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Monthly Archives: May 2012

Celebrity Bankruptcy Filings

Posted by Ryan Blay on May 31st, 2012 in Bankruptcy

People who file bankruptcy are experiencing hard times. Often they worry that they will not be able to pick themselves up and that their lives will never be the same. This is simply not the case for most people. Quite often, people who file for bankruptcy go on to have very successful financial lives. This is just a short list:

 

• Walt Disney—Before having an entertainment empire named after him, Mr. Disney was a simple entrepreneur trying to earn a living. He owned “Laugh-O-Gram Studios” which was an animation company in Kansas City. Unfortunately for Mr. Disney, Laugh-O-Gram did not work out and went into bankruptcy. Five years later, Mr. Disney introduced the world to Mickey Mouse and launched one of the most successful businesses ever.

• Donald Trump—Before he was firing people on TV, Mr. Trump found himself in financial difficulty…4 times! In 1991, 1992, 2004 and 2009 Mr. Trump sought bankruptcy protection for his business in order to improve his chances of success moving forward. As anyone can see, Mr. Trump has used the bankruptcy system to reorganize his business finances and has been very successful, even considering a presidential run.

• Abraham Lincoln—Speaking of presidents and bankruptcy, it is not so commonly known that our 16th President once went through bankruptcy. Lincoln was an enterprising young business owner when things went bad for him and his partner. Because the small business could not be salvaged Lincoln was forced through bankruptcy. As you already know, he went on to become one of the country’s greatest presidents!

These three examples of people who went through bankruptcy show that bankruptcy is not an end point, but is instead a new beginning. The bankruptcy system provides hope to those who would not otherwise have a way out.  This includes former superstar athletes, Real Housewives, and politicians.  By using the bankruptcy system effectively, you too can get out of debt and move forward with your life.

This post was authored by Lakelaw asssociate Nicholas Strom

Edited June 22, 2012:

Please find the following websites with links to other bankruptcy topics beginning with C:

Cancellation of Debt Income By Vermont-New Hampshire Bankruptcy Lawyer Michelle Kainen http://kainenlaw.com/c-is-for-cancellation-of-debt-income/

Cars By San Francisco Bankruptcy Attorney Jeena Cho http://www.jclawgroup.com/blog/bankruptcy-alphabet-c-is-for-cars/

Chapter 7 By Marin County Bankruptcy Attorney Catherine Eranthe http://marin-bankruptcy-law.com/2011/11/10/bankruptcy-a-to-z-c-is-for-chapter-7/

Chapter Choice By Ormond Beach, Florida Bankruptcy Attorney Lewis Roberts http://www.lrlawoffice.com/bankruptcy-alphabet-c-is-for-chapter-choice/

Chapter of Relief By Southgate, MI Bankruptcy Attorney Christopher McAvoy http://downriverbankruptcy.com/chapter-relief/#axzz1hmG4gixF

Cheap Bankruptcy By Houston Bankruptcy Attorneys Busby & Associates http://busby-lee.com/bankruptinfoblog/?p=11

Check Your Bills, Bank Account Statements and Paystubs By Columbus, Ohio Bankruptcy Attorney Athena Inembolidis http://www.athenalegal.com/?p=182

Claims By St. Louis, Missouri Bankruptcy Attorney Nancy Martin http://www.stokleylaw.com/2012/bankruptcy-alphabet-c-is-for-claims/

Competence and Compassion By Philadelphia Suburban Bankruptcy Lawyer Chris Carr http://christophercarrlaw.wordpress.com/2011/11/22/the-c-in-the-bankruptcy-alphabet/

Congress By Los Angeles Bankruptcy Law Monitor, Christine A. Wilton http://www.losangelesbankruptcylawmonitor.com/2012/01/articles/bankruptcy-law-overview/bankruptcy-alphabet/c-is-for-congress/

Conversion By Omaha and Lincoln, Nebraska Bankruptcy Attorney Ryan D. Caldwell http://bankruptcyblog.caldwell-lawfirm.com/2011/11/05/bankruptcy-alphabet-c-is-for-conversion.aspx

