Bankruptcy 101

Once again, I am a Paralegal not an Attorney. So this is not intent ended to be or taken as legal advice. This is legal information only. Also let’s not forget that when a lawyer or a paralegal becomes involved your problem or concern becomes an ISSUE .
Okay after a young pundit on the Cavuto show 1/16/2014 who probably never had to look for a job. Said and I quote said, “The unemployment gravy train is now over.” I think I need to take a step back and go deeper into what crazy republicans feel only bad, lazy no accounts use. That is until they need it.
BANKRUPTCY.
I am sorry, but I have got to wonder were someone who has always had some kind of ‘Daddy’s’ help gets off saying something like that.
First let’s talk a little Bankruptcy History. It was the Torrey Bill of 1898 which later became to be known as The Bankruptcy Act of 1898 which 1st allowed a private citizen to file for bankruptcy help. Not that you could get it just that you can file. It was the Bankruptcy Act of 1938 that opened the door for our current bankruptcy rights. Until than all bankruptcy laws strongly protected and favored corporations and the very wealthy.
Until then your creditor would be allowed to without warning or notification enter your home or small business seize anything they considered to have enough monetary value. They then could market the property and keep whatever they made. A lot of valued heirlooms were sold for pennies and people still went to jail for debt.
Congress had a moment of weakness during the Great Depression. Congress seemed to release that locking up debtors would cost more money than it recovers. Unfortunately too many rich corporate creditors decided that too many debtors using these bankruptcy laws where ‘escaping’ paying than money owed. So claiming they were preventing dead beat Dads from getting out of paying back child support they made a lot of other debts like student loans impossible to discharge under bankruptcy in 1978.
You know, with some of the things I’ve learned on the net, The Rachel Maddow and Ed show. I have got to wonder if some crazy republican is thinking about suggesting Debt slavery.
Debt Slavery to but it simply means you have to work for the corporation that pays off your debt. You will work for that corporation however long it takes that corporation to recoup the money you owe plus the money the corporation spent on you for the food you eat, the cloths the put you in and the cot you sleep on.
As a debt slave your owner gets to say how much you labor is worth. So you could find yourself working 16 plus hour days for 23 cents an hour. Let’s not forget they will be keeping the records so your owner will tell when or if you your debt has been paid off.
Next week, I’ll start getting into 3 major types of bankruptcies. Chapter 7, Chapter 13 and SCRA.

Congress Bankruptcy

A letter to Congress

A letter to Congress 

I found this great post on facebook and it got me thinking. I guess a lot of tea party republicans seem to believe that that worst comes to worst the federal government can just file for bankruptcy and everything will be cool. I wonder if any of these lawyers ever read the laws concerning bankruptcy.

First none of the debts I have seen listed on the news is dischargeable under Chapter 7.   I don’t think the United States Government can even apply for bankruptcy protection.  Would congress have to go to the United Nations for Bankruptcy protection? There was an article on a MSN new website that said if we default China our largest debt holder would foreclose on the United States.

 

Court Costs/ Bankruptcy 2

As before I am not a Lawyer I am a Paralegal. Also when a Lawyer or a Paralegal becomes involved your problem becomes an issue.

WARNING! When you make your 1st, 2nd, 3rd or last filing fee payment make damn sure that check will clear. If it bounces, it is a $53 fine. Plus, neither Trustee nor your Lawyer is gonna be happy with you if it bounces. So if you run into trouble talk to your lawyer or with the bankruptcy court clerk. If you keep them in the loop, the clerk or your lawyer may be able to get a payment rescheduled. Just remember the entire fee must be paid in full 180 days after you started your Bankruptcy. Also remember, if you get into serious trouble and can’t make your payments, talk to your lawyer you may now qualify for the full fee waiver.

