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If you are struggling with debt that you cannot repay, you should look closely into filing bankruptcy. Financial problems and debts are often caused by sudden unemployment, divorce, or emergency medical expenses that you have to pay off.  If you are tired of receiving unending creditor notices and calls from individual debt collectors, collection agencies, or credit card companies, consult with reliable bankruptcy attorneys. Aside from helping you understand the essentials of bankruptcy law, they can explain to you how to rebuild and have a fresh start through the bankruptcy process. Good bankruptcy lawyers will work closely with you and help you throughout the entire journey: from learning how to file bankruptcy forms all the way to discharge.
There are different types of bankruptcy. Your assets, and liabilities, types of debt, and future plans will factor into the specific bankruptcy case that you will choose. Filing a petition in bankruptcy will help you resolve most of your debt problems, such as credit card bills, medical bills, and certain tax debt.
There are two common types of personal bankruptcy. Chapter 7 or the liquidation bankruptcy and Chapter or the reorganization bankruptcy. Your bankruptcy attorney can explain the specifics of each. Once your bankruptcy petition is approved by the bankruptcy court, an automatic stay shall be effective immediately. Such bankruptcy protection will prohibit any collection activities by the creditors.
Filing Chapter 7 Bankruptcy
Chapter 7 bankruptcy proceeding is a debt elimination plan.  It usually takes 90 days to successfully complete this bankruptcy procedure from filing a petition for bankruptcy to a discharged debt.  Here, your nonexempt assets will be liquidated, with the list of exemptions varying from state to state.
To be eligible for filing Bankruptcy Chapter 7, you must pass what is called a bankruptcy means test. This will look into your monthly income and total living expenses. The means test will compare your income with the state median income and determine your eligibility as set by bankruptcy rules.
Filing for Bankruptcy under Chapter 13
If a debtor does not qualify to file for Bankruptcy Chapter 7, another option is to pay back your debts through a Chapter 13 repayment plan. Restructuring your debts will help stop foreclosure and wage garnishment while you make monthly payments to creditors. Essentially, after filing Bankruptcy Chapter 13, you will be able to keep your assets while having sufficient time to repay what is owed.
When you file bankruptcy under Chapter 13, you reorganize your finances and propose a payment plan that will allow you to pay all your debts. If you are considering Bankruptcy Chapter 13, note that your debt-repayment plan usually takes three to five years. After which, your unsecured debt may be discharged. 
Bankruptcies will protect you from harassment and lawsuits. Consult with a bankruptcy lawyer as soon as you can. They will help you with debt management and in understanding relevant bankruptcy laws. Contact us at the Northwest Debt Relief Law Firm for legal help regarding bankruptcy cases.
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The post Rebuilding and Getting a Fresh Start through a Bankruptcy Filing appeared first on Vancouver Bankruptcy Attorney | Northwest Debt Relief Law Firm.

The Nebraska bankruptcy court discharged student loan debts for a 50-year-old debtor raising a disabled grandson. See In re Mudd. The Court overruled the Department of Education’s argument that a debtor must work two jobs to meet her burden of showing undue hardship.
In discharging the student loans the Court pointed out several factors:

• The debtor has never earned more than $13 per hour.
• Prospects of higher income in the future was speculative.
• The debtor rented a single bedroom apartment that she shared with her disabled 17-year-old grandson.
• The debtor was eligible for a zero-payment Income Based Repayment plan with the Department of Education.
• The debtor failed to renew the income-based program for no apparent reason.
• The debtor had no retirement savings, pension accounts or investments of any kind.
• The debtor had recently purchased a 2016 Nissan Rogue with payments of $414.65 per month.
• The debtor suffered from diabetes, high cholesterol, gastro reflux disease, menopause, severe allergies and a torn rotator cuff.
• Between 2006 and 2015 she received 26 student loans .
• She appeared to owe in excess of $75,000 of student loans.
• At the time of trial the debtor worked 40 hours per week earning $12 per hour and worked a part-time job as a FedEx package handler.
• Medical bills and garnishments were the immediate cause of the bankruptcy filing.

TOTALITY OF CIRCUMSTANCES:
The court applied the “Totality of Circumstances Test” used in the 8th Circuit in reviewing the application.  Three factors are considered:

1. The debtor’s past, present and reasonably reliable future financial resources.
2. A calculation of the reasonable living expenses of the debtor and her dependents.
3. Any other relevant facts and circumstances.