Cosigner By Cleveland Area Bankruptcy lawyer Bill Balena http://ohiobankruptcysource.com/?p=2172

Costs By Miami bankruptcy Attorney Dorota Trzeciecka http://dorotatrzeciecka.com/2012/01/22/bankruptcy-alphabet-c-is-for-costs/

Counseling By Northern California Bankruptcy Lawyer Cathy Moran http://moranlaw.net/blog/bankruptcy-alphabet-c-for-counseling/

Cramdown By Colorado Springs Bankruptcy Attorney Bob Doig http://springsbankruptcylaw.com/?p=1048

Cramdown By Oahu Bankruptcy Attorney Stuart Ing http://www.bankruptcyhi.com/2011/11/c-is-for-cramdown/

Cramdown By Metro Richmond Consumer and Bankruptcy Attorney Mitchell Goldstein http://www.morethanbankruptcy.com/bankruptcy-a-z-c-is-for-cramdown.html

Credit Card Creep By Pittsburgh Bankruptcy Attorney Shawn Wright http://www.pittsburgh-bankruptcy-law.com/blog/bid/117862/C-is-for-Credit-Card-Creep

Credit Card Tips By Wisconsin Bankruptcy Lawyer Bret Nason http://nasonlawfirm.com/archives/686

Credit counseling By Chicago Bankruptcy Attorney Kyle A. Lindsey http://www.lindsey-law.com/cheap-chicago-bankruptcy-attorney-alphabet-c-is-for-credit-counseling/

Credit counseling By Los Angeles Bankruptcy Blog, Mark J. Markus http://www.bklaw.com/bankruptcy-blog/2011/11/credit-counseling-bankruptcy/

Credit counseling By Daniel J. Winter, Chicago Bankruptcy Attorney http://www.bankruptcylawchicagoblog.com/bankruptcy-alphabet%E2%80%94c-is-for-credit-counseling/

Credit Counseling By Birmingham Bankruptcy Attorney Elizabeth Johnson http://www.birminghambankruptcyhelp.com/bankruptcy-alphabet-c-is-for-credit-counseling/

Creditor By New York Bankruptcy Lawyer, Jay S. Fleischman http://www.consumerhelpcentral.com/bankruptcy-alphabet-creditor/

Creditor By St. Clair Shores MI Bankruptcy Attorney http://stopcreditor.com/c-for-creditor/

Creditors By Livonia, Michigan Bankruptcy Attorney Peter Behrmann http://www.livoniamichiganbankruptcy.com/c-is-for-creditors/

Creditors Meeting By Philadelphia  Bankruptcy Lawyer Raymond Kempinski http://www.colemankempinski.com/creditors-meeting-bankruptcy-alphabet/


Lakelaw and Social Media

Posted by Ryan Blay on May 23rd, 2012 in Uncategorized

 

Lakelaw remains committed to serving our clients and protecting their confidentiality.

That said, like many firms, we are expanding our social media presence.  In addition to this blog and our websites, we also can be found on Facebook (http://www.facebook.com/Lakelaw) and on Twitter (@davidleibowitz for our founding attorney David Leibowitz, and @LakelawKenosha for updates from our Wisconsin operations).

Please check us out, comment on our pages, tweet us and re-tweet our posts, and spread the word about our services.

Thanks to all our dedicated followers.


Mixed News From Report on Home Sales

Posted by Ryan Blay on May 22nd, 2012 in Foreclosure - Saving Your Home, Illinois, Real Estate, Wisconsin

Politicians, economists, and consumer advocates have been hoping for months that the housing market would improve.  This, it is said, would help the economy pick up again.  People can access the equity in their homes, move freely to take jobs elsewhere, and invest in home repair, among other economic drivers.

A recent report in the Milwaukee Journal-Sentinel discusses April home sales, which did rise across the state – in price and in volume.  That’s generally good news.  However, buried further in the article, is a discussion on Southeastern Wisconsin, including the 4-county Metro Milwaukee area.

“The median price fell 1.6% in the southeastern region, but lost 4.4% in the four-country metro Milwaukee area, where most of the state’s foreclosed properties are concentrated.”

