August 18, 2017

Supreme Court Ruling on Lien Stripping

Despite the uptick in the housing market, millions of Americans owe more on their first and second mortgages than their homes are worth. When mortgage balances exceed the value of the home, the home is said to be "underwater." Sometimes the value of the home is sufficient to cover the balance of the first mortgage but not the second. The recent Supreme Court ruling on underwater second … [Read more...]

Domestic Support Obligations: Is Bankruptcy a way to get Relief ?

This post addresses the situation in which an individual is obligated to pay one or more types of domestic support obligations and cannot do so. What are "domestic support obligations?" They arise in the context of domestic disputes. For the most part, they consist of three things: Alimony which is support that one spouse is required to pay for the support of his or her spouse Child … [Read more...]

How Much Money Does it Cost to File for Bankruptcy Protection?

Yes, it costs money to file for bankruptcy protection. This post covers court costs and legal fees related to Chapter 7, Chapter 13 and Chapter 11 bankruptcy cases. Too often, I counsel folks who qualify for bankruptcy protection who’ve been spending their money trying to avoid filing. They spend it on so-called debt relief programs; they spend it trying to keep their home out of foreclosure, … [Read more...]

Should I Keep Some of My Debts Out of Bankruptcy?

When people consider filing for bankruptcy protection, they often want to know if they can keep some of their debts out of their bankruptcy estate. In legal terms, this is called "reaffirming a debt." Reaffirmation means that the reaffirmed debt is not discharged in bankruptcy.  In other words, the Debtor voluntarily agrees that the debt will not go away.  Beware reaffirming debts What … [Read more...]

Attorneys Who Don’t Understand Bankruptcy’s Means Test: A Case Study

I was recently consulted by a highly-paid professional.  He was quite distraught over his financial plight that included debts of over $1,000,000.  He had consulted another attorney who had indicated to him that he was going to have difficulty filing a Chapter 7 bankruptcy case because of the amount of his income. He was at his wits end. I analyzed his situation. Two ways the Bankruptcy Code … [Read more...]

The Means Test Often Decides Whether You File Chapter 7 or Chapter 13 Bankruptcy

In 2005 the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was signed into law, and continues to be the law applicable to bankruptcies filed on or after October 17, 2005.   BAPCPA was the result of the credit card industry’s lobbying efforts, and reflects the industry’s goal of forcing more debtors to repay something to creditors by disqualifying them from a Chapter 7 with a … [Read more...]

The Bankruptcy Means Test: Don’t Make Assumptions

Virtually everyone who is considering bankruptcy goes online to get information regarding the bankruptcy process.  These folks will almost certainly encounter the “means test." This is a part of the bankruptcy law that makes it harder to file a Chapter 7, liquidating bankruptcy. The means test purportedly exists to stop people from abusing the bankruptcy law by filing Chapter 7 cases when they … [Read more...]

Re-filing Chapter 7 after the 2005 Bankruptcy Reform Act

Have you previously filed for Chapter 7 bankruptcy protection? Are you in a difficult financial situation again? You may be eligible to re-file. On October 17, 2005, the Bankruptcy Abuse Prevention and Consumer protection Act of 2005 (derisively referred to by the bankruptcy bar as BAPCrappa) became the law of the land. It instituted the hated means test that, by using wholly arbitrary … [Read more...]

Creditors and Divorce Agreements

Most married couples incur joint debts during their marriage, meaning that both spouses are liable for the debt.  Here are some general thoughts to consider if you find yourself contemplating, or going through, a bankruptcy and divorce in North Carolina. Creditors don't care about divorce agreements Your creditors are not bound by your separation or divorce agreement with your spouse. Your … [Read more...]

Will Bankruptcy Prevent Me from Getting a Student Loan?

Clients often ask me whether filing a bankruptcy case will affect their eligibility for student loans. Generally, these are parents who plan to seek PLUS loans for their kids’ college educations, but sometimes it is the client who plans to go back to school and needs financial assistance in order to do so. The bankruptcy code is specific The Bankruptcy Code contains a specific provision … [Read more...]