June 2011

30 Jun Can I Discharge my Social Security Disability Overpayment in Bankruptcy

The Social Security Administration is a mess. Currently, SSA is in the midst of an overhaul in which they are attempting to go "paperless." Unfortunately, they are understaffed with many of the remaining employees overworked and poorly trained, resulting in an agency that routinely loses files, does not process information properly and does not have the resources to deal with fraud and waste.
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30 Jun Refinancing Without Reaffirming in Bankruptcy?

When you file Chapter 7 bankruptcy, one option you have is to reaffirm your mortgage. Do you have to reaffirm in order to refinance later? Of course not, but your lender may try to tell you otherwise. Other articles here discuss the actual process of reaffirming a debt. And the pros and cons of doing so. But as the mortgage market begins to unfreeze (slightly) these days, we are again hearing an old lie from mortgage servicers and mortgage salesmen (er, "mortgage bankers"): You have to reaffirm your mortgage or you can't refinance it. This is completely untrue. Reaffirming a debt makes you personally liable for the debt. It puts you at risk for a deficiency claim, if you don't pay the debt. But if you did not reaffirm, the mortgage did not disappear, it is still a lien on your house. It is still owed and must be paid unless you are willing to risk losing the property. The mortgage company -- the servicer -- virtually always wants you to make these payments. And they often don't care about the reaffirmation and will not waste their time (and your money) asking for it during the bankruptcy case.
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29 Jun Is Chapter 13 Becoming The New Debtor’s Prison?

Before I begin my rant on Chapter 13 and the way I see things turning against some debtors ( not all debtors), I would like to start by saying that I honestly believe that Consumer Bankruptcy is Financial Planning for the Future. Also, I still believe in the concepts of a "Fresh Start" and the "Honest but Unfortunate Debtor". These are concepts that I learned about a long time ago, concepts that I embraced and believed in and concepts that I still embrace and believe in today. However, at times my beliefs are tested. I don't believe that the bankruptcy system was designed to be oppressive, but it is turning out that way for some individuals. Likewise, I don't think the Bankruptcy Code was designed to take away a person's incentives to work hard and create wealth, but it is turning out that way for some individuals. I do believe that the bankruptcy code should be designed to instill in all debtors the opportunity to put the past behind them and move forward as positive and productive members of society. Back in 2005, Congress sent President Bush an alleged Consumer Protection Bill (BAPCPA), and he signed it. Since that time, Debtor's in Chapter 13 have had to deal with new rules on how they file their case, how they can spend their money and most importantly, how they plan for the future. Remember back in 2005, the real estate market was going like gang-busters and individuals were investing in real estate as part of their retirement planning.
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