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Could the CFPB’s Complaint Database Go Dark?
Reprint from Findlaw, By Christopher Coble, Esq. on May 15, 2018 12:59 PM
In the wake of the 2007-08 financial crisis, Congress created the Consumer Financial Protection Bureau, an agency tasked with protecting consumer rights when dealing with banks, credit unions, debt collectors, mortgage servicers, payday lenders, securities firms, and other financial institutions.
Part of the CFPB’s mission is taking, compiling, and tracking consumer complaints in a massive database, a database that, as of this writing, remains publicly viewable, searchable, and even downloadable. But interim CFPB head Mick Mulvaney (Trump’s “temporary” appointee to head CFPB) has indicated the agency may shut down public access to the complaint database.
Public Peeves
The database contains more than 1.5 million consumer complaints regarding their bank accounts, credit cards, mortgages, and other financial services. And while federal law requires the CFPB to maintain the complaint database, it does not require that it be made public. “I don’t see anything in here that I have to run a Yelp for financial services sponsored by the federal government,” Mulvaney said during a speech at an American Bankers Association meeting last month. “I don’t see anything in here that says that I have to make all of those public.”
Unlike Yelp, however, the CFPB gives companies an opportunity to determine whether the person making the complaint is in fact a customer and file a written response before any of the information is made public on the database. Whether companies will have the same motivation to respond to consumer complaints if the database is made private, however, is up for debate.
Pay to Privatize?
Bribery at its finest.
Why pull the database from public view? As the Washington Post points out, eight of the 10 most complained about companies made significant contributions to Mulvaney’s political campaigns, and 19 of the top 30 donated over $140,000:
- Equifax: Subject of 83,252 complaints (the most), and contributed $5,000;
- Experian: Subject of more than 72,000 complaints, and contributed $6,000; and
- JPMorgan Chase, Bank of America, and Wells Fargo: Subjects of more than 50,000 complaints each, and contributed thousands of dollars, all according to a report by Public Citizen.
“Is it possible,” wondered Michael Tanglis, senior researcher for Public Citizen and author of the report, “that Mulvaney’s horrible idea of hiding the CFPB’s complaint database is connected to the fact that the most complained-about companies contributed to him?”
The CFPB’s database isn’t hidden from the public yet, so if you want to read complaints (or post one of your own) now’s the time to do it.
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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. As a teacher and retired law professor, Diane believes in offering everyone, not just her clients, advice about the Arizona bankruptcy and foreclosure laws. She is also a mentor to hundreds of Arizona attorneys. 
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*Important Note from Diane: Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Trump’s Lackey Trying to Hide Complaints About Banks and Other Big Businesses appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Your bankruptcy case will make much more sense if you know the roles of the people involved, starting with debtor, creditors, and clerk. Understanding the roles in Bankruptcy can be quite confusing, but our attorneys are here to help you through the confusion.
The Debtor
This is the “person” filing the bankruptcy case. An individual can file a case, as can a married couple. The “person” can also be a corporation, partnership, or some other kind of business entity. A sole proprietor business is not legally a separate person so it cannot file its own bankruptcy case. The sole proprietor files an individual case which includes the business.
A debtor must qualify to file bankruptcy. Sometimes qualifying is very easy; sometimes it can be difficult. See Section 109 of the U.S. Bankruptcy Code on “Who may be a debtor.” Also see Section 521 on “Debtor’s duties.” Your primary duty as the debtor is to deal honestly with the bankruptcy system to get the relief the system is designed to provide you.
The Creditors
These are the businesses or individuals to whom the debtor owes a debt. A debt is money owed based on some right to payment by the creditor. A creditor’s right to payment is usually for a definite amount. It’s usually based on a contract or transaction with easily determinable dollar amounts. Likely you owe all or most of your creditors a definite dollar amount. But a creditor’s claimed right to payment can also be “unliquidated”—for an unknown amount. An example is a debt owed to the creditor based on a personal injury the debtor caused in a vehicle accident. Or the debt can be disputed. An example is that same personal injury from an accident, when it’s unclear whether the debtor was at fault.
