So, are you looking for information on bankruptcy?  There are a number of reasons that people go to the internet for research if they are thinking of filing for bankruptcy, even before consulting a lawyer.

Many people turn to the web to find information.  What you find on the internet varies from excellent to terrible, and if you don’t understand the subject, you might not know the difference.

Why do people look on the internet for bankruptcy information?  There are lots of reasons, but here are a few:

• They might think they can file bankruptcy without a lawyer.
• They may like knowing as much as they can before taking the next step.
• They may not think a lawyer will spend enough time explaining it, so they want to learn what they can in advance.
• They might not want to see a lawyer until they have decided they “need one”, in other words, they try to figure out in advance whether or not they will file bankruptcy before going to the lawyer to find out.
• They might be trying to avoid filing bankruptcy.

Bankruptcy is not always a one time event.  Unfortunately, despite the best efforts of many past bankruptcy filers, circumstances may come up where they face financial difficulties again.

Few of us could have predicted the economic difficulties of recent years, nor the high amount of unemployment, or drop in real estate values.

Many people think that if they filed a bankruptcy less than (7 or) 8 years ago, there is no help for them if they get into financial difficulty again.  That is not true.

The old law required 7 years between Chapter 7 discharges, so many people find information saying they didn’t think they can file for seven years.  This is one of the many changes in the bankruptcy laws make in BAPCPA, aka the 2005 New Bankruptcy Law.

Bankruptcy discharge can only be received every so often, but how often you can get a discharge depends on the type of case filed the first time and what you are trying to discharge, or even if you are trying to discharge a debt.

• Not all people file bankruptcy to get out of debt.  Sometimes, they just need help reorganizing the debts into an affordable repayment plan. 

Rachel Foley wrote an article which you can read  ( here )  setting out the time periods and she included a chart showing how long you have to wait to file between the various chapters.

• Even if you are not eligible for a ‘full’ discharge, you may still be helped and choose to file bankruptcy to help you with your debt issues.

Bankruptcy is not something that anyone wants to do, but it is often the best course of action for a consumer in debt.   Filing for bankruptcy is often seen as a failure, sign of weakness or immoral.  Understandably, people who file don’t go around telling everyone how much better life is for them now that they filed, but people sure are quick to mention how terrible it is to file.

In an effort to avoid filing bankruptcy, people will often try many different ways to avoid filing including working with a credit counseling company in a debt management program or a settlement program.

The NC Attorney General Roy Cooper announced in a press release that a settlement has been reached against “The Consumer Law Group of Boca Raton, Florida“,  a company described in the press release as a “bogus Florida law firm that falsely claimed it would reduce consumers’ debts…”

“Debt relief scams take advantage of struggling consumers, adding to their burden instead of helping them get out of debt,” Cooper said. “I’m pleased that we’ve been able to win money back for these consumers, money that can hopefully help them pay off bills and get on better financial footing.”

The North Carolina Attorney General’s Office sued this particular debt settlement company after consumers complained about all sorts of problems they had with the company.

The settlement by the Attorney General’s Office is a nice victory for consumers, however it took a a lot of work and a lawsuit to shut this company down.  Sadly, many more of these companies remain in business and more will pop up, playing on the desire of most people to try to honorably settle their debts.

The Attorney General took on one of the really bad companies and won, but the problem is that many of these companies are not acting in the debtor’s best interest and they are still out there.

(To see a news video on this story, go here)

Even if reputable, since none of them can offer legal advice since they aren’t lawyers, when you go to one of these companies, many just explain the program they offer and never give full information on alternatives that may be better for the individual.

And bankruptcy might be the better option – which is not something you want to discover after you have spent hundreds or thousands of dollars trying the alternatives.

Chapter 13 is a good way to pay what you can towards your debts, but protect you and your assets and keep your creditors away.  Some people pay all their debts off in Chapter 13 payment plans, but others pay a reduced amount.

Chapter 7 helps you get a fresh start fairly quickly, if you aren’t in a position to make payments.  You get to keep some of your property (for many people, they keep everything) and can allow you to get your budget balanced and provide for your family.

