For the last 20 years, I’ve been drawing pictures and timelines to explain to my Chapter 7 bankruptcy clients how the process works. I finally decided to make a video and hope you find it helpful.
Obama’s mortgage modification program: on its way out?
Could the Obama Administration’s program to help American homeowners stay afloat be nearing the end of its usefulness? A committee of Washington Republicans assigned to oversee White House programs says this could be the case.
Soon after it became obvious that a major national financial crisis was looming on the horizon, the Obama Administration launched its Home Affordable Modification Program (HAMP), offering mortgage lenders financial incentive to restructure their customers’ payment plans. Although optimists predicted this program would stem the tide of sub-prime mortgage failures, it only ended up being temporarily effective: confusing paperwork, uninformed staffs, and poorly organized processes hopelessly confounded a large number of participants, many of whom ultimately failed to acquire long-term mortgage modification.
Newly elected Republican officials are expected to study and scrutinize many of the President’s recession-protection strategies, and thanks to its less-than-stellar performance, HAMP will probably make an easy target. “This program seems to have outlived its usefulness,” stated Darell Issa of the House Oversight and Government Reform Committee. In Issa’s opinion, the incentive program is yet another example of superfluous government intervention.
This allegation is not entirely without basis in reality. Although hopes ran high for HAMP, in truth the entire program was rushed and poorly planned from the beginning. Of the 500,000 homeowners granted temporary mortgage modifications under HAMP, only a miniscule fraction was approved for permanent modifications. In the long run, this left many further behind on their mortgage than they began.
Additionally, recent unemployment rates have been less than conducive for HAMP’s success. In recent years it has become impossible for much of the country to attain income levels capable of handling modified mortgages, let alone unadjusted ones.
The fact that HAMP has been associated with the robo-signing controversy only compounds problems. Republicans now blame Democratic regulators for not paying close enough attention to the foreclosure industry. Representative Robert Goodlatte is quoted in a recent hearing on Capitol Hill as demanding Democrats to “explain how the OCC [the agency in charge of overseeing the activity of America’s largest banks] …failed to detect that there were foreclosure documentation issues well before this turned into a crisis.”
Julie Williams, Chief counsel for the OCC, had little to say in response: “In hindsight, if we think about the volume of transactions that were going through the process, we could have been more suspicious.”
Mark Buckley is a Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, including problems with your mortgage, call Attorney Buckley at (401) 467-6800.
There are three areas in particular where this “duty to disclose” comes into play for those filing for bankruptcy.
(1) Duty to Disclose Pre-Bankruptcy Asset Transfers
Imagine you own a number of expensive assets (real estate, valuable jewelry, multiple cars, perhaps a boat) but have created considerable debt in acquiring them. Scared that you may lose something, you secretly transfer these items to a close relative before filing for bankruptcy, with the intent of taking them back after your debt has been eliminated. This would be considered fraud under bankruptcy law and could be grounds for the denial of your debt discharge. For this reason, you are required to alert your attorney of any and all transfers of interest in the period before you filed for bankruptcy.
(2) Duty to Disclose Payments Made Before Your Bankruptcy
You may or may not have been advised to avoid repaying loans to family and friends prior to filing for bankruptcy. This is partially because of your “duty to disclose” pre-bankruptcy payments, since repaying loans from family and friends in this context can also be considered as fraudulent. In repaying old debts, you have chosen a lesser priority “creditor” over another higher-priority creditor, an action that can have serious repercussions in bankruptcy court. For this reason, any pre-bankruptcy payments beyond what bankruptcy court considers “essential” must be disclosed to one’s bankruptcy attorney.
(3) Duty to Disclose Any Lawsuits
Your “duty to disclose” extends to payments you expect to receive as well. If you are currently involved in a lawsuit from which you expect to receive some form of financial settlement or compensation, you have an obligation to alert your bankruptcy attorney of your situation.