Debts owed to the creditor can be secured by collateral such as your home or vehicle, or whatever you purchased. Debts can also be secured involuntarily, such as an income tax with a recorded tax lien. One of the biggest areas of contention in bankruptcy is how collateral is treated between debtors and secured creditors.
Debts owed to the creditor are mostly not secured by anything—they are unsecured. The creditor has no lien on anything the debtor owns. But unsecured debts of different types can be treated very differently as well. Most unsecured debts are discharged—legally written off—in bankruptcy, but some are not. Child support, some income taxes, and most student loans are not. Creditors are treated the same in bankruptcy, as long as the debts owed to them are of the same legal category. Otherwise, they can be treated very differently.
The Bankruptcy Clerk
The clerk takes care of most of the crucial but mundane operations of the bankruptcy system. The clerk’s office handles the clerical tasks within the bankruptcy court, most of which is now done electronically.
Your attorney files your case through a very secure internet connection with the clerk’s office. The clerk maintains your bankruptcy file, mails and sometimes electronically delivers most (but not necessarily all) of the important formal notices, runs the bankruptcy court calendar, and does lots other similar tasks. If you are a debtor not represented by a bankruptcy lawyer, you would deal a fair amount with the clerk. As a debtor represented by lawyer, you would likely never deal directly with the clerk.
Schedule a Free Consultation with Your Tacoma Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Oregon State. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post Roles of The Debtor, Creditors, and Clerk in a Bankruptcy Case appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
Using the Bankruptcy Laws to Your Advantage
One of the basic principles of bankruptcy is that you usually can’t favor one debt over your other debts. You can’t except when the law favors that debt for some reason. In various ways, creditors are recognized to be legally different. For example, secured creditors have rights over your property that you’ve given as collateral, rights that unsecured creditors don’t have. Also, bankruptcy does not discharge (write off) certain debts. These include child support, many types of taxes and many student loans, and certain other debts. These can’t be discharged while most debts can. Paying off Creditors With Chapter 13 Bankruptcy may be an option for you.
One of the huge benefits of Chapter 13 is that it turns to your advantage the ways that the law requires you to treat debts differently.
Catching up on Your Mortgage Arrearage
The law highly favors residential mortgage debts, especially your primary mortgage. Why? The idea is that these lenders should be protected in bankruptcy to lessen their risks. Arguably this encourages more investment in the residential mortgage capital markets, to make mortgages more readily available to homeowners.
So, if you were behind on your home mortgage and wanted to keep the home, you’d have to catch up. You can’t escape doing so just because the home is worth less than the debt (as you often can with a vehicle loan). You would have to catch up whether you filed a Chapter 7 “straight bankruptcy” case or a Chapter 13 “adjustment of debts.”
The difference is that in a Chapter 7 case you would have a limited time to catch up. You would usually have much more time in a Chapter 13 case. That means that your monthly catch-up payments would almost always be less. Also, because in a Chapter 13 payment plan you are usually only required to pay what you can afford, this means that catching up on your mortgage is fit within paying any other important debts that you must pay (such as income taxes and/or child support.)
If your home is one of your highest priorities, and you are behind on the mortgage payments, then consider using Chapter 13 to catch up.
Child Support Arrearage
Another kind of debt that is highly favored in the law is child support. As a result, if you get behind on support payments, the collection procedures that can be used against you are extremely aggressive. There’s the usual potential garnishment of your bank accounts and paychecks. But In most states you also face the possibility of losing your driver’s license. There’s also the possibility that your occupational or professional license could be taken from you.
Chapter 7 provides no direct help if you owe back support. The “automatic stay” that protects you from other creditors does not even apply to support debt under Chapter 7. This means that the aggressive collections can just continue; the bankruptcy filing has no effect on it.
But a Chapter 13 is very different. The “automatic stay” does protect you and your property from collection of the support arrearage. You ARE protected from support collections, as long as you follow some strict rules. After the Chapter 13 filing you must pay ongoing regular support payments, and your Chapter 13 plan payments. Through those plan payments, you have to pay off the entire support arrearage before completing the case. But you want to pay it off because you don’t want to be current when you finish the case and lose the protection it provides.
In a Chapter 13 case, you essentially take money away from your other creditors to pay off the support arrearage. Often your support arrearage is paid 100% before you pay anything to the rest of your unsecured creditors.
