Filing for Bankruptcy

01 Sep Bankruptcy Basics: Why Does a Debtor Have To Take Credit Counseling Before Filing Bankruptcy?

In 2005, Congress adopted the Bankruptcy Abuse Prevention and Consumer Protection Act. That Act had not passed (it had been proposed many times) for over 8 years, but suddenly Congress took an interest in bankruptcy. That new law imposed new restrictions on filing bankruptcy for consumers (there is actually very little consumer protection within the Act). A new definition was placed within the Act for who could be a "debtor". That definition includes language that a debtor was a consumer who had completed a course in credit counseling and obtained a certificate as proof of that course completion.
Read More

24 Aug Student Loan Servicer Wolves

Debtors who successfully convince the court that they meet the stringent three-part Brunner test for hardship discharge of student loans may not be out of the woods if their loan servicer is Educational Credit Management Corporation also known as ECMC. ECMC is the default servicer for loans in bankruptcy in a long list of states, and serves as the primary servicer for Stafford and Plus loans in Virginia and Oregon. It is chartered as a nonprofit corporation that, according to its website, exists to provide a unique range of services to students, schools and lenders participating in the Federal Family Education Loan program. That appears to be just part of the wooly mantel for this wolf.
Read More

28 Jul Same Sex Marriages and Bankruptcy

Same sex married bankruptcy filers are treated differently from those of opposite sex. The federal Defense of Marriage Act from 1996 defines "marriage" and "spouse" to exclude same sex spouses. In Massachusetts and some other states, same sex spouses may file joint state tax returns...

Read More

17 Jul Knowledge of the Right to File a Bankruptcy Case to Stop Aggressive Collection Efforts can be the Difference between Life and Death for Some

A recent decision of the U.S. Court of Appeals for the Sixth Circuit reversed a decision of a Tennessee District Court and permits a grieving husband to sue on behalf of his deceased wife for emotional distress inflicted upon her by overly aggressive and deceptive collection attempts by Discover Card.  According to the facts of the case, the wife of the Plaintiff committed suicide shortly after running up approximately $15,000 in debt on discover cards.  When debt collectors working for Discover began threatening the wife with false claims that criminal charges would soon be pressed against her.  According to evidence obtained from her Doctor, the conduct of the debt collectors was a significant reason behind the wife's decision to commit suicide. 
Read More

13 Jul Collecting Child Support from a Bankrupt Debtor, Part Two

In Part One, collecting support and other family obligations was discussed. Let's take a look at what happens when a Chapter 13 is filed. In a Chapter 13 context, we'll talk about three kinds of debt: 1) child support or alimony that was past due at the time the bankruptcy was filed; 2) child support or alimony that comes dues after the case is filed; and 3) non-support obligations, like responsibility to pay certain debts, or reimbursement for the equity in an asset (lawyers refer to this as "property settlement"). Like Chapter 7, Chapter 13 does not change the obligation to pay ongoing support. In South Carolina, where I practice, the Chapter 13 trustees will not recommend confirmation of a Chapter 13 plan if post-petition child support is behind, if the trustee is aware of that default.
Read More