Category Archives: blog

Is Bankruptcy Scary?

Of course, when you don’t know anything about bankruptcy,

Bankruptcy - not scary
Bankruptcy – not as scary as zombie apocalypse

or, worse, you have read inaccurate stuff online.

Thanks to my friend Cathy Moran for the idea for the theme today.

Filing Bankruptcy Means I Failed

Well, lots of people filed bankruptcy who are considered great successes. Walt Disney and Larry King, for two.

Nothing is more American than giving someone a second chance, and that is what bankruptcy does.

Guilt or shame is voluntary, if you want it.  It is NOT part of the process.

Most bankruptcy filings are caused by events outside the control of the consumer, that is, you.

Illness, layoff, failed business, either yours, or, your employers.

Yeah, some people just borrow too much money, but, why did the creditors lend it to them?

Bankruptcy filings correlate with consumer debt.  When lending goes up, so do bankruptcy filings.

I Will Never Have Good Credit Again!

What everyone asks.  When will I be able to borrow money again?

Not that it is something we should do, but.

Everyone is a better credit risk AFTER filing bankruptcy and discharging debt, than before.

Think about it.

If you are considering bankruptcy, that means you do not have enough money to pay the debt you have now.

No one will lend you more money if you cannot afford to repay the debt you already have.

And, you cannot file Chapter 7 bankruptcy again for 8 years, so, the creditor knows, you will not be able to discharge a debt in that time.

Will you pay higher interest than if you had not filed bankruptcy?

No, not really, because, if you had not filed, you would still have all that debt.

Everyone Will Know!

Well, filing bankruptcy is a public record in a federal court.

But only your creditors and some government agencies, like the IRS, are notified of your filing.

Anyone else would have to look it up.  Why would they do that?

What is really scary is, not filing bankruptcy when you have no way to repay your debts, when you are facing foreclosures and repossessions and garnishments.

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Consumer Bankruptcy Updates

Bankruptcy news

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

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?

bankruptcy FRAUDtarget

  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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