A long review of the debtor’s income earning record indicated that this debtor was already earning at her peak capacity and that it was doubtful and speculative that her income would increase substantially beyond its present level. The debtor showed good faith in working a full-time job and part-time job to pay for basic living expenses.
The court also agreed that the debtor’s living expenses were reasonable.
MUST A DEBTOR WORK TWO JOBS TO DISCHARGE STUDENT LOANS?
The Nebraska bankruptcy court scoffed at the notion that a debtor must work two jobs before they can show good faith in discharging student loans.

At trial, DOE insinuated that Mudd must maintain two jobs to meet her burden of
showing undue hardship. It asserted that, even if Mudd obtains a higher-paying
customer service representative position where she “only” worked 40 hours per week,
she “would still have the ability in terms of time in your schedule and otherwise to work
a second job.”

A 50-year-old debtor with numerous health problems earning $12 per hour who supports a disabled grandchild must work a second job to show good faith before the court could consider issuing a hardship discharge of student loans?  That was the implied argument of the US Department of Education attorneys.
WHY WAS THIS A TOUGH DECISION FOR THE COURT?
I think most observers would agree with the court’s opinion in this case.  It is extremely doubtful that a 50-year-old debtor with health problems will see an increase of income. In fact, the very sad truth is that all workers over the age of 50 have a bullseye affixed to them for “strategic layoffs.”  Older workers impose a burden on corporate health insurance premiums and younger managers typically feel uneasy managing older workers.  When you hit 50 in America’s workforce, they want you gone.
But why did the court have to suffer through a 28-page opinion? Was there any real question of a hardship?  Even if the debtor was not supporting a disabled grandson, wasn’t the fact that she was 50 years old with health problems and no savings, pension, home or prospects of higher wages more than enough to justify a hardship discharge? Why did the court struggle to balance the equities in this case?
The legal standards regarding student loan discharges were created when such loans could be discharged five years after they became due.  And since five years is a very short period of time, the standards to qualify for a special “hardship discharge” prior to the running of 5 years were very high.
But when the 2005 bankruptcy amendments were passed to eliminate student loan discharges entirely except for the hardship cases,  the courts failed to update their standards.  Courts continued to apply the very tough standards applied when discharges could automatically be granted after a student loan was five years old, and this is an error that our appeals courts have lacked the courage to address.
As I write this blog post, protestors have stormed the nation’s capital to block the vote confirming the election of President Biden and in Georgia the US Senate elections may usher in serious bankruptcy reform legislation. We may see bankruptcy reform laws passed to finally deal with crushing student loan debts.  But legislation is tricky and slow, and it is time the courts update the standards applied to define what an undue hardship means for debtors entering into their final working years with no savings or economic stability.
Image courtesy of Flickr and Bradley Weber

“From our initial consultation, we were impressed by Diane’s legal knowledge and compassionate nature,” C.R.
My elderly parents were experiencing financial difficulty due to dealings with an unscrupulous timeshare company. Their only option was to file bankruptcy. While searching for a bankruptcy attorney, we came across the law office of Diane Drain who had excellent reviews.
From our initial consultation, we were impressed by Diane’s legal knowledge and compassionate nature. Although the process was difficult and time-consuming, the communication, help, and support we received from Diane and her legal assistant, Jay, was exceptional. They provided us with clear explanations on what to expect during each step of the bankruptcy process so there weren’t any surprises.
If you’re considering filing bankruptcy and need an experienced, knowledgeable, and compassionate attorney, we highly recommend Diane Drain. She and Jay are wonderful to work with!
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The post From our initial consultation, we were impressed by Diane’s legal knowledge and compassionate nature appeared first on Diane L. Drain - Phoenix Arizona Bankruptcy Attorney.