Schedule a Free Consultation with Your Tacoma Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Washington State. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (253) 780-8008 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post Paying Off Important Creditors With Chapter 13 Bankruptcy appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
By Dan Rivoli and Erin Durkin
The city has indefinitely pushed off selling more taxi medallions as the market for the once-valuable medallions continues to plunge.
Mayor de Blasio's executive budget assumes no cash will come in from taxi medallion sales for the next five years.
The taxi medallions — once worth as much as a million dollars each — have fallen off a financial cliff as yellow taxis took a beating from competitors like Uber and Lyft. This year medallions have been selling for less than $200,000.
The city last sold 350 medallions in the 2014 fiscal year, and is authorized to sell 1,650 more under state law.
Since then, years of city budgets have projected revenue from the taxi sales that never materialized. As of November, the spending plan assumed $731 million would come in over five years.
Hizzoner's latest budget dispenses with the notion medallions will be flying off the rack any time soon.
"This change allows the city to continue to monitor the medallion market, and does not foreclose any medallion auctions at a future date," Taxi & Limousine Commissioner Meera Joshi (photo below) said Thursday at a City Council budget hearing.
"The prices have come down considerably," she said, adding that it's also become impossible for would-be buyers to get loans. "All the transactions are going to be without financing and all cash, which is certainly going to depress the value of it."
Matthew Daus, a former TLC chairman, said it was a smart move by the city to recognize the reality on the street.
"They'd be crazy to do a sale at this point in time," he said, noting that putting additional yellow cabs on the street amid declining ridership would have hurt already-suffering drivers.
Medallion owners have complained that they invested their savings in what they thought was a sure bet, since the law says only yellow cabs can take passengers who hail them on the street.
But that didn't account for apps like Uber, which is legally treated like a car service arranged by phone.
"The drivers are being hurt and the city is being hurt by the way this whole situation has been managed," said Carolyn Protz, a member of the NYC Taxi Medallion Owner Driver Association.
The collapse of the yellow cab industry has led to four driver suicides in recent months, industry advocates say.
The city has seen an influx of for-hire drivers, mostly for e-hail apps — doubling the number from 90,000 to 180,000 since 2011.
Officials say they're again looking to rein in the growth of Uber, both to cut down congestion and give a break to yellow cab drivers. A push by de Blasio to cap the number of cars the company could deploy three years ago collapsed.
The city also wants to find a way to bolster drivers' incomes.
"The number of licensed drivers has outstripped ... demand," Joshi said. "The administration's goal is to establish a regulatory framework to protect drivers' incomes."
Copyright © 2018, New York Daily News
Going through financial hardship is never easy, especially in our present day. For some people, incurring debt is the only way to keep their head above water. In some instances, an unexpected accident or illness can put any person under extreme financial duress. No matter the circumstances surrounding your financial situation, the results can be […]
The post Benefits of Chapter 7 Bankruptcy in California appeared first on The Bankruptcy Group, P.C..
Step 1
There are numerous Steps During a Bankruptcy. You usually start the bankruptcy process by meeting with a lawyer for an interview. Most lawyers offer a free consultation. The interview should not really be any less than one-half hour. The lawyer will usually provide you with some forms to fill out. If you are comfortable with that lawyer, you usually pay a fee deposit at that first meeting. The fee deposit can differ, depending on the type of case you are filing and the lawyer’s estimation of complexity, but recognize that most bankruptcy cases really are not horribly complex, so you should not usually have to pay a huge fee up front to retain the lawyer.
Most lawyers want your business, so the lawyer should not have any problem with you going home to think it over before putting down any deposit. If you get lots of pressure to pay immediately, perhaps you should be wary of that lawyer. At the first meeting, the lawyer is required by law to provide you with certain written disclosures if he offers to take your case. A lawyer who does not provide the written disclosures for you to take home should be avoided because that means the lawyer either does not know what he is doing, or perhaps even worse, does not respect the Federal law that strictly governs his relationship with you.
Step 2
In addition to the mandatory disclosures, the lawyer should send you home to gather information, providing you with a list. In Oregon State, a modest amount of information needs to be presented to the lawyer’s staff so that the requisite paperwork can be prepared for you to sign.
