Mark Buckley, Esq. Rhode Island Bankruptcy Lawyer

The American Bankruptcy Institute reported 1.4 million consumer bankruptcy filings in 2009.  A lot of those who filed were senior citizens.  This is a definite shift from past decades where seniors were among the least likely to file for bankruptcy relief. 

I remember a time when seniors preferred making their purchases with cash and refused to use credit cards.  They would buy an item only if there was enough cash to do so.  They were largely suspicious of the “buy now – pay later” approach. 

So what caused seniors to change the way they made purchases?  Well, a combination of things.  Basically, life got more complicated and credit card companies forcefully marketed to seniors to simplify the purchase process. 

From grocery shopping, to picking prescriptions up at the pharmacy, and making co-pays for their medical and dental appointments, credit cards became the accepted form of payment.  The end result was that seniors, on average, now have more credit card debt than the younger generation.

In my Rhode Island bankruptcy practice, the age 65 plus group continues to expand.  Studies have shown that the fastest growing segments that need to file for bankruptcy are between the ages of 75 and 84.

It’s almost impossible to live on a fixed income when the cost of everything you need is going up.  For those seniors who were able to save up for retirement, not merely relying on Social Security, the present recession and recent stock market crash destroyed a lot of their wealth.  Many lost a large part of their retirement money and there isn’t enough time to rebuild their investments.

I can remember a client who was in his late 70’s.  He was unable to live on a fixed income due to credit card debt.  He had already suffered two heart attacks, but he still needed to work to pay his credit card bills.  He ended up taking a night-shift security job, patrolling a warehouse parking lot in the inner city. 

That was a very sad situation.  He was risking what little of life remained to pay interest on a debt he would never be able to repay.  I’m glad he ultimately decided to explore debt relief options and give me a call.

If you are a senior citizen and credit card bills are preventing you from affording prescriptions, health care, or food, you should call a bankruptcy lawyer.   Bankruptcy laws can help you protect your property and stop harassing phone calls from creditors. 

By contacting a skilled bankruptcy lawyer, you can end the “robbing Peter to pay Paul” cycle and reduce the stress you never thought would be part of your golden years.

Mark Buckley is a Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional.  If you live in Rhode Island and have debt problems, call (401) 467-6800.

Because so many income tax filers are afraid to owe the IRS, they have more taxes deducted from their paychecks throughout the year than is required.  They would rather pay a little extra in taxes each pay period than to find themselves in a jam on April 15. 

As soon as the W2 statements and other tax documents arrive, they quickly file their tax return and patiently await the big refund.  Statistics show that a whopping 75% of all tax payers receive a refund and that the average amount is $ 2,300.  I’ve had clients receive refunds of more than $ 6,500.

This presents an interesting dilemma for those who may need to file bankruptcy, but who also are expecting a tax refund.  From January to April, go to any 341 meeting of creditors across the country and you are likely to hear the bankruptcy trustee ask, “Are you expecting a tax refund this year?”

So here is the question: Can you wipe out your creditors in a Chapter 7 bankruptcy and still keep your income tax refund?  For most debtors, the answer is yes.  Here are three tips to consider.

Adjust your Withholdings

If you typically get a large refund year after year, you should adjust your withholdings so fewer taxes are deducted from your pay.  This will accomplish two things.  First, you will be downsizing your future refund and make it less attractive to the trustee.  Second, by having the correct amount of taxes taken from your pay, you are freeing up your true income.  You will then have more of your actual income to cover necessities and be less inclined to rely on credit.

Consider Waiting To File

If there is little time to adjust withholdings, and a large refund is expected, consider filing your bankruptcy petition AFTER the refund arrives.  The bankruptcy trustee will know you received a large refund, so be prepared to answer questions as to how it was spent. 

Clearly, you should not use any portion of your refund to repay debts to friends or family members.  In the eyes of the bankruptcy court, this would be considered playing favorites with your creditors.  If the trustee discovers a preferential treatment, he will take steps to get the money back.

