Stop Debt Collectors in Virginia

Bankruptcy Myths– BUSTED

admin — Sun, 29 Jan 2012 03:21:10 +0000

There is a lot of false information regarding bankruptcy. Here is a list of the most common myths we’ve encountered.

1. My employer will find out and fire me, or my potential future employer will not hire me because I filed for bankruptcy.
Usually FALSE. Discrimination solely because you filed for bankruptcy is prohibited under the U.S. Bankruptcy Code. Certain persons with security clearance and sensitive financial positions can have issues with bankruptcy, though even then, a Bankruptcy can show that you are dealing with the problem, and enable you to have the security clearance or sensitive financial position. The exceptions to this are positions that tend to handle money, like bank tellers.

2. I have to be broke or behind on my bills to file bankruptcy.
FALSE. Do not wait until you’ve drained out your savings, or 401(K), or borrowed more money from relatives and friends. There are no rules that say you have to be behind or broke to file for bankruptcy. In fact, draining your retirement account may be a serious problem if done immediately before the filing of the Bankruptcy. Consult with a bankruptcy attorney right away if you do not see a way out of your current financial situation, BEFORE you do something.

3. Bankruptcy is not affordable.
FALSE. We do our best to provide reasonable time to pay attorneys’ fees and costs. In fact, many clients find that stopping payments to credit cards for a couple of months cover attorneys’ fees. In Chapter 13, usually part of the fees are paid up front and some through the plan payments. Additionally, because many of our clients have violations of the law, they end of getting their money back from the debt collectors who come after them.

4. I will lose my home.
Usually FALSE. In Chapter 7, as long as you are current on your payments and meet the equity limits, you can keep your home. In Virginia, there is an exemption up to the following amounts:
(1) $5,000 for each debtor.
(2) an additional $500 per child under age 18.
Refer to Virginia Exemption Chart.
You are given the same equity limits in Chapter 13 as Chapter 7. But you do not have to be current on your mortgage. In Chapter 13, you are given up to 5 years to repay the missed mortgage payments.

5. My credit is destroyed forever.
FALSE. Bankruptcy is reported on your credit report for up to10 years (see 15 US Code section 1681c). Most people mistakenly believe that they get a Scarlett Letter stamped on their forehead and won’t be able to get credit for 10 years (or some even believe for life). In fact, most of our clients get credit offers within a few months after filing. Bankruptcy stops the bleeding and places you in a position to rebuild your credit worthiness. Clients usually start with credit cards with smaller limits. They use these wisely (never carrying a balance), and get higher limits. The credit score increases and permits more extensive credit such as car loans. It’s similar to building credit for the first time like a high school or college student graduate. Additionally, Krumbein Consumer Legal Services is one of the few law firms with the experience and skills to help make sure that your credit is accurate. With Bankruptcy, your debts should stay in the past, not follow you along forever.

6. I will never get a home, an apartment or car.
FALSE. People do rebuild their credit after bankruptcy and go on to buy homes and/or cars. Your credit score may actually increase after bankruptcy, especially since bankruptcy will have a positive effect on your debt-to-income ratio. Additionally, some clients have purchased a home because of the efforts of Krumbein Consumer Legal Services to correct the errors on their credit report.

7. You can’t go bankrupt anymore since the new law.
FALSE. As the business and consumer bankruptcy filings that have exceeded well over 1 million people per year show, this is not the case. The 2005 changes to the bankruptcy laws made it more difficult to file for bankruptcy, but we have spent a significant amount of time using the amendments to our clients’ benefit. Consult with a Richmond bankruptcy attorney from Krumbein Consumer Legal Services to determine how you qualify.

8. The new law says you have to pay everything back.
FALSE. In Chapter 7 bankruptcy, debts are wiped out completely with the exception of certain taxes, child support/alimony, student loans and specially designated debts. In Chapter 13, the amount you repay is based on your disposable income (money left after your expenses are subtracted from your income) or liquidation analysis (property that we cannot exempt). In most situations, 100% repayment is not required.