Step 3
You must complete an online mandatory pre-bankruptcy credit counseling at home. This is an easy to complete tutorial that takes about one hour and fifteen minutes to finish. It is done over the internet or over the telephone. You are not required to take the Oregon credit counseling if you are on active military duty in a combat zone or you are physically or mental impaired to such an extent that you cannot fulfill the credit counseling requirement. Once you complete the course you will receive a certificate that you must file along with your bankruptcy petition.
Step 4
After your gather the information, you call the attorney’s staff to arrange a date and time to drop of the information that is required to prepare your paperwork. When all the information is dropped off, then the lawyer’s staff works on setting a document signing date and time for you to meet with the attorney once again.
Step 5
At the signing appointment, you come to the office and review the paperwork prior to signing it. You then meet with the attorney to make any corrections or iron out any questions or problems. A signing appointment can last anywhere from 15 minutes to two hours, depending on the complexity of the case.
Step 6
Within a few days, the lawyer’s staff files the case electronically to the Court.
Step 7
About six or seven weeks after the case is filed electronically to the Federal Bankruptcy Court, you then attend Court with the attorney at what is called the 341 Meeting of Creditors. You and your lawyer meet with the Judge’s designee or assistant (called a Trustee). The Trustee and your attorney sit with you around a table and the Trustee asks you some questions to ensure that you are being honest in your documents and that you have not left out any required information. There are usually eight to 12 cases scheduled every hour at Bankruptcy Court for the 341 Meeting of Creditors, so it is rare that you would be questioned for more than four or five minutes.
Step 8
About two months after your 341 Meeting of Creditors, your case is discharged in Chapter 7. In Chapter 7, your case is usually “closed” and thus finalized about two to six weeks after the issuance of discharge.
However, if you are in a Chapter 13 case which does repay some funds to some creditors, your proposed plan of Chapter 13 reorganization drafted by your attorney is usually approved by the Court about two to three months after your 341 Meeting of Creditors because there is such a local backlog of Chapter 13 cases. In Chapter 13, you start your monthly “plan payment” to the Chapter 13 Bankruptcy Trustee about 30 days after the filing of the case, and you make payments for 36 or 60 months. How long you must pay in a Chapter 13 plan (36 months vs. 60 months) and how much debt you must repay in Chapter 13 (1.0% vs. 99.9%) are complex topics best discussed with your attorney or his or her staff, because the two items (length of plan and debt repayment) are very complex calculations based upon how much you have been earning in the six months leading up to your bankruptcy filing.
Schedule a Free Consultation with Your Tacoma Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Oregon State. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post General Steps During a Bankruptcy Process in Tacoma appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
Through Tacoma bankruptcy, you may be able to and want to pay a co-signed debt. If not, you need protection from that debt and from your co-signer. A friend or relative may have helped you earlier by co-signing a debt for you. But now you find yourself needing relief from all or most of your debts through either a Chapter 7 “straight bankruptcy” or a Chapter 13 “adjustment of debts.”
What happens to your co-signed debt? And what happens to whatever responsibility you may feel towards your co-signer? What if you simply can’t afford to pay the co-signed debt now or at any time soon? You may no longer want to pay your co-signer because your relationship has soured. Your co-signer may be the one who received the benefit of the debt and should pay it back. Or you may still want to pay it eventually but have no idea when. In all these situations you need legal protection against your co-signer.
Your Legal Obligations to the Co-Signer
You need legal protection from your co-signer when you file a bankruptcy case because you either have a clear legal obligation to him or her, or at least a significant risk of such an obligation. Either way you should take care of it within your bankruptcy case.
You have a clear legal obligation to your co-signer if the two of you formalized the terms of that obligation, perhaps in writing but orally may be enough. The basic terms would include who was supposed to pay the debt and what would happen if that person did not pay it.
For example, you and your co-signer may have explicitly agreed that you would be responsible for making all the payments on the debt, and that if you did not make any payment on time so that your co-signer had to pay it, then you would owe him or her however much he or she paid.
Unclear Obligations
Practically speaking often when two people jointly share a debt, the obligations between them are often not clearly agreed upon and are seldom put into writing. But even then, legal obligations could arise between them based on their common understanding.