The FTC alleged that Midwest Recovery, and owners Brandon M. Tumber, Kenny W. Conway and Joseph H. Smith, collected more than $24 million from consumers on such debts, largely by debt parking.
What is “debt parking”, also known as “passive debt collection?”
According to an article by the Federal Trade Commission “FTC” – debt parking can result in a consumer only finding out that a purported debt exists when his or her credit report is accessed in connection with buying a car or home, opening a credit card, or seeking employment. While the debts may not be valid, consumers can feel pressured to pay them off.
“The defendants parked fake or questionable debts on people’s credit reports and then waited for them to notice the damage when they were trying to get a loan or a job,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “The defendants used this illegal ‘debt parking’ to coerce people to pay debts they didn’t owe or didn’t recognize.”
80 and 97 percent of the debts it investigated were inaccurate or not valid
The FTC’s complaint alleges that Midwest Recovery received thousands of complaints each month about the purported debts from consumers, with the company itself finding that between 80 and 97 percent of the debts it investigated were inaccurate or not valid. In addition to payday lending debts, the complaint notes that the company parked significant quantities of medical debt, which is often a source of confusion and uncertainty for consumers because of the complex, opaque system of insurance coverage and cost sharing.
In one example from the complaint, a consumer was told when applying for a mortgage that an outstanding $1,500 medical debt placed on his credit report by Midwest Recovery had lowered his credit score and jeopardized his purchase. The consumer contacted the hospital to whom the debt was owed, who told him that he only owed an $80 co-pay. In spite of that, Midwest refused to remove the $1,500 debt and threatened the consumer with a lawsuit if he didn’t pay.
The FTC’s complaint alleges that the company and its owners, Brandon M. Tumber, Kenny W. Conway, and Joseph H. Smith, violated the FTC Act, the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and the FCRA’s Furnisher Rule.
Under the terms of the settlement, Midwest Recovery and its owners will be prohibited from debt parking and pursuing consumers for alleged debts without a reasonable basis. The settlement also requires Midwest Recovery and Tumber to contact credit reporting agencies and request all debts reported by the company be deleted from consumers’ credit reports.
The settlement includes a monetary judgment of $24.3 million
The settlement includes a monetary judgment of $24.3 million, which is partially suspended based on an inability to pay. Tumber and the company will be required to pay $56,748, and Tumber will also be required to sell his stake in another debt collection company and provide the proceeds from that sale to the FTC. In addition, Midwest Recovery will be required to surrender all of its remaining assets. If the defendants are found to have misrepresented their ability to pay, the full amount of the judgment would become immediately payable.

.fusion-body .fusion-builder-column-1{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-1 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 0px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 0px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-1{width:100% !important;}.fusion-builder-column-1 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:980px) {.fusion-title.fusion-title-1{margin-top:15px!important;margin-bottom:0px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-1{margin-top:10px!important;margin-bottom:10px!important;}}MUSINGS BY DIANE:Has anyone ever contacted you demanding payment for a debt you don’t owe?  My guess is ‘yes’.  Not only does this happen all the time, it is a something some debt collectors set up on purpose.  They report a false claim and then wait for you to check your credit report.  Only then do you take action to remove the fake report – which will take several months, if at all.  Unfortunately, you do not discover that false claim until you need a clean credit report in order to purchase that new home or car.   Which means you need that report to be clean now, not several months from now.  That results in many people paying to remove the false report, which is exactly what the company reporting the fake debt wanted.  This is somewhat like rewarding the thief for robbing your home.
The moral – ALWAYS pull your credit reports at least once a year in order to determine if someone is parking a false or misleading debt.  You can do this for free at AnnualCreditReport.com.  

@media only screen and (max-width:980px) {.fusion-title.fusion-title-2{margin-top:0px!important;margin-bottom:6px!important;}}@media only screen and (max-width:640px) {.fusion-title.fusion-title-2{margin-top:10px!important;margin-bottom:10px!important;}}– Diane L. Drain.fusion-body .fusion-builder-column-2{width:100% !important;margin-top : 0px;margin-bottom : 0px;}.fusion-builder-column-2 > .fusion-column-wrapper {padding-top : 0px !important;padding-right : 30px !important;margin-right : 1.92%;padding-bottom : 0px !important;padding-left : 45px !important;margin-left : 1.92%;}@media only screen and (max-width:980px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}@media only screen and (max-width:640px) {.fusion-body .fusion-builder-column-2{width:100% !important;order : 0;}.fusion-builder-column-2 > .fusion-column-wrapper {margin-right : 1.92%;margin-left : 1.92%;}}.fusion-body .fusion-flex-container.fusion-builder-row-2{ padding-top : 0px;margin-top : 0px;padding-right : 0px;padding-bottom : 0px;margin-bottom : 0px;padding-left : 0px;}.fusion-button.button-1 {border-radius:10px;}.fusion-button.button-1.button-3d{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}.button-1.button-3d:active{-webkit-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);-moz-box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);box-shadow: inset 0px 1px 0px #fff,0px 5px 0px #003d00,1px 7px 7px 3px rgba(0,0,0,0.3);}Click here for steps to your free bankruptcy consultation
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