9. It will be in the newspaper.
Usually FALSE. We suppose this could change, but this does not occur in the Richmond Area unless you are generally a news maker. As it stands, your bankruptcy filing will not be announced in a publication. However, it is public information, and anyone that wants to can go to the Bankruptcy Court and request your file. Additionally, the information is available on a Federal Bankruptcy database. To access it, you must have an account and pay to view it per page. Hearings related to your case are also posted on the court’s website for a brief time, however a person would have to know that they should look.

10. I hear “you can’t go bankruptcy on credit cards any more”.
FALSE. Credit cards are unsecured debts and will generally be discharged by bankruptcy. Credit cards and medical debts are the debt we discharge the most often.

11. After you take a credit counseling course you must wait 6 months before you can file a bankruptcy.
No, in fact it’s the opposite. One you take the credit counseling course and receive the certificate, the certificate is valid for 180 days. You must file bankruptcy within that 180 day period to use the credit counseling certificate. If you wait too long and the credit counseling certificate expires, you will have to take another credit counseling course and get a new certificate. Check with the US Trustee’s Website for authorized Credit Counseling courses. We provide clients with information about credit counseling providers that we find are cost-effective and consumer friendly. Under most circumstances, the credit counseling course is included in the cost of the Bankruptcy through us.
In short, there is no waiting requirement after completing credit counseling to file for bankruptcy.

12. If I file for bankruptcy I’m a failure.
Well then so are your family, friends, co-workers and the businesses you visit. Our clients are doctors, teachers, constructions workers, retail workers, hair stylists, police officers, bankers, rich, poor, blue collar, white collar…you get the idea. Plenty of famous and successful people filed for bankruptcy. For those struggling with the idea of filing, ask yourself whether you want a society of people in indentured servitude that die poor paying their debts, or people free from debt that can be productive and active members of society? Certainly we all want to pay our debts if we can. But sometimes it’s just too overwhelming.

13. There’s a secret way to make your creditors accept a fraction of the debt.
ABSOLUTELY FALSE, and don’t let wishful thinking make you believe promises made by debt settlement companies and others feeding off your sense of fear or guilt. It is true that oftentimes credit card companies will settle on stale debts. Sometimes they don’t. The settlement amounts vary from 5% of the debt to 99% of the debt. Moreover, creditors may (and often do) sue you. Unless you have a valid defense for the lawsuit, you may lose the case (see our information about defending collection lawsuits). They can get a judgment against you and garnish your wages, take your money in your bank account or put a lien on your property.
Assuming they do settle, what the creditors and debt settlement companies don’t tell you is this: the amount forgiven will be considered income to you and you may be taxed on the amount forgiven. It’s better to owe your credit card money than the IRS because you can discharge the credit card debt in bankruptcy much more easily, and debts discharged in Bankruptcy are deemed not income for purposes of your tax return. (see 26 US Code 108(a)(1))

14. I’ve hired a debt settlement firm to help me pay off all of my debts at a deep discount in 3 years or less and now I won’t have to file for bankruptcy.
See #13. It is common for our clients to be scammed by these companies. There is some promise to settle debts for pennies on the dollar. Creditors, however, do not have to settle with you at all; there is nothing special about the relationships between debt settlement companies and credit cards/debt collectors that guarantee settlements. Most of the time, the debt settlement companies will keep most of the money for themselves, leaving little for the actual settlement. They can’t do anything for you that you can’t already do for yourself – not pay your creditors then work out a settlement.
If you do decide to hire a debt settlement company, please be sure to check with the FTC and Attorney General office of the state the company is located. There are lots of warnings issued by governmental agencies regarding the dangers of hiring a debt settlement companies. We also see the United States Trustee that oversees bankruptcy sometimes go after debt settlement companies for scamming consumers. Also, many of the debt settlement companies are scams. They take your money and give you nothing in return.

15. My friend told me as long as I am going bankrupt I might as well max out my credit cards and use up what is left.
Accumulating debt with an anticipation of filing for bankruptcy may be considered fraud. Bankruptcy is for the unfortunate but honest debtor.

16. I should “leave one card out” of the bankruptcy.
ALL debts must be listed on the bankruptcy petition. Everyone you owe money to must be listed. This includes friends and families. Intentionally leaving a creditor out is grounds to deny you a Discharge, and may be an act of Bankruptcy fraud. Please note that Bankruptcy fraud is investigated by the FBI, and carries penalties up to and including jail and big fines.