Bankruptcy is a complicated business, so consulting a qualified bankruptcy attorney is an intelligent move for any person struggling with excessive debt. A good bankruptcy attorney can help you make sense of bankruptcy law’s complex procedures and make the most of a difficult financial situation. The Law Offices of Mark Buckley offer free debt consultation and are a good place to start when looking for financial direction.
A common emotion for most Chapter 7 bankruptcy filers is REGRET. Not regret for filing bankruptcy, but regret for not seeking legal help earlier for their financial struggles.
This may sound self-serving coming from someone who has helped more than 3,000 clients in Rhode Island file for bankruptcy relief, but ask anyone who has filed a Chapter 7 bankruptcy. Most debtors waste time and money on weak attempts to solve an unfixable mess.
Recently, I spoke to married gentleman who hadn’t saved much for retirement. He sold his house a few years ago and put the $ 120,000 profit in the bank, hoping it would supplement the $ 40,000 kept in a 401k plan.
Over the years, he spent $ 80,000 of his precious savings and all of his 401k in order to pay substantial credit card debt. He still owes $ 37,000 and asked me if he could NOW file a Chapter 7 bankruptcy to discharge the remaining debt.
Under federal bankruptcy protection laws, he would have difficulty protecting his remaining $ 40,000 in the bank. Because the account is joint, he may be able to protect half, but the rest is fair game for the bankruptcy trustee to go after. Now in his 70′s, there is no way this retired man could afford to lose $ 20,000.
What went wrong? What should he have done?
If he had called me years ago, I would have explained how under Rhode Island law, he could have exempted all the equity in his modest home and still file bankruptcy to discharge his considerable credit card debt. I would have also explained how it almost never makes sense to liquidate qualified retirement assets to pay credit card obligations. Instead of taking a 10% penality on the early withdrawal, paying income tax on the gain, and forfeiting the future growth of the account, he should have known that bankruptcy exemption laws are quite generous in protecting retirement assets.
In other words, he could have kept his house and retirement account and discharged all his credit card debt . . . with ease!
It is unfortunate that he spent most of his life savings on debt that could have been eliminated with a simple Chapter 7 bankruptcy filing.
Here is my point. You may never want to, or need to, file for bankruptcy relief. But you should talk with a skilled bankruptcy lawyer who can explain all of your debt options.
So, when do you know its time to seek help? Do you have more than $10,000 in unsecured debt, are you robbing Peter to pay Paul, are debt collectors calling you at home or at work? If so, something is seriously wrong.
Bottom line: You would be surprised what you could learn from sitting with a qualified bankruptcy attorney. A good bankruptcy lawyer can offer a free consultation and patiently explain all of your debt-relief options.
Mark Buckley is a Rhode Island bankruptcy lawyer and the only RI bankruptcy attorney who is also a CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, call Mark at (401) 467-6800.
You may have been advised by experts to pay off high-interest debt before other expenses. In most cases, this advice is quite sound; however, did you know that there are certain times in which it is best to pay off debts with lower interest rates first? Don’t exhaust your limited resources without first prioritizing your debt obligations.
NerdWallet financial expert Tim Chen says, “When you have several different types of debts and your income isn’t quite keeping up with your total expenses, it can be tough to figure which debts to pay first. Ignoring high priority debts and focusing on less important ones may ultimately leave you in a worse situation than you were before. It’s often helpful for many people to have a table that lists their debts in order of highest priority to lowest.”
Here are some tips to help you re-prioritize your personal expenses?
First, start with secured debts—debts associated with assets that can be repossessed or otherwise seized. Your car and your house keep you moving, protected, and able to look for work, and as such they should be your first priority as far as protection is concerned. In the event that paying for even these most basic of priorities becomes untenable, Chapter 13 bankruptcy offers makes it possible to re-sort your finances, restructure your payments, and satisfy your creditors.