There are acceptable ways to spend the money and not get in trouble.  You should have no problem spending the refund on necessities like food, clothing, medicine and vehicle repair.  If you have any questions, be sure to consult a qualified bankruptcy attorney.

Consider Your Exemptions

Every state has protection laws which allow a debtor to keep property.  Some states, like Rhode Island, even allow protection using Federal exemptions.  Whether state or federal, exemption laws can be used to protect income tax refunds.

Depending on the size of the refund, and value of other property trying to be protected, most who file bankruptcy can protect their income tax refund.  Once again, consult a skilled bankruptcy lawyer to determine when to file your case and how best to protect your refund.

Mark Buckley is a Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional.  If you live in Rhode Island and have debt problems, call (401) 467-6800.

There’s No Place Like Home

Many adults would love to return to childhood.  A comfortable bed and three meals a day in exchange for a few chores.  Financial stress was never part of the deal.

Move out of the nest, however, and the pressures of life make their grand entrance.  Less than perfect jobs, expensive rents, and a myriad of new expenses start to take their toll.  This is why so many young people become part of the boomerang generation. 

A few wrong financial moves and a little misfortune can cause anyone to ask:

1. Should I move in with my parents to save money and repay excessive debt?
2. If I do move back, will it be more difficult for me to qualify for bankruptcy relief?

A Case Study

I recently spoke with a young married couple that moved in with parents in order to save money.  Substantial credit card debt had accumulated while both were working.  It later became unpayable when their income dropped to $45,000.

As we explored various debt relief options, we considered the possibility of filing Chapter 7 bankruptcy.  In Rhode Island, the median income for a household of two people is presently $ 62,806.  This couple could easily pass the means’s test, but would their case be so simple?

Moving back home created a big problem:  their new living expenses were now only a fraction of what they once were.  As long as they continued living with their parents, filing a Chapter 7 bankruptcy became impossible.  There was now enough income to finance a five year Chapter 13 repayment plan.  And they had no intentions of living there that long.

In contrast, their old living expenses included substantial rent, utilities and groceries.  It was easy to see  they had no ability to repay their debt.   That would have been the perfect time to file for a Chapter 7 bankruptcy.  It could have been a very simple case.

Move home or File Bankruptcy?

Don’t try to reclaim your old bedroom, unless you are prepared to do the following:

1. save enough money while living there
2. stay there long enough to completely eliminate your debt
3. possess the discipline to not waste your positive cash flow

On the other hand, if you fail in any of these three requirements, stay right where you are and consider calling a Chapter 7 bankruptcy lawyer to understand your options.

Mark Buckley is a Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional.  If you live in Rhode Island and have debt problems, call (401) 467-6800.

A reaffirmation agreement breaths life back into a debt that could have been discharged in a Chapter 7 bankruptcy.  Such agreements are often made to protect a house or vehicle.  Essentially, the debtor is forfeiting bankruptcy protection in exchange for the creditor promising not to repossess the property.

It seems straightforward enough.  A client gets to keep his property and possibly rework the terms of the new contract to make repayment more affordable.  What’s not to like?

Here is what I advise my clients concerning reaffirmation agreements:

1. Signing one is like putting your foot in a bear trap.  You are no longer free to surrender the property without being personally liable; if you are late on future payments, your new credit will be adversely affected; if you miss a few payments, you can still lose the property; if the creditor does take back the property, you will be sued for the balance owed after the property is sold; and finally, you won’t be able to file bankruptcy again for 8 more years to discharge the debt.
2. The agreement requires your attorney to be a psychic.  He must look into his crystal ball and determine if you are in a good position to repay the debt.  He must then sign his name stating that the reaffirmation agreement DOES NOT impose undue financial hardship.
3. Because I don’t have psychic abilities, I don’t like the idea of giving up bankruptcy protection.   When a debtor declares in his bankruptcy petition that expenses are greater than income, I am convinced that signing a reaffirmation agreement DOES impose undue hardship.
4. Even if I could be persuaded to sign the agreement for a client, the court would still reject it if expenses exceed income.