I encourage people with debt problems to first see an  experienced bankruptcy lawyer who can discuss all your options, since I feel that an  attorney  can explain how bankruptcy works, explain the myths about filing for bankruptcy, but also explore any non-bankruptcy options.

I often encourage clients who might have some discretionary funds available to pay towards their debts to to see a good credit counselor before making up their mind after seeing me.  That way they know that they have explored all their options and examine other viewpoints, but that their decision is based upon facts and sound advice.

Debt settlement or debt management programs might make sense for people who earn more money than they need to cover their regular and ongoing expenses, or who have a lump sum to pay towards debts that might not pay them in full.

However in considering these options, you would need to be sure that your budget is sound, and that it not only covers your monthly expenses but also includes things that don’t come up every month (like car maintenance, house repairs, medical bills, clothing, etc).

You don’t find yourself in financial trouble a few months or years down the road, after you use all your ‘extra’ funds to pay towards the debt program.    Especially when you should have seen those predictable emergencies coming.  (Also see Liz Pulliam Weston’s Article:  The $0 Emergency Fund)

A reputable credit counselor will not charge fees up front in North Carolina.  

• Charging fees up front for debt reduction, negotiation or debt settlement is not allowed in North Carolina.

The Consumer Law Group tried to get around this law by falsely claiming to be a law firm providing legal services.

You can read a number of past articles on dealings with the Consumer Law Group here  by Steve Rhode website.

If you just moved and you need to file for bankruptcy, don’t panic!  If anyone tells you that you don’t qualify to file because you haven’t lived in your new state for six months, don’t listen to them!  If a lawyer tells you that you can’t file until you have been in your new home for six months,  call another experienced lawyer.  If an attorney doesn’t know that you do not need to live in a new state for the full six months to file bankruptcy there, they probably are not as knowledgeable as you want for your attorney.

Here is the rule and it is pretty simple:

You are supposed to file for bankruptcy where you have lived the greater part of the preceding 180 days ….. in other words where you have lived for MOST of the preceding six months.

To make it even simpler:

The general rule is you need to have been there for 91 days.

That wasn’t so hard, was it?   If the bankruptcy attorney you are talking to doesn’t know that basic fact, what else don’t they know?

The concept of where you are supposed to file a case is called venue.  If you haven’t been in your new state for 91 days, you are supposed to file your case where you used to live , if you lived there long enough.    If you haven’t been in that state long enough or you have moved around a lot, it gets a little more complicated but any good attorney should be able to figure out where you are supposed to file and how long you need to be somewhere.  What exemption applies to you to protect your property is more likely to affect you than the venue question is.  To claim your new state’s exemptions, you have to have lived there for two years.

So, does it really matter that you haven’t been in your new home long?  Probably not.  Many people can wait a little while to file for bankruptcy.  In the time you have to reach the magic day, you can consult a lawyer, plan to file, pay your lawyer and complete paperwork.  Before you know it, you have been in the state long enough to pass 91 days.

If you have a true emergency filing situation, you should consider filing where you meet the requirements, or ask an experienced lawyer whether or not the 91 day rule is strictly enforced.  You may take a risk filing early, but you might not have much of a choice under the circumstances if you can’t get back to where you are supposed to be properly filed.

Bankruptcy might be able to help you get a car back that has been picked up by the Sheriff to sell to pay on a judgment claim, but it would be better not to wait until you see your car (or other property) being taken away to call a lawyer.  You might be able to do something to save it, but your options and time are limited.

“Hello, do you represent people in bankruptcy?  Could it help get back a car from the Sheriff who took it because of a credit card?

That was the point of the call I just got from a shocked person who had just watched the Sheriff take away a car, and from those few words I knew that someone

1) had not paid a credit card

2) had not made arrangements with the creditor

3) had [probably] ignored a lawsuit

4) had [most likely] ignored a notice to claim exemptions which would [likely] have protected the car from this creditor and

5) had never consulted a lawyer or at least investigated on the internet what happens when you ignore a judgment.