Deal with debts that can result in serious penalties second. Failing to pay off certain kinds of debt can result in serious penalties (including prison time.) Clearly, it is best to resolve these financial shortcomings as soon as possible.
The next debts to clear are those for services that require continued use. There are certain services that we simply cannot do without—electricity, running water, medical aid in the event of injury. Failing to recompense your doctor for his services will probably require you to find another, and late payment on utilities bring financial penalties with them. Although increasing numbers of doctors and utilities are willing to work with you on payment plans during these difficult economic times, you need to try to pay off debts associated with these services in a timely manner.
Finally, leave your unsecured debts (debts with no assets backing them) for last. Although the creditors of these debts may harass you while you make more pressing payments, they are unlikely—and in many cases unable—to repossess your property and more willing to work something out with you. If you still can’t cover your credit card debt after eliminating the first three varieties of debt, you should probably consider filing for Chapter 7 bankruptcy, which removes unsecured debt in order to allow you time to save for higher priority expenses.
Mark Buckley is a Rhode Island bankruptcy lawyer and the only RI bankruptcy attorney who is also a CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, call Mark at (401) 467-6800.
In all but a few isolated cases, student loans are not dischargeable in bankruptcy. However, this is not the case for student credit cards, which can be cleared of debt under Chapter 7 bankruptcy.
Banks and credit card companies are all too eager to cash in on the spending habits of American college students. College students tend to use credit cards indiscriminately, creating a profitable market as far as credit card companies are concerned. Meanwhile, banks use the college years to establish financial relationships with young adults.
The CARD Act, a recently passed motion to limit the marketing reach of lenders to students, established a minimum age at which a person can obtain a credit card. Unfortunately, this did not prevent credit card companies from discovering some very large loopholes in this new law.
For example, the CARD Act specified that people under 18 years old need cosigners in order to acquire cards. While this was intended to refer to parental permission and oversight, college teens twisted the word of the law in some serious ways, having older classmates or fraternity brothers function as cosigners. And all along, this activity was encouraged by those who made their livings selling plastic cards. While the CARD acts was intended to prevent credit card companies from selling their goods on campus, sellers managed to skirt that issue as well.
The evidence is telling: last year, Bank of America spent $62 million for the right to market their credit cards to kids on campus alumni associations. Meanwhile, at the University of Southern California alone, it invested $1.5 million in attracting almost 700 new accounts. Ultimately the total amount invested for all banks to get on college campuses in the past year alone amounted to over $82 million, creating 53,000 new accounts.
If you are a student struggling with credit card debt, bankruptcy can offer you a fresh start. Contact the Law Offices of Mark Buckley to schedule a free initial debt consultation.
Mark Buckley is a Rhode Island bankruptcy lawyer and the only RI bankruptcy attorney who is also a CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, call Mark at (401) 467-6800.
A percentage of callers always begin with that magic question: What do you charge for bankruptcy?
Price is always a fair question when it comes to hiring any professional. If I were paying a plumber to fix a toilet, or a dentist to pull a tooth, I want to know two things:
is he experienced to do the job
is his fee reasonable for my particular job
Sometimes you strike a good deal and sometimes you don’t. Hiring a bankruptcy lawyer is no different. Sit in on some bankruptcy hearings in Providence for a day and you will quickly discover that good bankruptcy lawyers know what they are doing, but many “general practice” lawyers do not.
So, back to the question of “price”. What do I charge for a Chapter 7 bankruptcy? It truly depends on what your case looks like. Its not like buying a gallon of gas where you just buy it from whoever is the cheapest. Bankruptcy is anything but a one-size-fits-all situation. Tell me your story first, we will explore all options, and if we are a good fit, I will quote you a price you can afford. (And yes, I do realize that if you had a lot of money, you wouldn’t be needing to call me. I get it.)
Filing for bankruptcy is a very complex process with specialized procedures tailored to your individual situation. Remember, your legal costs correspond to the complexity of your bankruptcy case. Fortunately, bankruptcy attorney fees are relatively inexpensive in comparison with the relief of having your debt cleared once and for all.