For example, assume you needed a co-signer on a loan for your business, and your sister agreed to co-sign it. You and your business received all the benefits of the loan. Then when later you didn’t pay the loan and your sister had to pay it off, she would likely have legal grounds to come after you for the amount she paid.
Including Your Co-Signer in Your Bankruptcy
Either way, whether your obligation to your co-signer is legally clear or not, if you are filing bankruptcy and not paying the co-signed debt you need to discharge whatever obligation you do have to that other person. You do this by listing your co-signer as a creditor in your bankruptcy schedules.
To emphasize, you should do this even if you think you don’t really have legal liability. For example, you may remember the co-signer telling you that if you can’t make the payments he or she would do so and wouldn’t come after you for those payments. Well, he or she may remember it differently. It’s better to err on the side of caution and cover whatever legal liability there may be.
Protection against Your Co-Signer
Once you file bankruptcy, your co-signer—just like all the rest of your creditors—is legally prevented from contacting you to collect the debt. He or she can’t try to make you pay the underlying co-signed debt (which you’ve also included as a debt in your bankruptcy documents). The co-signer also can’t pressure you to pay him or her directly.
If your co-signer tries to do either of these, he or she would be violating the “automatic stay,” the law that prevents creditors from trying to collect during a bankruptcy case. And if you were pursued by your co-signer after the bankruptcy is completed and your obligations legally discharged, he or she would be in violation of the injunction against attempting to collect on a discharged debt. These are both serious violations of federal law.
Paying Your Co-Signer without Legal Obligation
Including your co-signer as a creditor in your bankruptcy documents takes away your legal obligation. It is up to you whether you continue to have a moral or any other kind of obligation to the co-signer. The benefit to you is that if you do decide to pay your co-signer or the co-signed debt, it will be done without legal pressure. You will instead be able to pay whenever and to whatever degree your sense of moral or personal obligation tells you to.
Schedule a Free Consultation with Your Tacoma Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Washington State. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (253) 780-8008 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your situation.
The post Bankruptcy and Your Co-Signer. What Happens Next? appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
Discharge Your Other Debts So You Can Pay Your Taxes
Ask yourself this one crucial question: if you filed a Chapter 7 case and discharged all or most of your non-tax debts, would that leave you with enough monthly cash flow to enable you to reliably make large enough monthly payments to the IRS/state on whatever tax debt(s) the Chapter 7 would not discharge, so that those taxes would be paid off safely and a reasonable time? Filing for Chapter 7 can help you with your Income Tax Debt.
“Safely” refers to the reality that you would be dealing directly with the tax authorities after the Chapter 7 case. And you (and maybe your lawyer) would be doing so without bankruptcy protection once your Chapter 7 was completed.
That’s not a problem if you arrange to pay a monthly tax installment payment that you can confidently afford. The expectation is that you will be able to once you discharge of your other debts through your Chapter 7 case, but you also must be able to maintain those tax payments until the tax is paid off.
A Chapter 7 is a good idea if you don’t need a Chapter 13’s continuous protection from creditors throughout the payment process. That protection is especially valuable if your circumstances change in the future. The Chapter 13 procedures are likely more flexible than that of the IRS or the state.
“Reasonable time” refers to the reality of ongoing interest and penalties assessed by the IRS and state agencies. These will almost always continue to accrue throughout the time you are making installment payments. The taxing authorities are sometimes relatively flexible about stretching out the payments (and sometimes they’re not). But you need to look at how much the ongoing interest and penalties will add to the amount you must pay before you’re done.
How to Know Whether You Will Be Able to Pay Non-Discharged Tax Debt
How can you tell in advance that you will be able to afford to pay taxes that you can’t discharge? How can you tell if you’ll be able to do so safely and within a reasonable time?
First, it means calculating how much a Chapter 7 case would help your monthly cash flow and your longer term financial stability by discharging your other debts.
Second, you need to know what the IRS and/or state tax authority will likely accept as monthly payments, given the amount of your remaining tax debt. From there the estimated additional interest and penalties can be roughly calculated.
