Bankruptcy Help on the Way for Student Loan Borrowers

At long last, it appears that Congress is looking to help the millions of people saddled with student loan debt that they have no hope of ever totally repaying.   That help is coming through the bankruptcy laws being changed to make it possible to discharge (wipe out) those loans through bankruptcy proceedings.

Student loan debt has been a tremendous problem nationwide.  It is estimated that as many as forty-four million Americans owe more than $1.5 trillion in outstanding student loans.  That makes student loan debt second only to credit card debt as the highest category of debts owed by Americans.  The sponsor of the proposed legislation, Sen. Dick Durbin, hopes that it can be an escape clause for student loan borrowers who, he says, carry their student loan debts to their graves. [Read more…]

What Is The Importance Of My Credit Rating?

Calculator and graphing paperYou are surely aware that the three major credit reporting agencies (CRAs), also known as the credit bureaus, have a lot of power over whether you can get financing for vehicles, homes, and other credit transactions.  But you may not know how the CRAs get the information for your credit report, or what your credit score really means.  Since consumer credit history, scores, and reports are extremely important in your life, you need to make sure that you understand them and what you can do about them if they are not reporting accurately.

When you apply for credit, the potential lender goes to the three main credit bureaus, (Equifax, Experian, and TransUnion), to review your credit report.  There are many other CRAs as well, but these three have emerged as the primary sources of credit reports.  Your credit report contains information about your bill payment history, current loans and debts, and other financial information.  It usually also states your current address and the name of your employer, as well as past addresses and employers.  Finally, a credit report may include whether you’ve been sued in the past or filed for bankruptcy. Negative information about you can stay on your credit report for seven to ten years.

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Does the Automatic Stay in the Bankruptcy Law Prevent a Landlord from Being Able to Evict the Tenant on a Residential Lease?

You are probably aware that when you file a bankruptcy, an “automatic stay” goes into effect right away, which means that none of your creditors can take any further action against you without first getting the approval of the bankruptcy court.  Therefore, if anyone is suing you, that lawsuit has to stop and, if it’s for money damages against you, will most likely be dismissed.  Even if you are in the middle of a divorce action, those proceedings are frozen during the pendency of the bankruptcy action, or at least until an order of relief from stay to go forward is granted by the Bankruptcy Court.

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What Can You Do with a Car That the Lender Refuses to Take Back?

Many people, when filing bankruptcy, want to give back (surrender) their vehicles to the lender who holds their car loans.  The theory is that the lender will take possession and then re-sell the car, and the debtor will get a discharge of that entire debt in the bankruptcy.   If a chapter 7 debtor states on his Statement of Intention that he is surrendering the vehicle, then the debt will be wiped out when the bankruptcy is discharged.

The problem arises when the car is worth significantly less than what’s owed to the lender, and therefore the lender refuses to accept the car back.  You now have the car, but the lender is holding the title.  You can’t sell or trash the car without the title, and — guess what– the lender doesn’t want to give up the title unless you pay what you owe!  Neat little game they’ve got going there, isn’t it?  What can you now do with the car?  Unfortunately, it’s a scenario that’s been playing out frequently over the past few years.

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Can Non-Citizens File Bankruptcy?

There is a lot of discussion now about whether people from foreign countries who live and work in the United States without seeking citizenship should be entitled to the same rights as citizens. Since these non-citizens are consumers who almost certainly will accumulate debt, they may wonder if they can seek relief from their debts under the bankruptcy laws, or whether that right is specifically limited to people who are citizens.

Actually, the bankruptcy laws allow non-citizens to file. The Bankruptcy Code defines “a debtor” as “a person that resides or has a domicile, place of business, or property in the United States,” without requiring that person be a citizen. Therefore, the right to seek relief under the bankruptcy laws is available to both citizens and non-citizens, so long as they can prove they make their home here.

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OBES CLAIMS IT OVERPAID MY UNEMPLOYMENT COMPENSATION, AND IS TRYING TO COLLECT IT BACK FROM ME. CAN A BANKRUPTCY HELP ME OUT?

The employment situation in Ohio was pretty bleak for the past few years. You may have found yourself out of a job with no replacement in sight and mounting bills that had to be paid. Or you may have employment that is seasonable, such as landscaping or construction, and have to rely on unemployment compensation to cover the periods when you’re not able to do your work. For whatever reason, you applied to the Ohio Bureau of Employment Services (OBES), and were awarded a weekly benefit amount. [Read more…]

PUT YOUR OXYGEN MASK ON FIRST

We’ve all heard the drill. As the plane is taking off, the stewardess cheerfully stands at the head of the aisle and warns you that if air is suddenly sucked out of the cabin, a little oxygen mask will drop magically before your eyes at the same time one is falling before your young child’s sweet little face.  But DON’T EVEN THINK [Read more…]

SHOULD YOU USE YOUR RETIREMENT PLAN TO PAY DEBTS?

We hear that the economy is “recovering”, but most people are still having a tough time, and the immediate future does not look too promising. You yourself may be surviving on credit cards to pay for your daily expenses, and are feeling anxious as the balances on those cards increases. On the other hand, you regularly receive statements on your 401(k) plan from your work, and see money just sitting there. The thought occurs to you to use that money to help you out of your current financial crisis. But is that a good idea? [Read more…]

What Should You Look For When Choosing A Bankruptcy Attorney?

Do you feel like your debts are getting away from you? Are you overwhelmed and anxious about paying your bills? Do you need some relief from your creditors? Are you beginning to think that you should be looking into filing a bankruptcy?

dollar-941246_1920Over the years, I’ve spoken to lots of people in your situation, who are just beginning to look into finding an attorney to help them with bankruptcy. Many of these people call with one question for me — “what’s y
our fee?”.   When I ask if they have any other questions about bankruptcy and how it works, they’re not interested. They want the cheapest attorney, no matter what kind of representation they get. [Read more…]

WHAT IS A CHAPTER 13 PLAN AND HOW DOES IT WORK?

Most people looking into filing a bankruptcy understand that a chapter 7 bankruptcy wipes out all the debts you want to get rid of, while allowing you to keep certain exempt assets. If you file under chapter 7 and have assets that are not protected by exemptions, then those assets are “liquidated” (sold) by the chapter 7 Trustee and the proceeds are divided among your creditors. That is why chapter 7 is known as the Liquidation chapter.

Chapter 13 bankruptcy is a bit more complicated for people to understand. It is known as the Individual’s Debt Adjustment chapter. There are times when a chapter 7 bankruptcy doesn’t serve your purposes. Although you need to deal with your debts to get them under control, there is some obstacle in your way, such as a paid-off vehicle that you need to keep to get you to work. That is a situation where a chapter 13 bankruptcy could be more beneficial to you than filing a chapter 7 where you would lose the vehicle to the Trustee/creditors. Another instance where a chapter 13 is helpful is if you’ve fallen several months behind in your mortgage payments, and need time to bring them current. A chapter 7 will not give you that time, but a chapter 13 will.   Further, if your income is over the median amount for your state, as set up by the Census Bureau, current bankruptcy law compels you to file under chapter 13 rather than 7. [Read more…]