 percent from the year before. Baby boomers who have saved nothing for retirement – almost 77 million of whom are going to retire fuel growth in reverse mortgages. Just because boomers are getting reverse mortgages, it doesn’t mean that they are getting out of their debts. Bankruptcy remains the best and surest way to eliminate debt and secure a retirement free from hounding debt collectors. If you are thinking about a reverse mortgage, call us at Lakelaw 847 249 9100 to discuss how it fits into your overall scheme. Remember that these are high-fee loans. Remember that you will lose all equity in your house. Remember that you’ll have nothing to pass on to your loved-ones and nothing to show for your years and years of hard work. Just because Henry Winkler looks so sincere in TV ads hawking reverse mortgages doesn’t mean that its the right thing for you. Ask us to tell you the whole truth about reverse mortgages. You may be able to keep possession of your house but from an economic standpoint, it won’t be yours – it will be the bank’s. Don’t forget this.
Effective June 1, the filing fees increase to: Chapter 7 $335.00 Chapter 13: $310.00 Chapter 11: $1,717.00 Chapter 12: $275.00 Chapter 9: $1,717.00 Chapter 15: $1,717.00 Adversary complaint $350.00
In the last article I touched briefly on whether or not you could continue to make payments on property used as collateral without having to reaffirm the debt with the lender. To understand your options with regard to personal property used as collateral, I will be using the example of a car loan.The post What To Do With Property Used As Collateral During Your Bankruptcy appeared first on Tucson Bankruptcy Attorney.
Larry E. Kelly who served as U.S. Bankruptcy Judge for the Western District of Texas from 1986-2007, passed away on March 19, 2014. Chief Bankruptcy Judge Ronald B. King announced the news to the bar. It is my sad duty to inform you that Judge Larry Kelly passed away this morning before 7:00 a.m. I am in Waco today and he was too sick to see me yesterday, but I was planning to try again today. Needless to say, we have suffered a big loss. Larry was such a huge part of our court since 1986 when he began his tenure as a bankruptcy judge and became chief judge in 1988. He retired from the bench in February, 2007, but practiced law and taught at Baylor until last fall and actually finished grading his final exams two weeks ago.Judge Kelly's obituary can be viewed here. His funeral will be on Saturday March 22, 2014 at 10:00 a.m. at First United Methodist Church of Waco, 4901 Cobbs Dr, Waco, TX 76710.A short article that I wrote at the time of Judge Kelly's retirement in 2007 appears below. I plan to write more after the memorial service.Judge Kelly’s tenure spanned a period of great change in the Western District. When Judge Kelly was appointed in 1986, judicial pay was low and the hours were long. As one of only two bankruptcy judges, Judge Kelly along with Judge Ayers covered a territory larger than most states. During the tumultuous 1980s, business bankruptcies made up 20% of the docket with the attendant demands on court time.During his years on the bench, Judge Kelly handled many large and notorious cases in the Austin Division. These included former Governor John B. Connally, homebuilder Nash Phillips/Copus, Inc., Circle C Joint Venture, Mr. Gattis, Inc. and Great Hills Baptist Church. He also tried the litigation over the failed merger between El Paso Electric Company and Central & South West Corporation. Judge Kelly was a colorful presence on the bench. His trademark phrase of “Let me tell you where I’m at” was used to speed resolution of cases. When offering advice on how something could be done better, he often prefaced his remarks with “In my twelve years of practice …” (a phrase which became less frequent as his time on the bench eclipsed his years as a practicing attorney). Judge Kelly encouraged lawyers to a higher standard of practice and was concerned about how the bankruptcy system was viewed by the general public. He would often comment about how a particular situation would look to the folks in “Warshington,” a concern which became more prominent as bankruptcy reform was in the spotlight for nearly ten years. He took great pains to insist that disclosure statements actually contain meaningful information and that plans set out the mechanics of how they would work. He expressed great frustration with lawyers who would submit ambiguous pleadings and orders and then ask the court to decide what they had meant. He is rumored to have commented that Larry Kelly the lawyer would not have fared well in front of Larry Kelly the judge. Judge Kelly’s most lasting contribution will likely be his emphasis on technology. He pushed and prodded the Western District into being the first district in the nation to go live with electronic filing in 2001. He also was one of the first bankruptcy judges to use video court to better serve his far-flung divisions. Judge Kelly’s retirement marks the end of an era. It has been 17 years since the last vacancy on the Western District Bankruptcy bench.
Protecting Your Assets In A Chapter 7 Bankruptcy Filing There are two main goals in filing a chapter 7 bankruptcy. The first goal is to eliminate as much debt as possible in order to get a fresh start. The second goal is to protect either all or as much of your personal property as possible+ Read MoreThe post Protecting Your Assets In A Chapter 7 Bankruptcy Filing appeared first on David M. Siegel.
David Siegel: Hello, welcome. My name is David Siegel. Thanks for joining me. Today were going to be talking about Chapter 7 bankruptcy. Once again, my co-host as always is Jesse Barrientes. Jesse, welcome to the show. Jesse Barrientes: Thank you, Dave. David Siegel: How are you doing today? Jesse Barrientes: Excellent, how about yourself? David Siegel: I’m doing+ Read MoreThe post What Is Chapter 7 Bankruptcy In A Nut Shell? appeared first on David M. Siegel.