There are many ways a qualified bankruptcy lawyer can help you protect your property.  If you are considering reaffirming a secured debt, please consider the following:

1. Never sign the agreement unless you have restructured the terms to be decidedly in your favor.  In other words, try to reduce the principal and interest, or stretch out the payment length.
2. Understand that you can revoke the agreement within 60 days if you change your mind.
3. You have leverage.  Most creditors do not want your property and do not want to take the legal steps necessary to take it back and sell it.  If you really want to keep the property, in most cases, the creditor is satisfied with you voluntarily making the monthly payment according to the terms of the discharged debt, without requiring a reaffirmation agreement. 

In other words, keep the property and keep making the payments without future liability.  There are only a few creditors who like to “eat steel” (aka repossessing a car from a debtor who has not reaffirmed the debt, but has made voluntarily payment).

Mark Buckley is a Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional.  If you live in Rhode Island and are struggling with excessive debt, call (401) 467-6800 for a free phone consult.

1. Co-signing is NOT a character reference.
2. Co-signing is NOT a vote of confidence that you think your friend has the ability to pay the debt.

Co-signing is you putting your money where your mouth is. It is you personally agreeing to pay the debt for your friend if he does not.

So what is an authorized user? It is someone who gets to make purchases, but never gets stuck with the bill.  I have seen this relationship between spouses, or between a parent and child. 

A father, for example, may request that his daughter be an authorized user on one of his accounts. The daughter then has the authority to use the card, but dad always has the responsibility to pay the bill.

Here is the bottom line. Never co-sign any obligation for anyone (including relatives), or allow someone with bad spending habits to be an authorized user, UNLESS you are extremely wealthy; because in many cases, you will be stuck with the debt in the end.

Mark Buckley is a Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional.  If you live in Rhode Island and are struggling with excessive debt, call (401) 467-6800 for a free phone consult.

The US Bankruptcy Code offers several choices to one who is struggling with debt.  A Chapter 7 bankruptcy is the most common form and preferred option for most debtors.  Here are seven reasons why.

1. Time: a typical Chapter 7 bankruptcy takes about 100 days from beginning to end.  Once the case is filed, a brief creditor’s meeting is held about 30 days into the process.  Unless a creditor objects (rare), the case ends about two months later with little excitement.
2. Property: most Chapter 7 filers do not lose any property.  Federal and/or State exemption laws allow a debtor to protect fairly generous amounts of property.  The bankruptcy trustee concludes most cases as being “no asset” cases.  This means that you have no property that you are required to forfeit.
3. Cost: Considerably less expensive than a Chapter 13 bankruptcy.  While there are regional differences on what a typical bankruptcy lawyer charges, most experienced lawyers will quote a fee that is fair and affordable.  We understand that finances are tight and that this is something you don’t have extra money for.
4. Repayment of most unsecured creditors: none.  If the debt was incurred in good faith and no creditor objects to you filing bankruptcy, unsecured credit obligations (credit cards, medical bills, utility bills, car repossessions, mortgage foreclosure obligations) are completely wiped out in bankruptcy.
5. Privacy:  While a record of your bankruptcy is accessible in the court system, unless  you are famous, you don’t have to worry about it being published in the newspaper.  Generally, the only people who know you filed are you, the court, your creditors, and anyone else you choose to tell.
6. Credit:  Most Chapter 7 bankruptcy filers are able to reestablish credit within a short period after their bankruptcy.  After the present debt is removed, your debt to income ratio improves.  This is the beginning to rebuilding credit.
7. Stress:  Other than a 3-5 minute hearing with the assigned trustee for your case, most Chapter 7 filers never have to go to court.

Mark Buckley is a Warwick, Rhode Island bankruptcy lawyer and CERTIFIED FINANCIAL PLANNER professional.  If you live in Rhode Island and would like a free telephone consultation to discuss your debt situation, please contact Mark Buckley.