17. “But my credit score will go down!”
See #5. If you are at serious risk of needing Bankruptcy, your credit score is already depressed. If you have defaulted on credit cards, home loans, car loans or student loans, they will already be reporting negatively on your credit report. Bankruptcy draws a line in the sand, and tells everyone that those debts are in the past. The credit reporting guidelines say that accounts that are included in a Bankruptcy are not scored, but all those charge-offs and delinquencies lower your score. A single missed payment can lower your score by as much as 150 points. But a Bankruptcy draws that line in the sand, and makes it go away.

18. I’ll never get credit again, or another, I won’t be able to get credit for 7 years.
After filing for bankruptcy, your debt-to-income ratio improves. This will help your credit score. Additionally, you cannot file again for 8 years (in case of Chapter 7) so you’re actually a “safe bet” for the creditors. Most of our clients report being able to get a secured credit card immediately after bankruptcy and an unsecured credit card with a modest credit limit within several months. This fluctuates with how banks extend credit. How long you have to wait to get a credit card will depend on your individual circumstances such as your income, work history and the banks’ lending practices at the time you apply.

19. Bankruptcy does not apply to certain creditors like Bank of America.
Bankruptcy applies to Bank of America as well as all other banks. Individual banks and persons do not get special passes. Read more about Chapter 7 and Chapter 13 to learn about which debts are discharged.

20. I will be making a better financial plan to suffer through and pay it back than to file for Bankruptcy.
Ask yourself, what will it take for me to get out of debt? Use this calculator to figure it out. Most people continue to make the minimum payments not realizing the amount of money it will actually take to get out of debt. Do not make the mistake of getting trapped in the cycle of making minimum payments – never being able to live debt free.
We suggest that you do a simple bit of math. Figure out your monthly living expense without paying on your debts. Figure out how much you have in income each month. Subtract the amount you have to spend from the amount you have for income (income-expenses). Take the total amount of your debt, and divide by 24. If the income-expenses number is not higher than your debt divided by 24, then when you try to pay it off, you will be forever paying mostly interest, and you will never get out.

If you will never be debt free, how can you ever get ahead?

Special thanks to Jeena Cho, of the JC Law Group, in San Francisco.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

Buying a replacement car while in Bankruptcy

JKrumbein — Mon, 02 Jan 2012 08:00:51 +0000

Many of my Bankruptcy clients come to me and say “Ack. My car died. I need to buy a new one. What do I do?”

The first question is are you going to buy with cash or are you going to be financing this purchase.

Anything you can pay cash for, there is no paperwork. Go, walk up and pay for it. But most people don’t have that kind of cash. They need to finance the purchase, or at least a portion of it.

In general, while a person is in Bankruptcy, getting financing for your purchase (car, house, boat, etc) is very difficult to come by. You will get worse deals, and pay higher interest rates. While you are in Bankruptcy, you will have the worst credit possible, so if at all possible, wait until your Bankruptcy is over.

But it is even harder than that. You should be seeking permission to finance this debt from the Bankruptcy court. This request is called a “motion to incur debt”. It asks the Bankruptcy judge for permission to borrow money. Let’s be honest here, you have trouble paying debts, you should be having a review of your plan by someone else.

But what do you need if you want to do this?

There are 3 main documents you must show.

First and foremost, is a letter, explaining why you can afford the payments. Your Bankruptcy schedules include a budget. They describe how your income comes in, your paycheck, or wages, and what you do with your money each month, where the money goes.

So how are you going to pay for this new expense? Have you accounted for it already in your budget? For example, will you be replacing rent with mortgage payment. Will you be adding on to your expenses, by buying a car to replace the one that is already paid for? If you are adding to your expenses, how will you come up with that money? Will you shave your expenses even more, or will you get a part time job to help pay for it?

Second, is the “deal” papers from the seller. From a car dealer, this will be the “Buyers order”. The judge wants to know what you are buying, to ensure that you will not be running into excessive expenses in the future. For example, buying a 1974 Gremlin with 300,000 miles on the original motor and transmission is not a very good choice. But a late model, low mileage small car is a good choice. (Personally, I am a fan of the Honda Civic 4 cylinder). For a home, it will be the purchase contract. Either way, it will describe what you are buying, and how much it will cost.