Well that’s not good.  It means thousands of homeowners are still struggling with foreclosure, entire blocks in Milwaukee proper and its suburbs are being foreclosed upon, and there are still depressed areas where no improvement is being seen.  When Metro Milwaukee sees figures more like Northeast and North Wisconsin, with positive trends in home sales and in sales prices, we will see the economy pick up further.

What do you think?  Are you seeing fewer foreclosed homes in your neighborhood and more “Sold!” signs?  Is anything different in Chicagoland?  According to a recent Chicago Tribune story, over half of March sales in Chicago ended up with a loss on the home.  Some of the suburbs saw a 70% loss rate.


Credit Unions and Cross Collateralization

Posted by Ryan Blay on May 21st, 2012 in Bankruptcy

Credit unions are great to work with…unless you’re in bankruptcy. This is because of something known as cross collateralization. Let’s say you are a member of a credit union with a checking account, credit card and car loan. When you signed up for the loan and credit card you probably signed something tying all of those items together. Put another way, if you don’t pay your car loan the bank can freeze, or possibly even take, the money in your checking account. This cross collateralization can cause difficulties in bankruptcy, particularly the process known as “reaffirmation.”

One option bankruptcy filers have is to “reaffirm” a debt. “Reaffirming” a debt simply means continuing to pay the debt as if you didn’t file for bankruptcy.  Those who use this option are almost borrowers on a car loan who need the car to carry on with their jobs and life. To get a debt reaffirmed, both the person who declared bankruptcy and the company that loaned the money must voluntarily agree. When credit unions use cross collateralization, problems can arise for people in bankruptcy.

When a person wants to reaffirm a car loan, that is cross collateralized with a credit card or other loan, the credit union will insist on reaffirming the credit card before it will agree to reaffirm the car loan. This causes obvious difficulties. The person in bankruptcy wants to get rid of debt, like the credit card, in order to move on with their life, BUT that person needs her or his car in order to survive. This problem is one of difficulties consumers have to navigate in the complex bankruptcy system.

Do you have a car loan or mortgage loan through a credit union?  If you’re considering filing for bankruptcy, please contact us to discuss how we might be able to help you keep your  loan while eliminating debt through Chapter 7.

This post was authored by Nicholas Strom, Lakelaw associate

 

Updated June 22, 2012:

Please find the following websites with links to other bankruptcy topics beginning with C:

Cancellation of Debt Income
By Vermont-New Hampshire Bankruptcy Lawyer Michelle Kainen
http://kainenlaw.com/c-is-for-cancellation-of-debt-income/

Cars
By San Francisco Bankruptcy Attorney Jeena Cho
http://www.jclawgroup.com/blog/bankruptcy-alphabet-c-is-for-cars/

Chapter 7
By Marin County Bankruptcy Attorney Catherine Eranthe
http://marin-bankruptcy-law.com/2011/11/10/bankruptcy-a-to-z-c-is-for-chapter-7/

Chapter Choice
By Ormond Beach, Florida Bankruptcy Attorney Lewis Roberts
http://www.lrlawoffice.com/bankruptcy-alphabet-c-is-for-chapter-choice/

Chapter of Relief
By Southgate, MI Bankruptcy Attorney Christopher McAvoy
http://downriverbankruptcy.com/chapter-relief/#axzz1hmG4gixF

Cheap Bankruptcy
By Houston Bankruptcy Attorneys Busby & Associates
http://busby-lee.com/bankruptinfoblog/?p=11

Check Your Bills, Bank Account Statements and Paystubs
By Columbus, Ohio Bankruptcy Attorney Athena Inembolidis
http://www.athenalegal.com/?p=182

Claims
By St. Louis, Missouri Bankruptcy Attorney Nancy Martin
http://www.stokleylaw.com/2012/bankruptcy-alphabet-c-is-for-claims/

Competence and Compassion
By Philadelphia Suburban Bankruptcy Lawyer Chris Carr
http://christophercarrlaw.wordpress.com/2011/11/22/the-c-in-the-bankruptcy-alphabet/

