by Mike Wallace | May 3, 2017 | Bankruptcy, Existing Clients
EVEN THOUGH WE CONSISTENTLY ADVISE OUR CLIENTS TO NOT BE WORRIED ABOUT THEIR APPEARANCE AT THEIR CREDITOR’S MEETING, IT IS INEVITABLE THAT IT FALLS ON DEAF EARS.
Every person who files for bankruptcy must attend what is commonly referred to as a “creditor’s meeting” or Section 341 meeting. Because it is referred to as a “creditor’s meeting” bankruptcy clients assume that they are going to be grilled by questions from their creditors. In actuality it is extremely rare for a creditor to appear at a creditor’s meeting and ask questions of a Debtor.
For those persons filing for Chapter 7 bankruptcy they can expect that they will be asked a series of questions by us that will track very closely with this outline. In addition, since the Trustee’s role in a Chapter 7 bankruptcy is to identify any assets that might be non-exempt under the law, you should be prepared to respond to the Trustee with information associated with assets. You can expect that if we have filed your bankruptcy we are going to discuss this possibility prior to your appearance at the meeting.
In a Chapter 13 bankruptcy you should expect that a member of the Trustee’s staff to ask a series of questions that will track closely with this outline. In addition, be prepared to discuss with the Trustee’s office those things that we have previously advised you might be a topic of discussion.
The greatest piece of advice that I can offer you is to relax and not be anxious about your appearance at the creditor’s meeting. These meetings are very routine and you have hired a lawyer for a purpose, to help shepherd you through the process.
by Mike Wallace | Apr 20, 2017 | Existing Clients
IF YOU ARE A CHAPTER 13 CLIENT YOU CAN COMPLETE THE DEBTOR EDUCATION COURSE THROUGH THE CHAPTER 13 TRUSTEE’S EDUCATION NETWORK (TEN)
All consumer bankruptcy clients must complete a second course in order to receive a discharge upon plan completion. This second course is referred to as Debtor Education or Financial Management. The Chapter 13 Trustee in the Eastern District of Texas participates in the Trustee’s Education Network and offers the completion of the second course online. This brochure offers information regarding the course, which can be accessed online at www.13class.com. If you are an existing client I can provide you with the information needed for registering for the course online.
by Mike Wallace | Apr 13, 2017 | Financial News
THE TYPES OF FINANCIAL INSTABILITY FOUND IN A RECENT HARVARD BUSINESS REVIEW REPORT OFTEN LEADS TO THE NECESSITY FOR A BANKRUPTCY FILING
A recent report in the Harvard Business Review found instability in household income. Spikes and dips in income were tracked and there was more than five months of the year that had a spike or a dip. A spike or dip in income was defined as any month that income was either 25% more or less than the average household income. It comes as no surprise to a consumer bankruptcy attorney that income volatility often leads to a financial crisis necessitating a bankruptcy filing. A dip in income could lead to mortgage or vehicle payments becoming delinquent, or an increase in the use of credit cards to pay for medical or dental treatment, utilities, groceries and transportation costs. Quite often I see clients who have increasingly turned to revolving credit to survive during lean financial times.
The Harvard report likewise found significant volatility in monthly spending. Some of the monthly spending fluctuations could be blamed on emergencies, such as sickness, car repairs, housing repairs and educational costs. Unfortunately, when income and spending fluctuations hit vulnerable households it is very often necessary for families to seek the fresh start that can be gained from a bankruptcy filing.
by Mike Wallace | Jan 21, 2017 | Debt Collectors
Attempted Collection of Time-Barred Claims by Junk Debt Buyers.
On January 17, 2017, the United States Supreme Court heard oral arguments in Midland Funding, LLC v. Aleida Johnson. Midland Funding is one of the most well known junk debt buyers in the industry.
Aleida Johnson filed for Chapter 13 bankruptcy protection in Alabama in 2014. Midland Funding had purchased some old debts that were owed by her and subsequently filed a proof of claim in her Chapter 13 bankruptcy case. The last action to collect the debts had occurred in 2003, and the statute of limitations in Alabama on the collection of a debt is six years (as a side note the statute in Texas is four years), Ms. Johnson sued Midland Funding claiming that their filing of the time-barred claim violated the Fair Debt Collection Protection Act (FDCPA).
The District Court dismissed the suit, concluding that while the FDCPA prevented the collection of a known time-barred claim, the U.S. Bankruptcy Code allows a creditor to file a proof of claim in a bankruptcy case after the statute of limitations has run. The U.S. Court of Appeals for the Eleventh Circuit reversed and remanded the case, concluding that although the Bankruptcy Code allowed creditors to file time-barred claims in a bankruptcy case, they were not absolved from liability under the FDCPA for filing the claim.
The Supreme Court agreed to hear the case based on the fact that there has been a split among the circuits on this issue. From my own personal experience the problem that junk debt buyers create in the bankruptcy process is immense. I consistently see numerous time-barred claims being filed in my clients’ chapter 13 cases. The bankruptcy court invalidates the claims, but only after enormous time and expense is incurred in objecting to the time-barred claims.
It is my hope that the U.S. Supreme Court will confirm the holding of the Eleventh Circuit.
by Mike Wallace | Sep 28, 2016 | Bankruptcy
THE WORST MISTAKE THAT PEOPLE MAKE WHEN THEY ARE IN FINANCIAL CRISIS IS TO PROCRASTINATE.
There are a number of reasons people procrastinate when they are in a financial crisis. Many may delay taking action because they believe things are going to change. This leads to a clash of ideas. On the one hand the person is keeping a positive attitude, but at the same time they may be delaying taking needed action. This delayed action can have tremendous consequences in certain financial situations. I have had two recent potential clients contact me after a foreclosure sale had already been conducted. Once a foreclosure sale has been conducted and the property is sold, then it is too late to try to solve the issue through a bankruptcy filing.
People also delay taking action because to face a difficult situation increases stress and anxiety. In fact, psychologists believe that procrastination is a coping mechanism used to avoid the anxiety of unpleasant tasks. However, procrastination can lead to guilt and increased stress when the crisis is not faced without delay.
Abraham Lincoln said “you cannot escape the responsibility of tomorrow by evading it today.” Evading a financial crisis today generally means that you are delaying a solution and you may make the situation worse.
When people are facing a financial crisis, such as a foreclosure on their home, they most likely procrastinate more because of a fear of the unknown. If you are facing a financial crisis then reach out to a professional and get some wisdom to solve your problems. I can promise that if you make contact with me you will not be condemned, and I will do everything I can to put you at ease and we will work toward getting you on the right financial track going forward. You can reach me at 800-867-1583.
As always, any opinions expressed on this website are just that, opinions. Your individual situation might be different than outlined above, so it is probably best that you give me a call to discuss your individual situation. I pride myself on giving you the answers to your questions that are based on your individual circumstances.