Third will be the “financing papers”. The key document here is the “Truth in Lending Disclosure”. This document is a statement of the cost of financing. It will detail the payments and the interest that you will have to pay.

With these you can go to the judge, and get the permission.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation. Pursuant to Federal law, we are a “debt relief agency” which means that we help people file for Bankruptcy, if that is the best choice for them.

If you are not a Virginia Resident, click here to find a lawyer near you.

You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

What is the difference between being sued by an original creditor and being sued by a debt buyer?

JKrumbein — Mon, 02 Jan 2012 08:00:44 +0000

What is the difference between being sued by an original creditor and being sued by a debt buyer?

First, lets discuss the difference between a creditor and a debt buyer.

A creditor is the original party to whom the money is owed. Examples include Capital One, CitiBank and Discover Card. When you open a credit card with Capitol One, Capitol One is the original creditor. They often will hire a lawyer to represent their interests in court. This does NOT mean that it has been sold, but that they decided not to represent themselves in court.

A debt buyer is where a creditor has sold the account to another agency, who them collects or sues. Examples here would be a debt originally owed to Wells Fargo, in which Midland Funding now owns the debt. Midland is a debt buyer. Wells Fargo is an original creditor.

Now we shall discuss what happens with a lawsuit filed by each. Note that this applies ONLY to cases that get to trial. If you default, the judge will rule against you in most cases. The exceptions are few.

A lawsuit filed by an original creditor requires that there is some showing of relationship between you and the creditor, and that you owe them money. An example is that you opened a credit card, and used the credit card, and there is still a balance due. Another example is buying on a store card. You go in to the store, buy products, and they sell them to you on credit. These might be called contracts or open accounts, depending on your jurisdiction.

A lawsuit filed by a debt buyer requires a higher level of proof. It requires everything that a creditor lawsuit requires, and proof that the debt buyer now owns the account. But the debt buyer cannot testify that you opened the account, and they cannot testify that there is a balance still owing. That would be hearsay, which is a statement (other than one made by the person while testifying at the trial or hearing) offered in evidence to prove the truth of the matter asserted. (in this case, this definition comes from Federal Rule of Evidence 801, but similar definitions can be found in most states rules of evidence or case law.)

So somehow, the plaintiff must prove that you opened the account, and left a balance. And then they must prove that they bought that account. All without using hearsay.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd. Suite 102
Richmond, VA 23230

Anti-Cramdown of Houses

JKrumbein — Wed, 28 Dec 2011 08:30:23 +0000

The Bankruptcy code has another its own little “Hanging Chad” issue. This is the “anti-cram down” provision in Chapter 13 Bankruptcy.

We discussed what a “cram down” is in a prior blog entry. There is another piece to know. Houses generally cannot be crammed down. There are exceptions. Lets talk about the rules of cramming down a house.

In order to cram down a house, it must NOT be your primary residence, and you must be able to pay the value or balance (which ever is lower) over a period not to exceed 5 years.

First- the house cannot be your primary residence. A primary residence is where you live the majority of the time.

Second, you must be able to pay the balance or value over 5 years (60 months). Lets talk about “lower.” This means that the first thing to determine is which is lower, the balance or the value. Most people these days (since the real estate crash) have negative equity in their home. They owe more than the house is worth. In this case, the person would pay the value of the house. In some cases, the house has been owned for a long time. In those cases, the balance may be very low. In this case, the person would pay the balance.

The next concern is that the money must be paid over 60 months, 5 years. This means that you have to be able to afford the amount, including interest.

Lets talk about an example. My client owns a house in Southern Florida. The market in Florida crashed worse than most places in the US. The house was appraised at $35,000. The problem, of course, is that the balance was around $130,000. BUT, the client lives in Virginia. The client was able to re-value the loan and balance to about $35,000, and pay $35,000 over the life of the Bankruptcy, keeping the house, and reducing the amount to be paid. When the Bankruptcy ends, the house will belong to the client, having paid about a quarter of the loan balance.

Please remember that this is an exceptional circumstance, and that not all cases turn out this well.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

KCLS is a debt relief agency. We help people file for Bankruptcy protection.

If you are not a Virginia Resident, click here to find a lawyer near you.