Many people think that credit cards can’t hurt them or affect their property, but once someone is sued and the creditor gets a judgment, all property from cars, personal property and even homes can be taken if the borrower doesn’t take action to protect themselves.

This debtor has to see someone NOW.  If bankruptcy can help, doing everything needed to file for emergency bankruptcy at the last minute can be difficult.   Bankruptcy can be filed within 24 hours, but it isn’t easy.   It just isn’t something that you want to be forced to rush into.

You might not be able to find  a lawyer to take your case at the last minute, it might be hard to pay your bankruptcy lawyer, or you might not be able to get the information needed to prepare your documents on such short notice.  Not only do you have to find a lawyer who has an open appointment to see you right away, but paperwork which is complicated  has to be prepared.

It can be unnerving to rush through a legal process without time to digest the implications of the process. Your choice of lawyers will be limited to those who can see you right away.  While you may be able to find a good lawyer at the last minute,  many experienced attorneys are booked days or weeks in advance.  If you find yourself facing an emergency situation, try to find a good experienced attorney but better yet, don’t wait until you are up against a wall to deal with financial problems.

Yes, in some circumstances a credit card creditor can have your property, your car or your house sold.  Don’t ignore lawsuits or you may find yourself watching your car being taken away because you didn’t pay a credit card, medical bill or other debt.

Bankruptcy Court in the Western District of North Carolina will have a new judge soon.  The Honorable George R. Hodges announced his retirement for November 2011, and after an extensive search it was announced that Laura Turner Byer will succeed him. 

Ms. Byers is familiar to those of us practicing law in Charlotte NC since she has been the law clerk to Judge Hodges for many years.   The law clerk is a lawyer who assists with research, decisions and other legal issues before the court.  Law clerks are instrumental in the operations of most courts, and Ms. Byer’s years of experience in our court should benefit all those who appear in front of her.  Judge Hodges may continue to work on a retired recall status as many retired judges do, but the soon to be Judge Byer will fill a third judicial position in the Western District, a space vacant since the Honorable Marvin R. Wooten stepped down from the bench.   There are already three bankruptcy judges in the Eastern District and Middle District of NC.

The Western District of North Carolina covers many counties from Anson, Union, Mecklenburg, Iredell, Wilkes and Alleghany,  encompassing the western region of NC all the way to the western state borders.  The WDNC has four permanent court divisions where it hears cases:  Charlotte, Asheville, Wilkesboro and Shelby.  Cases are normally assigned depending on the residence county of the debtors.   The judges traditionally split up divisions when holding court, will  cover other courts when needed, or split Chapter 7 and Chapter 13 motion days.  It is not known which divisions will be assigned to the new judge. 

The WDNC Court issued the following announcement on it’s website:

Announcement Regarding New Bankruptcy Judge:  We are pleased to announce that the United States Court of Appeals for the Fourth Circuit has appointed Laura Beyer to the position of U.S. Bankruptcy Judge for the Western District of North Carolina. Ms. Beyer will succeed the Honorable George R. Hodges upon his retirement in November 2011 and will be stationed in Charlotte, North Carolina.

Ms. Beyer attended Davidson College and graduated with a Bachelor of Arts degree in Political Science in 1993. She received her Juris Doctorate from the University of North Carolina School of Law at Chapel Hill in 1998. Prior to her appointment, Ms. Beyer served as the permanent law clerk to Judge Hodges and worked as an attorney at Smith Helms Mulliss & Moore, L.L.P.

The Judges and staff of the Bankruptcy Court for the Western District offer Laura warmest congratulations. We look forward to serving with her.  (posted 7/11/2011)

You file for bankruptcy for a reason, usually due to overwhelming debts.  But what if  your bankruptcy was dismissed, and you want to keep your bankruptcy case going?  There may be things you can do to save your bankruptcy case – if you act quickly.

Acting quickly and doing what you were supposed to have done can be the basis for reconsidering the bankruptcy dismissal.

It will be up to the bankruptcy judge whether or not your case can be reinstated, and that decision will depend on your circumstances.

