Archive for the ‘Bankruptcy Means Test’ Category
Misconceptions About Bankruptcy Could Be Keeping Away Those Who Need Help
Historically, bankruptcy has been stigmatized. Narrow-minded people saw those filing for bankruptcy as failures, as deadbeats or as being guilty of living far beyond their means. Nowadays, though, we know that the great majority of people filing for bankruptcy protection are victims of circumstance: their debt could easily have been caused by a job loss, divorce or serious illness that racked up a mountain of medical bills.
The bankruptcy laws have undergone significant changes in recent years, and some people think it is now all but impossible to file. If anything, however, the new laws make it easier to use this legal tool for a financial fresh start. Unfortunately, there is a great deal of misinformation — both good and bad — floating around about the purpose of bankruptcy and about the process of seeking bankruptcy protection to deal with personal or business debt. This article will help dispel some of the myths and make it more approachable as a debt management option.
No More Stigma
Most people considering a bankruptcy filing fear that they will be stigmatized by family, friends and coworkers. Luckily, this is not true; unless the filer is a public figure or involved with a large company, 99 percent of the time the public will never know about a bankruptcy filing. Likewise, they may fear that lenders will forever view them as a bad risk and that they will never qualify for financing on auto or home purposes in the future. This, too, is a myth. While a bankruptcy filing does show up on the filer’s credit report, most filers can start building their credit again just a few years afterwards. For some filers, the wait is even less.
Do I Have to Sell Everything?
Some people have this abstract view of bankruptcy as being a court-ordered “rummage sale” of sorts where they will have to liquidate everything from their household furniture to their great-grandmother’s china. Yes, the court may order a filer to sell superfluous and extravagant assets (like a vacation home in Aspen that is used one week a year or an original Shelby mustang that has been under a tarp in the garage for a decade), but the majority of filers get to keep their home, clothing, household belongings, work-related items like tools, furniture and the family vehicle.
You CAN File Again
For some people, a second — or even third — bankruptcy filing is a necessity. While common knowledge may say that bankruptcy is a one-shot deal; you get a single chance to get a financial new beginning through the bankruptcy code. This simply isn’t the case. While there are waiting periods put in place to prevent so-called “serial filers” who might have a pattern of irresponsibly running up massive amounts of debt and then filing for bankruptcy again and again, the law doesn’t bar a subsequent filing if legitimate financial circumstances dictate.
Even though bankruptcy is more accessible than it has been in the past, the process can still seem overwhelming and even scary. With the help of an experienced bankruptcy attorney, though, bankruptcy can be a great way to get out from under a mountain of debt and get a fresh financial start.
At Miller & Miller we are here to help you file in Milwaukee, Kenosha, Racine, West Bend or wherever you may live. We have convenient offices in Kenosha and Germantown if getting to our downtown office is a problem.
Thousands of Milwaukee residents file for bankruptcy each year. A good number believe they can’t afford a lawyer but are intimidated by the idea of trying find their way through a legal system they don’t understand.
These citizens have critical questions about the bankruptcy process:
“Can I keep my car?”
“Do my husband and I both need to file?”
“Will my child support arrearage be discharged?”
Many turn to bankruptcy petition preparers for those answers and pay $100 to $250 to get them. But most do not realize that petition preparers are simply typists. They are not trained in the law and do not know the answers to the questions that debtors need to ask.
Some preparers answer the questions anyway, often giving the wrong information.
Some take the debtors’ money but do not complete the papers or do not file the papers or do not file the correct papers.
Milwaukee’s bankruptcy judges have grown weary of being forced to dismiss cases because the debtor paid money he or she did not have to a petition preparer who gave the debtor the wrong information, did not file all of the required documents or filled out the documents incorrectly.
People who consider filing for bankruptcy already are hurting, without losing precious dollars to someone who cannot give them the advice they need.
To make it clear that the law does not allow petition preparers to give legal advice, and that they are not qualified to do so, the Milwaukee judges have established a new policy: Beginning Jan. 1, a petition preparer may charge only $75 for completing bankruptcy papers.