Wrong Party Collections

JKrumbein — Mon, 21 Nov 2011 04:17:25 +0000

Debt collectors sometimes make mistakes. They contact people who don’t owe the money. Not that no one owes the money, but the person they are contacting does not owe the money. They are just simply calling the wrong person.

The Fair Debt Collection Practices Act has some things to say about this. First- tell the collector that you are not the person they are looking for. Give them the information so they can see it is true. Make them give you the last 4 digits of the person’s social security number, then give them the last 4 of yours. Why do you wait for them to give you the last 4? That ensures that they do not go about changing the system first. The last thing you need is them to make it look like you, as an “update”. You should be tracking the calls on your call log.

Once they know it is not yours, they should not be calling back. You can double check this, by sending the collector a letter, by certified mail, return receipt requested, in which they are instructed to cease communications with you. This letter is commonly called (incorrectly) a “cease and desist letter.” Right thought, wrong words. A sample letter can be found here. Make sure you track all the calls on your call log.

Once they are notified not to call you again, they are permitted no further contact. If they do contact you, you should immediately contact a lawyer to assist you.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

How Long Does the Automatic Stay Last?

admin — Mon, 26 Sep 2011 03:38:58 +0000

The automatic stay is a powerful remedy that comes into effect as soon as your bankruptcy case is filed, but the stay doesn’t last forever. You need to realize that this shield against creditor action is not perfect, and will not work in your favor until the end of the world.

The automatic stay remains in effect until a creditor gets an order from the judge in your bankruptcy case to lift the stay. In addition, remember that there are limitations to when the automatic stay may come into effect for only a limited amount of time – or sometimes, not at all. If you had a prior bankruptcy case in the past year and that case was dismissed, then the automatic stay exists for only 30 days (unless you or your lawyer gets a court order extending the automatic stay). And if you had two or more prior bankruptcy cases in the last year that were dismissed then the automatic stay does not take effect at all.

The automatic stay does not protect you from all collections efforts, only the most common ones, like lawsuits, letters and phone calls. It does not stop a criminal proceeding, child support from being determined, or from taxes being assessed or offset.

Finally, the automatic stay ends the minute your bankruptcy case ends- either in a Discharge or in a Dismissal.

As always, rules have exceptions and limitations. Tread carefully when relying on the automatic stay; if you don’t then you may think you’re protected when you are not.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

If you are not a Virginia Resident, click here to find a lawyer near you.

Joint Accounts and Garnishment

JKrumbein — Sun, 11 Sep 2011 01:56:04 +0000

What happens when a creditor has a judgment and you have a joint bank account?

The creditor can issue a garnishment (seizure order) to the bank, and freeze all of the money. A separate notice is then sent to the other account holder. They then have the opportunity to come to court and claim that some or all of the money in the account is theirs.

In order to do so, they must come with 2 or 3 months of statements, and proof of the source of the deposits. For example, they need to bring pay advices showing that they are the one who deposited amount X on date Y.

If the joint account holder does not show up in court, the judgment creditor gets the benefit of the doubt, and gets all of the money.

One of the first things we always ask is how did the case get this far. Sometimes there are things we can do to alleviate the problem. Sometimes we will recommend Bankruptcy.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

DISCLOSURE: Pursuant to Federal law, KCLS is a debt relief agency. We help people, who need those services, to file for Bankruptcy, if there is no other option.

If you are not a Virginia Resident, click here to find a lawyer near you.

What is a “cram down”?

JKrumbein — Fri, 09 Sep 2011 02:08:19 +0000

Many Bankruptcy lawyers talk about “cramming down a debt”. But what is a “cram down”?

The Bankruptcy code allows for the modification of many debts, including some secured debts. This is called “Cram down”. But what is a “cram down”?

A cram-down is when you pay a creditor who is secured (has a right to repossess something) less than the full balance over time, through your Bankruptcy. Examples are car loans, and debts for stuff you bought- computers, TVs, couches, refrigerators, etc.

For example, lets say you bought a nice TV (big screen projection) a year before the Bankruptcy, and when you file, the balance is $2,000 (projection TVs were all the rage about 10 years ago, and they were very expensive), but the value, if you bought a similar one today, in similar condition, is $300. It’s a used TV that occupies a lot of space, and you can’t even hang it on the wall. In that case, you can cram down the value of the TV, pay the lender $300, and the balance becomes unsecured. If you get a Discharge, you will have paid about 15% of what you owe.