Congress
By Los Angeles Bankruptcy Law Monitor, Christine A. Wilton
http://www.losangelesbankruptcylawmonitor.com/2012/01/articles/bankruptcy-law-overview/bankruptcy-alphabet/c-is-for-congress/

Conversion
By Omaha and Lincoln, Nebraska Bankruptcy Attorney Ryan D. Caldwell
http://bankruptcyblog.caldwell-lawfirm.com/2011/11/05/bankruptcy-alphabet-c-is-for-conversion.aspx

Cosigner
By Cleveland Area Bankruptcy lawyer Bill Balena
http://ohiobankruptcysource.com/?p=2172

Costs
By Miami bankruptcy Attorney Dorota Trzeciecka
http://dorotatrzeciecka.com/2012/01/22/bankruptcy-alphabet-c-is-for-costs/

Counseling
By Northern California Bankruptcy Lawyer Cathy Moran
http://moranlaw.net/blog/bankruptcy-alphabet-c-for-counseling/

Cramdown
By Colorado Springs Bankruptcy Attorney Bob Doig
http://springsbankruptcylaw.com/?p=1048

Cramdown
By Oahu Bankruptcy Attorney Stuart Ing
http://www.bankruptcyhi.com/2011/11/c-is-for-cramdown/

Cramdown
By Metro Richmond Consumer and Bankruptcy Attorney Mitchell Goldstein
http://www.morethanbankruptcy.com/bankruptcy-a-z-c-is-for-cramdown.html

Credit Card Creep
By Pittsburgh Bankruptcy Attorney Shawn Wright
http://www.pittsburgh-bankruptcy-law.com/blog/bid/117862/C-is-for-Credit-Card-Creep

Credit Card Tips
By Wisconsin Bankruptcy Lawyer Bret Nason
http://nasonlawfirm.com/archives/686

Credit counseling
By Chicago Bankruptcy Attorney Kyle A. Lindsey
http://www.lindsey-law.com/cheap-chicago-bankruptcy-attorney-alphabet-c-is-for-credit-counseling/

Credit counseling
By Los Angeles Bankruptcy Blog, Mark J. Markus
http://www.bklaw.com/bankruptcy-blog/2011/11/credit-counseling-bankruptcy/

Credit counseling
By Daniel J. Winter, Chicago Bankruptcy Attorney
http://www.bankruptcylawchicagoblog.com/bankruptcy-alphabet%E2%80%94c-is-for-credit-counseling/

Credit Counseling
By Birmingham Bankruptcy Attorney Elizabeth Johnson
http://www.birminghambankruptcyhelp.com/bankruptcy-alphabet-c-is-for-credit-counseling/

Creditor
By New York Bankruptcy Lawyer, Jay S. Fleischman
http://www.consumerhelpcentral.com/bankruptcy-alphabet-creditor/

Creditor
By St. Clair Shores MI Bankruptcy Attorney
http://stopcreditor.com/c-for-creditor/

Creditors
By Livonia, Michigan Bankruptcy Attorney Peter Behrmann
http://www.livoniamichiganbankruptcy.com/c-is-for-creditors/

Creditors Meeting
By Philadelphia  Bankruptcy Lawyer Raymond Kempinski
http://www.colemankempinski.com/creditors-meeting-bankruptcy-alphabet/


If I File For Bankruptcy Relief, Can Creditors Take My Property?

Posted by Ryan Blay on May 17th, 2012 in Bankruptcy, Chapter 7, Exemptions, Illinois, Wisconsin

The short answer:  technically yes, but creditors almost never do.  Most of our clients leave bankruptcy with everything they owned before filing.

The process for taking someone’s property in bankruptcy works like this:  When you file for bankruptcy protection under Chapter 7,  a Trustee is appointed to your case. The Trustee’s job is to see if he or she can sell your property in order to pay your creditors. That’s called a “liquidation”.  But, there are two major issues that prevent Trustees from taking property and selling it to pay creditors (and earn a commission) : secured property and exemptions.