• Failure to make Chapter 13 bankruptcy plan payments

Chapter 13 bankruptcy is set up to make payments on all or some of your debts over a period of time – normally 3 to  5 years.  Chapter 13 protect s your home by catching up missed house payments, protects assets, and writes down general unsecured debts to an affordable repayment amount.

The most common reason for a Chapter 13 dismissal is failure to make the required payments.

If you fall behind on your bankruptcy payments, the Trustee will likely file a Motion/Notice to Dismiss your bankruptcy.  The best thing to do is talk to your lawyer before your case is dismissed, and maybe your plan can be adjusted to make up for the missed payments.

• Changed circumstances

What if  you couldn’t pay your plan payments because you just didn’t have the money, but after the hearing you got a new job or a family member told you that they could give you the money to help?

These changed circumstances might be enough to convince a judge that you deserve another chance.    The judge is going to need to believe that the change in circumstances will  get you back on track, even though it came just a bit later than your dismissal hearing did.

Many bankruptcy judges understand that missed payments are not always because a debtor wasn’t doing their best.  Sometimes financial problems happen to the best people, and there just isn’t enough income to cover the basics.

It certainly helps if you had a good payment history during your Chapter 13, or otherwise followed the rules before you got behind.  It also is good if  you haven’t had multiple motions before the court.

In other words, it helps if you did everything you could, but the situation leading to your dismissal was beyond your control, such as a job loss or a true emergency.

• Not following Court orders or doing what you are supposed to do

Chapter 7 cases are dismissed for a number of reasons, but the most common one is that you didn’t do something you were supposed to do, like turn in all your documents or show up in court.   (Also holds true in Chapter 13).

You should call your attorney immediately to discuss if anything can be done in your case to fix the underlying reason behind the dismissal, and to help you file the appropriate legal documents to try to get it reinstated.  Your bankruptcy petition requires the disclosure of a lot of information, and if you left anything off or don’t get backup information to your trustee when asked, your bankruptcy case may be dismissed and you won’t get your discharge.

There are a few reasons that your attorney might advise you to ask the court to reconsider the dismissal and reinstate your case.  If you have a really good excuse for not doing what you were supposed to do, a judge might forgive you and let you resume with your case.

Another reason would be that your circumstances changed since your dismissal hearing, and with the new circumstances the judge might not have dismissed the case.

If a Chapter 7 is dismissed it may be a bit harder to get it reinstated, because Chapter 7 dismissals are usually based upon a failure to file documents, show up in court, or otherwise follow the rules.  These are often seen as having been in the control of the debtor, and a judge may find that if you don’t play by the rules, you can’t play in that game.

I often see  Chapter 7 cases dismissed in cases where the debtor filed Pro Se, or on their own without an attorney.

Not knowing the rules isn’t an excuse not to follow them and you must be prepared to get all your ducks in a row to comply with the rules.  It will help to have an attorney take over your case. It still will depend on the judge, local practice, how quickly you acted, the reason for the failure to act, and whether it would harm others to reinstate your case.

An attorney will probably charge you to file the Motion to Reinstate (depending on your fee contract and what your court allows), any work required to ’fix’ your issue, not to mention the cost of notifying all of your creditors of the motion and hearing.

If you get a Motion to Dismiss or any other motion in your case, you should always contact your lawyer as soon as you get it.  Dealing with the problem before your case is dismissed is always easier than trying to back track and get a judge to change his or her mind, not to mention a lot less trouble and cost.

If your case is dismissed, you should ask your attorney about filing a new case.  Not all judges will do reinstate, and the circumstances and timing have to be right.  It may be better to start over or you might have no other choice.  As with any decision to file for bankruptcy, this will be determined on a case by case basis depending on your particular circumstances.  Talk to s lawyer to find out what you should do.

• What if you want to dismiss your case and get out of bankruptcy?

In some cases, someone wants to dismiss their case.   If they are in Chapter 13, this may be easier than if it is a Chapter 7 you want to dismiss.  There are sometimes  alternatives to bankruptcy that might help you.

But if you want to save your bankruptcy filing, ultimately, the decision will be up to the judge.  If you are considering asking for dismissal of your case, talk to your lawyer first.