Another factor that will influence the amount of your bankruptcy attorney fee is thelength of timeyour case will take to run its course. Generally speaking, a more complicated case will take longer for a bankruptcy lawyer to see through, resulting in higher prices than would be charged for a short, simple case. Easy cases should be done quickly and inexpensively. That is why I charge the lowest fee to a senior citizen, living on Social Security, with no real estate and only a few credit cards.
The costliness of your legal fees also depends on the size and volume of your assets and debts. In most cases, your legal bills will be lower the fewer assets, properties, cars, investments, and debts you have accrued. The Law Offices of Mark Buckley can provide an initial consultation to determine the value of your assets, and, consequently, determine the cost of your bankruptcy case.
Lastly, the amount of money you pay to file for bankruptcy is directly related to the type of bankruptcy you file under. When a client files bankruptcy under Chapter 13 of the US Bankruptcy Code, for example, his attorney can put the majority of his attorney fee in the Chapter 13 plan, a payment scheme that demands less money up front from the person filing.
As a RI bankruptcy lawyer practicing for 20 years, I have counseled thousands of good people struggling with bad debt problems. If you are getting collection calls, being sued for wage attachment, or just simply getting close to your breaking point, its time to call a professional.
Mark Buckley is a Rhode Island bankruptcy lawyer and the only RI bankruptcy attorney who is also a CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, call Mark at (401) 467-6800.
“An increasing number of Americans aged 65 and older are declaring bankruptcy,” writes Reuters in a recent report. “Those aged 65 and older represented seven percent of bankruptcy filers in 2007, a mind-boggling jump from 1991. They are easily the ‘fastest-growing age demographic…’”
The sad fact is that many older Americans cannot help living beyond their means. Age discrimination, paired with fewer job openings, makes it almost impossible to increase their income. American seniors are dealing with an unsettled economy, decreasing pensions, increasing medical expenses, and unstable investments. Because members of America’s senior population rely mostly on fixed incomes, they are increasingly forced to rely on credit just to survive.
In the end, the only course of action left for many senior citizens is to file for Chapter 7 bankruptcy relief. Although the idea of filing bankruptcy may initially be hard to accept, it is important to understand the benefits of filing for bankruptcy when there are no other reasonable options for debt repayment.
One of the biggest misconceptions about filing for bankruptcy is that you automatically have to give up certain assets. This is clearly not true. In Rhode Island, for example, those who meet the residency requirements can protect up to $ 300,000 worth of equity in their home. Rhode Island exemption laws also allow protection of up to $ 12,000 worth of equity in motor vehicles (cars, trucks, motorcycles).
There is also generous protection of retirement accounts, household furniture, clothing, jewelry and a Rhode Island “wildcard” that can be used to protect an additional $ 5,000 worth of other property. Bottom line, most who file a Chapter 7 bankruptcy in Rhode Island don’t lose any property at all.
An ideal Chapter 7 debtor should be current on the secured debts for property she intends to keep, like mortgages and car loans. In as little as 100 days after filing her Chapter 7 bankruptcy petition, her case concludes and her dischargeable debt is wiped out.
While the number of seniors filing for bankruptcy relief is increasing, many others still do not understand their rights under the law. They are often bullied by creditors to hand over their social security checks and not have enough money left over to buy food or medicine. It becomes increasingly important to seek the help of a qualified bankruptcy attorney in these situations.
Mark Buckley is a Rhode Island bankruptcy lawyer and the only RI bankruptcy attorney who is also a CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, call Mark at (401) 467-6800.
RI bankruptcy lawyers know that creditors want to get paid and won’t take no for an answer. They don’t care if you recently lost your job, or are dealing with serious health concerns. As soon as you stop sending money, they will call you morning, noon and night until you take out your checkbook.