Secured property is property that has a loan or lien.  If you don’t pay a debt secured by property, the creditor can take the property back through repossession, foreclosure, or other means.  The most common examples of secured property are homes and cars. A Trustee would have to pay off the secured creditor before the Trustee could pay other creditors. It is a waste of the Trustee’s time if only the secured creditor gets paid, so unless you have equity in your secured property, the Trustee isn’t going to want it. The other reason Trustees don’t take your property is exemptions.

Exemptions are state or federal protections that prevent someone filing for bankruptcy from being left with nothing. When a person in bankruptcy applies an available exemption, it means the creditor cannot take that property or a certain amount of the property. An example is the Illinois state exemption for a car. In Illinois, a debtor gets $2,400 for a car. So, if the Trustee sells a car the first $2,400 goes to the person who filed bankruptcy. A Trustee wouldn’t go to all of the trouble of filing the appropriate paperwork with the court, taking the car and selling the car unless the car was worth much more than $2,400 which would go to the person in bankruptcy.

As you can see, while it is possible for a Trustee to take property from someone in bankruptcy, the odds of it happening are low.  If you are concerned about keeping your possessions but need to file bankruptcy, please contact us to discuss how we can protect your assets and still get you the financial relief you need.

This post was authored by Lakelaw associate Nicholas D. Strom

 


Bankruptcy is Bad….Unless You’re a Mortgage Servicer

Posted by Ryan Blay on May 14th, 2012 in Uncategorized

 

Nobody comes to our office proud to be filing bankruptcy.  Bankruptcy to many people evokes shame, financial flaws, mistakes, and humiliation.  More than anyone, creditors have been driving these feelings to associate with bankruptcy so consumers will try everything possible to avoid it – including liquidating 401Ks, borrowing from friends, family and payday loan stores, and incurring mental anguish if they do choose to file.

How the mighty have fallen.  Today, a company you may never have heard of called Residential Capital, LLC (commonly called “ResCap”) filed for Chapter 11 Bankruptcy relief in New York.  For most people, Chapter 11 business bankruptcies aren’t that interesting.  The first day alone consists of dozens of motions and emergency hearings that would drive the average reader to boredom or worse.  But this might interest people for two reasons.

First, ResCap is a division of Ally Financial (formerly known as GMAC).  Ally is doing well in its banking and its auto loan divisions.  But its mortgage division, ResCap, left a lot to be desired.  Ally was one of the five major mortgage servicers to settle a substantial lawsuit with the state Attorneys General a few months ago.  They were accused of robo-signing and committing other substantial bad acts.

Second, you are a creditor of ResCap.  So am I.  So are all of your friends and family.  The federal government, through the Treasury Department, loaned Ally about $17 billion.  Let’s just say the bank is in no way ready to pay the remaining $12 billion back now.  Nor is the government ready to shed its significant investment in ResCap.  This is the ultimate point of interest:  How much will the government recover from its investment it made to avoid a financial collapse?

Bankruptcy offers companies, as well as individuals, a fresh start and a chance to reorganize.  It’s a little interesting how individuals are treated with contempt when they file, but businesses don’t hold themselves to the same standards when they require the same protection.  That double standard won’t change any time soon.


Does the “Show Me the Note” Defense Work to Stop a Foreclosure?

Posted by Ryan Blay on May 9th, 2012 in Foreclosure - Saving Your Home, Legal, Mortgage Foreclosure Defense

Something we have seen a lot lately at Lakelaw is a failure of banks and their attorneys to follow the rules during foreclosure lawsuits. A typical purchase of property requires that you sign a Mortgage instrument and Promissory Note with your bank. The Mortgage is a basic security agreement that says if you don’t pay, the bank can come get your house; it uses the home and possibly other property as collateral. The Note is an agreement to pay until the borrowed money is repaid in full. After the Mortgage and Note are signed, most people keep a copy of each in their records but don’t look at them again until they have problems paying.

