Category Archives: blog

Consumer Bankruptcy Updates

Well, updating the last post, Teresa Giudice won the motion to

Bankruptcy news
Laugh In DVD
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approve the settlement splitting proceeds of her yet to conclude

malpractice lawsuit against her bankruptcy attorney with her

creditors.

What’s the Bankruptcy News?

Rowan & Martin’s Laugh In TV had a weekly sketch: “What’s the news?”

so that is why I stuck the picture in this post.

The U. S. Trustee is part of the Department of Justice, charged with overseeing all the bankruptcy cases in the country.

It seems that in California, they do not have enough to do, as they were investigating successful Chapter 13 cases, debtors who finished their payments according to the plan confirmed by the bankruptcy court.

I agree with my friend Cathy Moran.  Why are they worried about cases that are working?

Like any government agency, when they investigate, they have to find something wrong to justify the investigation, and then force changes that are of dubious value.

It seems they assumed Chapter 13 bankruptcy debtors were lying about the value of their property, in order to pay creditors less.

The creditors, of course, are free to look out for themselves.  And every Chapter 13 bankruptcy has a Chapter 13 bankruptcy trustee, who looks for these kind of things.

Nevertheless, Cathy Moran now has to:

There’s no reason to think that the results of the analysis would have been different had the trustee accumulated more paper in the file.  No finding that the facts were actually different than the debtor represented.  Just not enough paper.

So local practice will now require third party opinions of value even for underwater real estate, additional declarations, longer 341 meetings.  The list of new procedures, required questions, and supporting paper filled five pages.  Trees will die needlessly.

More Consumer Bankruptcy News

Debt relief scams.  “The Secret the Credit Card Companies Don’t Want You To Know”  “New Federal Government Program!” some of my favorite scam slogans.  Don’t waste your money on a bankruptcy attorney!

When it sounds too good to be true, it is.

Timothy McCallan may be the king of the debt relief scammers.

Thousands of customers signed up for debt settlement services offered by McCallan and paid him more than $100,000,000. Almost none of the money was paid to creditors of the customers as promised by McCallan,” U.S. Bankruptcy Judge William R. Sawyer wrote in an opinion entered in February.

Some good news, bankruptcy can be good for you!

Just ask Tommy Hilfiger about his bankruptcy.

“I was bankrupt when I was under 25 years old. I was in my mid-20s with my first business,” Hilfiger says.

“That was the best learning experience I ever had,” he says. “It was my MBA.”

. . . . . . . . .

Business was booming, and Hilfiger decided to forego college and start opening new stores across the state.

But soon after, Hilfiger’s accountant told him that the company had run out of money and that he needed to file for Chapter 11 bankruptcy.

It was a turning point that forced Hilfiger to get serious about business.

“Some people learn a lesson and then make the same mistake again,” he says. “I tried very hard not to make the same mistake twice.”

The near crisis taught him an important lesson about money: You have to know your company’s numbers inside and out.

Same goes for us, as consumers.  We need to know our numbers, inside and out.

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Student Loan Discharges and IBR

Many bankruptcy court judges, including some  in Detroit, Michigan, look at whether a bankruptcy debtor is in, or has applied for, an Income Based Repayment (IBR) plan for government student loans, when a debtor is trying to discharge his student loans. I blog about getting caught in that web of student loan debt on this,Continue Reading

Zombie Debt Autopsy – Two

I wrote about zombie debt collectors last week.   But there is so much more to the horror! If you can stomach it, the complete CFPB (Consumer Protection Finance Bureau) consent order against zombie debt collectors is here. As lawyers, we only know what our clients tell us. We have a duty to investigate, reasonably, especiallyContinue Reading

Filing Bankruptcy Is Good For – Your Health!

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No, really!  I would not make this up, though it does NOT surprise me: In a working paper released Monday by the National Bureau of Economic Research, economists Will Dobbie and Jae Song examine 500,000 bankruptcy filings in the United States to measure the effect of bankruptcy laws on consumers. They found that the bankruptcyContinue Reading

Creditor Abuse Of Consumers

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I know this is a bankruptcy blog, which is a way  to get rid of most, if not all, creditors. But these creditor abuse stories just keep coming and coming. First up this week:  Sub-prime credit cards Sub-prime cards are those with small limits, for people with, bad credit. Lots of them are folks whoContinue Reading

Is It OK To Break Your Promise To Pay In Bankruptcy?

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Are all promises created equal? Are they binding forever? Detroit’s municipal bankruptcy case can help us think about choices when you’ve promised more than you can deliver. Individuals with overwhelming bills often resist the thought of filing bankruptcy because they’ve promised to pay their creditors. Breaking that promise and discharging their debts makes them deeplyContinue Reading

Bankruptcy Fraud – Can You Make A Deal?

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  Bankruptcy fraud claims can be settled like virtually any other legal claim. Trying to get off the hot seat now is former Michigan State, among other stops, head football coach John L. Smith. Sorry, Spartan fans, I can’t resist. Mr. Smith took over last season at Arkansas after their married coach fell off hisContinue Reading

Bankruptcy And Kevin Costner?

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  Yeah, that Kevin Costner, the guy who danced with the wolves. Not in bankruptcy, no, but, being sued in bankruptcy court. How can you be sued in bankruptcy court? One way, is to try to get money from a person, or company, that filed bankruptcy.  Or, in this case, sue someone who has aContinue ReadingContinue Reading

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Bankruptcy and 401(k) Accounts

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401   accounts are exempt in bankruptcy cases.  That is, you can file Chapter 7 bankruptcy, and keep the money in your 401(k) account. Creditors CANNOT GET IT. What could be better than tax free savings?  Why, tax free savings that creditors cannot grab. Yet, one in four American workers with a 401(k) account borrowsContinue ReadingContinue Reading

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Bankruptcy: How Many Times Can I File?

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       Well, if you are Donald Trump, you just keep filing bankruptcy.  Actually, The Donald never files, just his companies.  His casinos have filed multiple times.  But, those were all Chapter 11 bankruptcies, like the latest one linked to above. What about Chapter 7 bankruptcy?  Is it one and done? No, it is not. Continue ReadingContinue Reading

9 Responses to Bankruptcy: How Many Times Can I File?

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