Another example is a car (there are limits on cars, which we will discuss another time.) You owe $15,000. The car is worth $7,000. You can cram the car down, pay the lender $7,000, and treat the rest as unsecured, and pay about 50% of what you owe.

Note that in all cases, there are rules that you must follow, and details that are important to note with each situation. To know what you can do, you should consult a lawyer.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

KCLS is a debt relief agency. We help people file for Bankruptcy protection.

If you are not a Virginia Resident, click here to find a lawyer near you.

Contact us by e-mail or by telephone or fax or US Mail.
You can call us: 804.303.0204
You can fax us: 804.303.0206
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd. Suite 102
Richmond, VA 23230

Order of bill payment

admin — Mon, 15 Aug 2011 09:13:35 +0000

Last time I talked about how to deal with collectors, and I mentioned an order of payment. Here is why the order is important. The order, from last time, is: 1- Food, 2- car and house payment, 3- Utilities, 4- Current bills, and 5- Luxury expenses.

The food always comes first in the order of payment. If there is no food, the reason for a house, a car, utilities, credit card payment, etc is pointless.

The house and car payments come next. It is much easier for a lawyer to fix the problem of unsecured debt (debt where there is no right to repossess a thing), than a secured debt. Your secured creditors are hard to solve, often requiring that you make deals to pay them much more than you ordinarily would. Unsecured creditors will often settle for pennies on the dollar, over long periods of time, because payments to them are so much more tenuous. You can have defenses, or file Bankruptcy, or just not pay, and there is often very little they can do.

The utilities and taxes come next. The utilities will cut you off, and the tax man will come get things, but neither of those things happens quickly.

Then comes the unsecured bills- the medical bills, the credit cards, etc. When they get paid it will be good enough.

Lastly comes the luxury expenses- vacation, jewelry, etc. If you are able to pay all of your other bills, then there may be money left in your budget for luxury goods and services. They are not things that you need, but might want. Instead of a vacation, try a stay-cation. You get the time off, but not the expense of travel. Instead of expensive jewelry, try costume jewelry. You get some of the look, but not the expense.

Consult a lawyer and maybe a financial planner. You need to know your rights, and how to get out of this mess. Above all, don’t play ostrich. Sticking your head in the sand and saying “I can’t see you” will not make the problem go away.

If you have been impacted by anything we mentioned here, please make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR LEGAL FEES:

Bankrupting Court Fines And Restitution

admin — Mon, 15 Aug 2011 08:56:39 +0000

What happens to my court fines or orders of restitution when I file for Bankruptcy?

A fine is a criminal penalty payable to a municipality, like a county or city, or the court system. It happens when you are punished. Examples here are speeding, reckless driving, assault and battery.

Restitution is part of a criminal case, in which you have to pay someone back. Examples of cases where you would have restitution would be stealing or embezzlement. In those cases, the judge may sentence you to jail and tell you that you have to pay someone back for the money you took. You may also have to pay a fine to the court.

If you owe money to a person or company, because you did something wrong, or because you broke a promise, that is a debt, not a fine. Examples here are car wrecks, credit cards, even after you go to court, and deficiencies for car loans.

What happens to them? Well, that depends on what kind of Bankruptcy you filed.

If you filed a Chapter 7 or Liquidation Bankruptcy, then the court fines and orders of restitution are unaffected by your Bankruptcy. They continue on along just the same as if you had never filed for Bankruptcy. If you do not pay, they can suspend your license, or put you in jail for contempt.

If you filed a Chapter 13, the effect on your fines and restitution is interesting. Because fines and restitution are not dischargeable in bankruptcy, they can be paid over time in your Chapter 13 Bankruptcy. It is important to know that any amount that is not paid will not be discharged, even if they do not file any request to determine that it is so.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.
YOU MUST BE A VIRGINIA RESIDENT.

OUR FEES: Our fees are controlled by the local rules and your situation. They may vary from “free” or probono representation to a flat fee to an hourly fee, depending on your situation.

KCLS is a debt relief agency. We help people file for Bankruptcy.

If you are not a Virginia Resident, click here to find a lawyer near you.