The mortgage holders must follow some simple rules to properly “negotiate” or transfer a Note.  The first rule says there must be an “endorsement” to a person or company and delivery of the Note, or an endorsement “in blank” so whoever holds the Note can enforce it. The endorsement can either be on the Note itself or on a page “affixed” to the Note called an Allonge. This might sound complicated, but these are similar rules for paying someone by a personal check - if you write a check payable to Lakelaw, Lakelaw can stamp or sign the back of the check and deposit it or it can endorse it to another party by writing “Pay to the order of [Name of Party]“.

While these rules seem simple, we are seeing some major issues in our Foreclosure Defense practice.  One mistake we see is that the company foreclosing on a homeowner does not have a properly endorsed Note, and the bank or servicer is not the original lender. If the Note was not endorsed, how did the foreclosing bank get the Note? Another strange thing we see is when the foreclosing bank starts with a Note that is not endorsed, endorsements appear on the Note or a page with endorsement later appears. How did these endorsements get there?   It seems unlikely the bank has two copies of a Note, one unendorsed and the other endorsed. It’s a question that may prevent a judge from granting a judgment to the plaintiff if it’s addressed properly and in a timely fashion.

The disturbing trend of banks not following proper procedure when trying to take away people’s homes should cause a pause and hopefully bring about reforms that will cause lenders and servicers to reevaluate how they do business.  It also should encourage anyone with questions about their mortgage documents in a foreclosure lawsuit to speak to a lawyer immediately to see what defenses and claims they might have.

This post was co-authored by Lakelaw associate Nicholas D. Strom

 

 

 


Why is it So Expensive to File a Bankruptcy?

Posted by Ryan Blay on May 8th, 2012 in Bankruptcy, Bankruptcy Information, Bankruptcy procedures, BAPCPA, Chapter 13, Chapter 7, Illinois, Wisconsin

Lawyers, especially bankruptcy lawyers, are very aware of what is happening with the economy and how the average joe lives.  We are much more in tune with the middle and lower classes than our wealthier congressmen.  So when we hear questions like “Why are does it cost so much to file a bankruptcy?”, we understand and sympathize.  We even get that some people who would like to file cannot afford to do so.  This affects not only our clients in Wisconsin and Illinois, but consumers all across the country.

The price of filing a bankruptcy is set by Federal law. Right now, to file a Chapter 7 bankruptcy it costs $306, while a Chapter 13 bankruptcy runs $281. These fees go to pay the administrative fees of filing the case (things like the Trustee’s fees and the cost of processing paper work). While it is possible to petition the court to waive your fee for extreme financial difficulties, it is not easy to get a waiver.  It can’t be.  The courts depend on your payments in order to staff the courts, pay the judges, trustees, and other officials involved, and run everything smoothly.  The courts receive woefully little funding and rely on these fees to make the system work well.

The second part of the price to file a bankruptcy comes from attorney’s fees. Your attorney does a lot of work for you when filing your bankruptcy petition. Some of the tasks in a simple bankruptcy include: preparing the petition, contacting creditors that are garnishing or may garnish your wages, attending the 341 meeting, answering questions you have, protecting assets from seizure, and preparing a means test. The means test, which first showed up in 2005, is a big reason why the cost of filing a bankruptcy has shot up in recent years. As you can see in other posts, the means test helps determine whether or not you can file a Chapter 7 bankruptcy. Before the means test requirement, people could file so long as they were not filing in “bad faith.” Now, with the means test requirement, attorneys have to perform a tricky mathematical test which  measures whether or not our clients are deemed worthy of a Chapter 7 bankruptcy, based on income and expenses. What complicates the means test further is that there are now exceptions attorneys have to account for. To put it simply, the amount of work that goes into a bankruptcy is what makes the cost so high.

Even though there are high costs for filing a bankruptcy, we here at Lakelaw try and work with you to make bankruptcy affordable. If you have financial concerns but aren’t sure if bankruptcy is right for you, contact us for a free consultation in order to discuss your financial options. We promise to treat you with Care, Kindness, Courtesy, Respect, Professionalism and Dedication.

This article was co-authored by Lakelaw Senior Associate Ryan Blay and Associate Nicholas D. Strom


Will Freddie Mac and Fannie Mae Help Slow the Foreclosure Crisis?