If the preparer is following the law, simply filling out the papers without giving legal advice, $75 is a reasonable price for that service. If a debtor needs more than typing services – and most debtors do – the bankruptcy court has a Help Desk, where from 9 a.m. to 10:30 a.m. every Thursday morning, bankruptcy lawyers will answer questions and help debtors with their paperwork.
And it’s free of charge.
Pamela Pepper is chief judge of the U.S. Bankruptcy Court for the Eastern District of Wisconsin, sitting in Milwaukee.
The Milwaukee Journal/Sentinel reported today that
Judges cracking down on paid preparers who pocket fees, overcharge clients, wreck paperwork and have botched bankruptcies! To read the remainder of the article please click here http://www.jsonline.com/watchdog/watchdogreports/bankruptcy-filings-botched-oe333mt-134731393.html
Can same-sex couples filing a
joint bankruptcy? The U.S. Department of Justice announced on
July 6, 2011 that it will no longer oppose joint bankruptcies filed by same-sex
couples legally married in their state. This news comes close on the tails of
the recent court decision in Los Angeles where 20
of 24 judges signed an opinion allowing a same-sex couple to file a joint
petition for bankruptcy. That opinion declared that the federal Defense of Marriage Act (DOMA) was
unconstitutional. The U.S. Trustee in Bankruptcy has agrees that DOMA will not be
raised to protest joint filings by married same-sex couples. One would assume that this rule would only be
applied in states where the marriages are recognized. However, it has been noted that joint filings
are the rule in North Carolina so long as the couple is actually married.
When it comes to creditworthiness, it’s hard to top the consumers of Wisconsin.
Four Wisconsin cities – including Wausau at No. 1 – are among the 10 communities in the nation with the highest average credit scores, a new survey shows.
Wausau residents posted an average credit score of 789 in the survey conducted by the credit-rating agency Experian. Madison was third, at 785; Green Bay sixth, at 780; and La Crosse 10th, at 777.
Milwaukee, with a score of 765, was 33rd of 143 cities included in the survey.
“Wisconsin residents remain among the nation’s most fiscally responsible,” Experian stated Tuesday in announcing the survey results.
Higher credit scores generally give consumers the ability to borrow money at lower interest rates.
Credit scores are based on a consumer’s payment history, debt balances and several other factors. Among those factors are how much of a person’s available credit is used, how long a person has had credit and whether late payments have occurred recently.
Wausau unseated Minneapolis, with the Minnesota city slipping to second in the annual survey with a 787 average credit score.
Rose Oswald Poels, chief executive of the Wisconsin Bankers Association, wasn’t surprised by the survey’s findings.
“The consumers in this state are generally very conservative with their money and smart about credit decisions, and that’s true of the financial institutions that serve those citizens,” Oswald Poels said. “I think it’s just the combination of the types of values and people we have in this state, coupled with the type of financial institutions that we have. We both share similar values in being fiscally conservative, hardworking and smart about credit.”
An executive with Wausau-based Peoples State Bank said he’s noticed before that many of the bank’s customers bring credit scores higher than 700.
“I think people here were raised in a conservative fashion, and they live the way their parents do,” said John Proulx, senior vice president for Peoples State Bank. “I think that probably is a big reason as to why we have the good scores.”
Overall, the survey found that Midwesterners have the highest credit scores while Southerners have more financial struggles.
Experian said that while no one factor determines a consumer’s credit score, the weak economy continues to cause major setbacks, such as foreclosures and unemployment. Those troubles were drivers in the rankings and trends for different regions of the country, the firm said.
Of the cities with top 10 credit scores, only San Francisco had a jobless rate higher than the national rate. Texas had four cities in the bottom 10.
The credit scores in the report were based on the VantageScore scoring system, which has a range from 501 to 990, in designated market areas from January through June of 2011, Experian said. The analysis was based on a statistically relevant sampling of Experian’s consumer credit database, the firm said.
“We have our issues just like any other city does. We have some foreclosures and things like that, but probably not as much as some of the other areas do,” Proulx said. “So some of that doom and gloom has hit Wausau, but it’s maybe not as prevalent in this area.”
Wausau Mayor James Tipple was proud of the ranking for his city, which has a population of 41,800.
“I think the quality of life and the people we attract to the region, and not only the region but the city of Wausau, speaks volumes for the score,” Tipple said.