Your bankruptcy lawyer will help you with these projections and calculations. Then he or she will counsel you with the decision about whether you are a good candidate for cleaning your slate with Chapter 7 and then paying your remaining tax debt directly.
Discharge Your Other Debts So You Can Settle Your Taxes
A similar analysis comes into play for using Chapter 7 to position yourself to settle your taxes instead of just paying them through monthly installments. The IRS may allow a taxpayer to settle a tax debt through an Offer in Compromise, and most state agencies have similar procedures.
This choice—between filing a Chapter 7 case and then attempting to settle the remaining taxes vs. just filing a Chapter 13 case to handle the taxes—is likely more difficult to make than the installment payment choice above. That’s because tax settlements 1) take much longer to approve, and 2) are less predictable. The tax authorities tend to have relatively clear monthly payment parameters, but tend to use more discretion with settlement.
Some bankruptcy lawyers regularly handle Offers in Compromise and state tax settlements, others do not. If not, your lawyer will be able to refer you to a lawyer or accountant who does.
Regardless, the same basic analysis applies here as with installment payments. Find out how much a Chapter 7 bankruptcy would help clear away your other debt. Determine how that would position you to make a settlement offer for the remaining taxes. Then assuming some sort of settlement would likely be approved, would it be feasible and reasonable compared to what would happen in a Chapter 13 case?
To oversimplify, file a Chapter 7 case instead of a Chapter 13 if the taxes you’re left with can very likely be handled with a safe and reasonable installment payment plan, or with a settlement. Otherwise file a Chapter 13 case for more protection and flexibility.
Schedule a Free Consultation with Your Portland Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Portland, Oregon. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post Can Filing for Chapter 7 Bankruptcy Help with Income Tax Debt? appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
An Automatic Stay is when you file a bankruptcy case creating one of the most powerful tools in bankruptcy—the “automatic stay.” This protective order automatically goes into effect the instant Northwest Debt Relief Law Firm files your case at the bankruptcy court and “stays”—which means stops—all collection activity against you and anything you own.
What Creditors Can’t Do
The Bankruptcy Code includes a list of what creditors cannot do because of the “automatic stay.” Focusing on those applicable to the IRS/state, creditors can’t:
start or continue a lawsuit or administrative proceeding to recover your debt
take possession or exercise control over your property
create or enforce a lien against your property
collect any debt that exists as of the time your bankruptcy is filed
How long does the automatic stay protect me from creditors?
The automatic stay is in effect until your bankruptcy closes. It covers more debt collection than the discharge. Student loans, some back taxes, fines and domestic support obligations are not covered by the discharge. The automatic stay covers student loans and back taxes. Child support actions are not covered by the automatic stay. Fines are not covered either. The IRS can continue a tax audit without violating the stay, but cannot try to collect from you.
A creditor can ask the court to “modify the automatic stay”. If they persuade the court they have a good reason to continue debt collection, the stay is modified only for that one creditor. Usually that means a car company or mortgage company can continue foreclosure or repossession if you are not keeping up on the payments. They can modify the stay in as little as a month.
As Applied to the IRS/State
Income taxes are not treated like most debts as to their discharge (legal write-off) in bankruptcy. Taxes are not discharged unless they meet a series of conditions. But the IRS and state tax agencies ARE in most respects treated the same as other creditors when it comes to the “automatic stay.”
The Bankruptcy Code says that the “automatic stay” “operates as a stay, applicable to all entities.” (Section 362(a) of the U.S. Bankruptcy Code.) So are the IRS and state tax agencies “entities”? The Code defines an “entity” to include a “governmental unit.” (See Section 101(15).) So the IRS and all tax-collecting “governmental units” are indeed governed by the “automatic stay.”
If the IRS/State Tries to Collect Anyway
Just like any other creditors, the IRS and state tax agencies act illegally if they violate the “automatic stay” by continuing to collect on a debt or taking any other of the forbidden actions.
If you are “injured by any willful violation of [the automatic] stay… [you] shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages” against the IRS/state. (See Section 362(k).) The truth is that the IRS and various state tax agencies have violated the “automatic stay” on occasion. And they’ve had to literally pay the consequences. They now tend to follow the law and respect the “automatic stay” appropriately.