Creditors want to get paid.� When you don’t send them the regular monthly minimum, your telephone becomes the debt collector’s weapon of choice.

Creditors will use the telephone in a way to get the desired result.� They have no problem calling you 12 times a day to get you to send them a payment.� If that doesn’t work, they will try to embarrass you by calling neighbors, family members, or your employer.� But what can you do to make the phone calls stop?

If you are afraid every time the phone rings, you have a few options:

1. In the early stages, screen all your calls and call a bankruptcy lawyer for advice.� He can advise you whether debt counseling or bankruptcy may be options worth exploring.
2. Take notes of the name and phone number of everyone who calls.
3. If you are being harassed at home, or at work, or calls are being made to neighbors, get protection under the Fair Debt Collection Practices Act (FDCPA).� Under this consumer protection law, you can request that no creditor contact you by telephone.� You may wish to send them a letter by registered mail so you have proof they received notice.� If the creditor violates the law, you can sue them for damages.

While the Fair Debt Collection Practices Act is helpful in quieting the phone calls, the result is usually only temporary.� If a creditor is prevented from calling you, they often step-up the collection activity by hiring a debt collection lawyer to bring a lawsuit.� You will then be forced to deal with the debt situation before liens are put on property, or wages are attached.

If you have debt that you are unable to pay, consider calling an experienced bankruptcy attorney for advice.� There are practical steps you can take today to make the phone calls stop permanently as you prepare a plan for dealing with your debt.

Mark Buckley�is a Warwick,�Rhode Island bankruptcy�lawyer and CERTIFIED FINANCIAL PLANNER professional�.���If you live in�Rhode Island�and would like a free telephone consultation to discuss your debt situation, please contact Mark Buckley.

I know very few people who ENJOY going to court.� In seventh grade, however, I remember taking a trip to the local courthouse just to see a trial in action.� Unfortunately, I walked in on a family court matter and I could feel the enormous stress.

When I think of court, I think of uncertainty.� Someone wins, someone loses.� It can be expensive, take a long time to reach a decision, and can be a grueling battle the whole way through.

When it comes to filing bankruptcy, however, the vast majority of bankruptcy filers never enter the court room.� Your bankruptcy lawyer files your petition with the US Bankruptcy Court, BUT the case is reviewed by an attorney in the US Trustee’s office.� What does that mean?

It means that when you attend your bankruptcy hearing, you will sit in a very boring room that offers the ambiance of train station.� Lots of people coming and going, but no judge, jury, or bailiff.� NO COURTROOM.

The particular room I�enter for my creditor meetings in Providence, Rhode Island has a few scattered chairs and a table in front.� Nothing like a courtroom, nothing like you have seen on TV or the movies, and certainly nothing like you see in your nightmares.�

I have been to more than 3,000 hearings in two states and several districts.� Its almost always the same.��Little to no�excitement.� A properly prepared no-asset case should be that predictable.

You will sit across from the trustee and next to your attorney.� On the table is a small tape recorder and the trustee’s laptop computer.� Your case will be heard along with 4-5 others during a 30 minute block.� Its easy to see that most cases are allotted only 5 minutes.� Improperly prepared petitions, however,�take longer and often require continuing the case to a second hearing date.

The key to making your case less stressful is finding an experienced bankruptcy lawyer.� Get representation from an attorney who has attention to detail and gets it right the first time.� He can prepare you and your petition so that your hearing is uneventful.�

So where is the Bankruptcy Court hiding?� Well, it is either down the hall, a few floors above, or across the street.� Regardless, if you retain the best bankruptcy lawyer you can afford, most of you will never have to go there.

Mark Buckley�is a Warwick,�Rhode Island bankruptcy�lawyer and CERTIFIED FINANCIAL PLANNER professional�.���If you live in�Rhode Island�and would like a free telephone consultation to discuss your debt situation, please contact Mark Buckley.