Posted by Ryan Blay on May 4th, 2012 in Alternatives to Bankruptcy, Real Estate

 

Freddie Mac and Fannie Mae back over half of the nation’s mortgage loans.  Because they were exempted from the recent foreclosure settlement the Attorneys General reached with the biggest individual servicers (Chase, Bank of America, Wells Fargo, Citibank, and Ally/GMAC), many loans are still in crisis and these two semi-governmental bodies haven’t really addressed their role in helping our mortgage crisis.

A new loan set to go into effect on June 15th for Freddie or Fannie backed loans will require the giants to respond to short sale requests within 30 days, with weekly updates after.  With some short sales taking over 10 months to complete, this process hasn’t been effective as an alternative to foreclosure.  Impatient buyers will back out, leaving the parties without a way to walk away from the property without completion of the foreclosure process.  During this time, the borrower’s credit will suffer for each month the mortgage isn’t paid on time.

Short sales have their advantages if they are completed quickly.  The servicer can provide cash incentives for the borrowers to leave and they don’t need to wait out the required redemption period.  The borrowers can have the comfort of knowing they’ve done their best to eliminate any damages caused by their lack of payment.  And if this property is the borrower’s home, the forgiven debt won’t have to be taxed (at least until the end of this year).

Of course, any law that is meant to force a response from a slow, bureaucratic body is only as effective as its enforcement.  But given the rude and inefficient way in which many borrowers are treated when they try in good faith to conduct a short sale instead of heading into foreclosure or bankruptcy, it may be a welcome change and hopefully match buyers and sellers properly, and perhaps put a dent into the number of homes – and homeowners – in crisis.


I’ve Already Filed for Bankruptcy But I Need Financial Relief Again

Posted by Ryan Blay on May 3rd, 2012 in Uncategorized

 

People routinely come into our office concerned about filing a bankruptcy because they have filed for bankruptcy in the past. If the filing was over 8 years ago, it’s not going to impact our options to help.  But  the Bankruptcy Code prevents continuous bankruptcy filings. After filing a Chapter 7 bankruptcy, you must wait 8 years to file another Chapter 7 petition (measured from the date of filing of the original case) or 4 years to receive the full benefits of a Chapter 13 bankruptcy. After filing a Chapter 13 bankruptcy, you must wait 6 years to file a Chapter 7 or 2 years to file another Chapter 13. Even though the full benefits of bankruptcy might not be possible because of a previous filing, there still may be answers for you.

Two of the best ways to receive financial help are filing a “no-discharge” Chapter 13 or filing a Chapter 128 State law remedy. A “no-discharge” Chapter 13 allows you to file for bankruptcy but not receive the full benefits of a discharge (where your debts are forgiven). The “no-discharge” Chapter 13 would be the best option left if you fell behind on a car payment while out of work but recently got re-hired. If the company you’re paying for your car payment tried to repossess your car, you could file a Chapter 13 and prevent the creditor from taking your car – or return it if it’s been repossessed but not sold yet. You would get 3 to 5 years to make up the payments you missed on the car, while also taking care of any debts you’ve received since your last bankruptcy filing. The only catch with the “no-discharge” Chapter 13 is that you have to pay back everything in full.

The Wisconsin residents we serve have another option:  the State law Chapter 128 remedy. You would use a Chapter 128.21 Petition to Amortize Debts if you have fallen behind on bills that were not secured by property.  This means we can’t take care of furniture on credit, car loans/title loans, mortgages, and tax debts.

But most bills, like medical bills, high-interest payday loans and credit card bills can be included. With a Chapter 128 you pay back the bills you choose over three years. Like the “no-discharge” Chapter 13, you also have to pay the bills back in full.  The good news is that interest stops and your wages and bank accounts can’t be touched by the creditors you list.

If you need financial help but are unsure what to do because of a previous bankruptcy filing, give the professionals at Lakelaw a call. We help people in financial difficulty find the right solution for them and do so by using Care, Kindness, Courtesy, Respect, Professionalism and Dedication.

This article was drafted by Lakelaw associate Nicholas D. Strom


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