You do not go to jail for failure to pay an ordinary debt, but creditors sometimes like to threaten you with jail in order to get you to make a payment and scammers like to scare you out of your money too.  Don’t get scared by lies and tricks by collectors or false collectors.

Apparently scammers are making the rounds again with calls trying to trick people into giving up information. The information may be close enough to your real information and contain a name for a debt you owe, but the information may also be completely false!

Even if you owe money, it is illegal for creditors and collectors to threaten to arrest you for failure to pay an ordinary debt.  If they sue you, they have to follow proper steps.

See the following alert from NC Attorney General Roy Cooper.  It is good advice, no matter what state you live in.

Watch out for calls from “Federal State Bureau of NC”

Consumers have recently reported getting calls from the “Federal State Bureau of North Carolina,” telling them they owe a debt and must pay it or face jail time.  This is not a real law enforcement organization, and these are not legitimate calls from debt collectors.  The threatening calls come from (336) 505-7092, a Google Voice number that could be used by scammers anywhere in the world.

If you get a similar call:

• Don’t give out your personal information, particularly your bank account and credit card information.
• Check your credit reports for free at www.annualcreditreport.com or 1-877-322-8228 to spot any unauthorized credit cards or loans taken out in your name.
• Consider a free security freeze to block unauthorized use of your credit.
• Remember that legitimate debt collectors will provide you with written proof of a debt.  They are not allowed to use profanity or threaten you with violence or arrest, and they must follow rules about when and how they contact you.

You can report debt collection scams to our office by calling 1-877-5-NO-SCAM or filing a consumer complaint online.

This message brought to you on behalf of North Carolina Attorney General Roy Cooper.

Bankruptcy and lawyer/client confidentiality are strange bedfellows. Conversations between clients and their attorneys are usually confidential, although there are exceptions such as participation in ongoing crimes and preventing harm to others.   Additionally, the conversation must be between you and your lawyer without anyone else present, except perhaps a spouse who may have spousal privilege.

Many people are very nervous and scared about talking to a lawyer, so they will want to bring a friend or family member with them to the consultation.  If you bring a third person into the room, you may break that confidentiality and the information revealed may be used against you.  For most ordinary people going through bankruptcy, there isn’t anything to hide and so confidentiality isn’t a big issue.  In that case, you may find it helpful to have a trusted friend there to help you remember what you learn.

Confidentiality can be very important privilege between an attorney and their client depending on the nature of the conversation and what the legal issue is.  You’ve probably watched TV law shows, and seen someone put on the stand and forced to say things about the defendent?  Well, if the information is under the legal confidential umbrella, the lawyer can’t be put on the stand and forced to tell what she knows about her client.

Even without legal confidentiality, that doesn’t mean that your lawyer will go and tell everyone everything they know about you because they can. Lawyers do use discretion. However, if there is any concern about something you say to your lawyer being used against you, you should not have anyone else present for the discussion and you should speak to your attorney about the issue.

Bankruptcy attorney confidentiality can be limited anyway, depending on the specific state ethic rules of your attorney’s state. While the conversations you have with a lawyer are initially confidential, the bankruptcy laws require a debtor to disclose everything there is to disclose about assets, liabilities, income, debts and past financial dealings. No lawyer can deliberately file documents that don’t contain the truth, and confidentiality won’t shield the information.  They are not obligated to help you commit fraud, and lying under oath in preparation of bankruptcy documents is fraud.     Bankruptcy fraud is a serious matter, as explained by  South Carolina bankruptcy attorney Dana Wilkinson, and Oregon bankruptcy attorney Karen Oakes talks about fraud in her article Bankruptcy Basics: Bankruptcy Fraud can lead to Truth or Consequences

Ethical rules about confidentiality vary from state to state. Once your case is failure to tell the truth may be considered an ongoing crime of which an attorney, who knows of an inaccuracy, may have to inform the court of that error, omission or mistake.

I find that most people are careful to tell the truth, the whole truth and nothing but the truth in general, and they want the documents prepared correctly and clean so they don’t have to worry about anything coming back to bite them.  Besides that, most people don’t like to lie.