Special Exceptions to the “Automatic Stay” for “Governmental Units”
The IRS and state tax agencies do have some specialized exceptions—things they can continue doing in spite of your bankruptcy filing. (See Section 362(b)(9).) But these are generally sensible exceptions, applying more to the determination of a tax amount than to its collection.
The tax agencies can:
demand that you file your tax returns
make an assessment of the tax and tell you how much you owe
do an audit to figure out the amount you owe
They cannot take any actions to force you pay the tax.
Schedule a Free Consultation with Your Tacoma Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Washington State. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (253) 780-8008 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
The post What is an Automatic Stay and How It Can Benefit You appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
Chapter 13 Bankruptcy tools gives you options to help you manage your home mortgage. Chapter 13 involves a flexible payment plan that’s especially helpful with debts you can’t write off, or “discharge.” It can be much better if you own income taxes, child or spousal support, or student loans, for example. Chapter 13 can also be incredibly helpful with debts you don’t WANT to discharge, like your home mortgage. Chapter 13 protects you for three to five years while to deal with debts you can’t or don’t want to discharge. You then get a discharge of the debts that you didn’t pay, catch up on and/or partially pay. Especially if you have fallen behind on your mortgage and are at risk of losing your home to foreclosure, Chapter 13 is often the better option.
Saving Your Home from Foreclosure
Chapter 13 stops a foreclosure if you have one pending. And it often stops one from starting if you are on the brink of that happening. You then have 3 to 5 years to catch up on your missed mortgage payments. Having such a long time to catch up makes it easier and more likely that you can and do end up catching up and saving your home.
Usually you catch up by chipping away at the arrearage month-by-month, but not necessarily. Chapter 13 can be very flexible. You may be allowed to catch up in other ways. For example, your payment plan may allow you to sell or refinance your home a few years after filing the case. This can give you some valuable flexibility, such as enabling you to put off catch-up payments until then. This can also give you time to build up more equity for the sale/refinancing. It may allow you to stay in your home for a crucial length of time. For example, it can be a great way to be able to stay within a local school district another couple years until a child graduates from high school.
A second or third mortgage “strip” is a potential benefit only available under Chapter 13. If your home is worth no more than your first mortgage, the second mortgage can be removed from your home’s title. If so, you immediately stop paying on that junior mortgage, significantly and permanently reducing the monthly cost of keeping your home Stripping off the junior mortgage also gets you closer to building equity. (To do a third mortgage “strip,” the home can’t be worth more than the amount of the first and second mortgage balances combined.)
If you’ve fallen behind on your property taxes, Chapter 13 also gives you more time to catch up on it. As with your mortgage lender, during your catch-up period, your home is protected from the taxing authority’s foreclosure. You are also protected from your mortgage lender itself foreclosing for the reason that you not having paid those taxes.
Bankruptcy allows you to remove most judgment liens from your home title permanently. You may pay a part of the underlying debt (that resulted in the judgment) through your Chapter 13 plan, but most of the time that individual debt does not increase the amount you are required to pay. And sometimes these debts receive nothing at all. Then at the end of your case whatever amount is still unpaid is all discharged. Judgment lien removal is also available in a Chapter 7 case, but can be especially valuable in Chapter 13 in combination with the other tools.
Chapter 13 also deals relatively well with a lien on your home on debt that bankruptcy does not discharge. So if you have a lien based on child/spousal support arrearage or relatively recent income taxes, you pay off that debt through your Chapter 13 plan, while being protected from collection efforts of these creditors. And then at the end of your case, with the debt paid, the lien is released from your home’s title.
Schedule a Free Consultation with Your Portland Bankruptcy Attorney
When it comes time to file for bankruptcy, you need a compassionate and skilled attorney who will be able to guide you through the process as cleanly as possible. Northwest Debt Relief Law Firm, we can help you with filing for Chapter 7, Chapter 11, and Chapter 13 bankruptcy in Portland, Oregon. We will be there every step of the way to help navigate you through the often-complex and difficult bankruptcy process.
Give us a call at (503) 912-8809 to schedule a free consultation with one of our bankruptcy attorneys. If you have any other questions about bankruptcy, one of our attorneys will be more than happy to offer advice on your particular situation.
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