Now this is a piece of friendly not legal advice. If you decide to go down this road make damn sure you got every single debt you owe listed and turned over to your Lawyer. There have been cases of Clients who kept certain debts back from their lawyers because they thought could manage this debt on the sly. Unfortunately everything crashes after they receive their discharge and their lawyer is forced to go back into their bankruptcy filing and add this debt. This costs the client another $245 in court costs. Not to mention what their lawyer charges for getting the right forms filled out and convincing the Trustee that their client isn’t playing games.

Seriously amending or adding debt to a Bankruptcy Discharge is meant for unforeseeable financial emergencies. For example if you suddenly find yourself hit with several thousand in unexpected medical bills after receiving your discharge; you can get them added to your bankruptcy.

All right than moving on to Chapter 13 Bankruptcy. A Chap. 13, basically means, ‘ I messed up give some time to get my shit together.’ The cost of a Chapter 13 bankruptcy breaks down as follows, $235 filing fee plus a $46 miscellaneous administrative fee. Don’t worry you will have the same options to get the filing fee paid as is in a Chapter. 7. Except for the fee waiver, the waiver is for souls with absolutely no income.
The way a Chapter 13 works is once again you list all your debts and assets. Plus how much you can reasonably pay, not comfortably pay, reasonably pay. What happens is your payments are given to the Trustee and she/he will give your debtors a portion of that money. You also will have given the Trustee a workable plan to get your finances back to where they needs to be so you can handle your debt.
Side-Note: A reasonable payment is how much you can give the Trustee and still keep your family fed and housed. Plus enough for a dinner and a movie every now and then. A comfortable payment lets you go out partying every weekend.
More about the Costs of Captor 13 next week.

Court Costs/Bankruptcy

I am not a Lawyer I am a Paralegal. Also when a Lawyer or a Paralegal becomes involved your problem or concern becomes an issue.
Okay there are two types of Bankruptcy used by the average person. The most well-known are Chapter 7, and Chapter 13. A Chapter 7 basically means

‘I ain’t got it and I can’t get it. Back off.’

When your bankruptcy is filed with the courts your creditors do have to back off but each and every one of your creditors must be officially notified of your Bankruptcy. This usually means a certified or registered letter through the post office. Most honest debt collectors will treat a telephone call as notification until they receive the official notification. If you have a lawyer her/his Firm will take care of that for you. Unfortunately Chapter 7 bankruptcy is where a lot of your valuable assets/possessions could be liquidated/sold to repay your creditors. If you own your own home or have specialized equipment that you need to keep or find a job PLEASE GOD SEE A LAWYER!!!!! A good lawyer will be able to help you protect at least some if not all of such assists/possessions.
Example: You are a Plumber and you just bought a brand new Cadillac. Your lawyer will be able to protect your work van and equipment but that Caddy you are so pleased with. So, sorry your shiny Caddy has to go back to the dealer. You’ll have to make do with a used mini-van for about a year.
If you really behind the 8-ball and if you take the time to look you can find a Bankruptcy Firm and Legal Aid group that will be willing to make their fees a part of your Bankruptcy debt. (They get a tax write off which balances the taxes paid on fees they charge rich people) However you will still have to come up with the Filing Fee. Currently the fee breakdown goes like this $245 case filing fee, $45 miscellaneous administrative fee and $16 Trustee surcharge. This is according to the United States Courts website. Bringing the total to start your Chapter 7 up to $306.
Don’t Panic! There is a way to break that $306 into manageable payments. It is just a matter of adding the right form to your bankruptcy petition. You will have to make the 1st payment when turn over your bankruptcy petition into the courts. In some cases your lawyer could get the whole fee waived. Also remember your protection officially doesn’t start until your bankruptcy petition is filed with the court.
Side-note: A petition is not a complaint. Simply put when you are filing a petition you are saying one of 2 things to the court. ‘I have this problem that I need your help with.’ or ‘this is a bad thing and I think you need to look into it.’

Next week I’ll talk about Chapter 13. Which simply put means ‘Give some room to get my act together.’