Creditors will use the telephone as a weapon. If they need to call you ten times a day in order to get paid, they will. Even worse, many creditors have no problem calling your neighbors, family members, and employers in order to put additional pressure on you. I know clients who were so embarrassed by calls to their workplace, that they used grocery money, presecription medicine money, and rent money just to get the phone calls to stop.
Are there ways to protect yourself, get a fresh start and stop the harrassing phone calls?
Yes. In fact, you have a few options.
When the calls first start, it’s best to screen your calls and call a RI bankruptcy lawyer for advice. The fact you have creditors calling you is a sure sign that you are in financial turmoil. A qualified Rhode Island bankruptcy lawyer can quickly determine whether debt counseling or bankruptcy relief is right for you.
Make note of the names and numbers of every bill collector who calls. It is important to keep a record should you later need to file bankruptcy, or bring a lawsuit against a creditor for unfair debt collection practices.
If creditors are harassing you at home or work, or if calls are being made to neighbors, get protection under the Fair Debt Collection Practices Act (FDCPA). You can use this consumer protection law to request that no creditor contact you by telephone. You should also send each creditor a letter by registered mail in order to have proof they received noticed. If the creditor continues contacting you, under the FDCPA you can sue them for damages.
It is important to note that although the FDCPA can quiet phone calls, the law can only accomplish so much. Creditors are still owed the money and are determined to collect what is due them. If a creditor is legally prevented from calling you under FDCPA, they will probably hire a debt-collection lawyer to sue you. When this crisis occurs, and you have no ability to repay the debt, or you have many other unpaid bills, you need RI bankruptcy advice immediately.
In Rhode Island, once served with a summons and complaint, the defendant debtor has only 20 days to respond to the complaint in writing. A copy of your response must be sent to the plaintiff creditor’s lawyer and another copy filed with the court. Failure to respond in the 20 day period will result in a default judgment and the creditor then has power to attach bank accounts, put liens on real estate and ask for permission from the court for a wage attachment.
Once your phone starts ringing with collection calls, consider consulting an experienced RI bankruptcy attorney for advice. He can explain practical steps to make the phone calls stop permanently—and help you prepare a plan to get rid of your debt.
Mark Buckley is a Rhode Island bankruptcy lawyer and the only RI bankruptcy attorney who is also a CERTIFIED FINANCIAL PLANNER professional. If you live in Rhode Island and have debt problems, call Mark at (401) 467-6800.
Going to court is rarely fun. Financial and family court matters can be issues of serious stress and discomfort. Court cases are filled with uncertainty and conclude only after lengthy legal battles.
Thankfully, a Rhode Island Chapter 7 bankruptcy case is entirely different. In the vast majority of RI bankruptcy cases, debtors never need to enter a courtroom. Although your RI bankruptcy lawyer files your petition with the US Bankruptcy court in Providence, your case is reviewed by an attorney at the US Trustee’s office, meaning that your bankruptcy case does not need to be heard in a courtroom. No judge, jury, or bailiff will be necessary.
The room where I handle my RI bankruptcy creditor meetings is nothing like a courtroom, with only a few scattered tables and chairs. RI Chapter 7 bankruptcy meetings are almost always the same: no excitement, no drama, very predictable and uneventful. You will sit next to me and across from the bankruptcy trustee at a table with a tape recorder and computer. The bankruptcy trustee will typically hear your case within an allotted 5-minute time span. Only improperly-prepared petitions, or extrememly complicated bankruptcy cases, take longer.
One key to a stress-free Chapter 7 bankruptcy case is to find an experienced bankruptcy lawyer with attention to detail and who can do things right the first time. If this kind of lawyer prepares your petition, your hearing should be entirely uneventful.
The bankruptcy hearings take place at the Federal Center, 380 Westminster Street, 6th floor, room 620. You should arrive 30 minutes prior to your hearing and have with you a state issued identification card (driver’s license) and your Social Security card.
