Milwaukee Bankruptcy Attorney Blog by Miller & Miller Law, LLC » Discharge of Debts

1099-C in the mail? Read the following article:

Jason S. Crye — Wed, 29 Feb 2012 18:17:58 +0000

1099-C In the Mail? How to Avoid Taxes on Cancelled Debt (via Credit.com)

If it’s been a rough couple of years for you, you’re not alone. Maybe your income was cut, you lost your job, or you had large expenses like medical bills. You may have fallen behind on bills, fielded collection calls and managed to settle some of your debts for less than the full balance you owed…

The Lengths to Which Debt Collectors Will Go

Jason S. Crye — Mon, 13 Feb 2012 20:42:53 +0000

The Huffington Post chronicles this incredible story in which a debt collector allegedly called 911 on an 85 year old woman:

Read it here.

If you live in Southeastern Wisconsin and are being badgered by debt collectors call Miller and Miller today at 414-277-7742.

With offices in Milwaukee, Kenosha, and Germantown, we’re sure to be located close to you whether you live in Waukesha, Racine or somewhere in between.

I’ve had to use my credit cards recently, can I still file a bankruptcy?

Jason S. Crye — Sat, 04 Feb 2012 22:36:02 +0000

There is no perfect time to file for bankruptcy. Ideally, you should wait to file at a point when you have not touched your credit cards for several months and your credit card charges over the past year have not taken a big jump. Further there is less chance that you will face any objection if you have made at least the minimum payment over the past 6 months or longer.

Section 523 of the Bankruptcy Code sets out a number of situations in which credit card debt will not be discharged. Section 523(a)(2)( c) makes non-dischargeable consumer debt totaling more than $500 for luxury goods and services owed to any one creditor that are incurred within 90 days of filing, or cash advances totaling $750 or more owed to any one creditor made within 70 days of filing.

Section 523(a)(2) makes non-dischargeable debt owed to a creditor that was incurred by false pretenses or by fraud.

So to sum it up, Section 523 gives credit cards at least two arguments to challenge a Debtor:
1. Recent credit card use (within 3 months) for anything but necessities like food, clothing and shelter
2. Any credit card use in the recent past (up to a year prior to filing) if a Debtor makes charges where there is no reasonable expectation of repayment.

Here’s another way to think about it: If you have lost your job, and for the last year your only source of support are credit cards and cash advances, you should not expect to avoid a challenge by the credit card issuer just because you wait 91 days after your last use of your cards.

What, then, should you do if you need to buy food or gasoline in the weeks before you actually file?

You should recognize that shortly after you file, there is a very good chance that your credit cards will all be canceled and you are going to have to find another way to pay for your food and gasoline. A bankruptcy may eliminate old debt but it will not help you pay your current or on-going bills.

As a practical matter you are not going to want to spend the money litigating Section 523 dischargeability actions. Bankruptcy litigation is expensive and if you are scraping to buy food and gasoline, you will not be able to afford litigation. The fee you pay your bankruptcy lawyer will almost never include litigation.

If you are in Southeastern Wisconsin and are having trouble with your credit card debt, contact Miller and Miller today. We have offices in Milwaukee, Germantown, and Kenosha, making sure that whether you live in Racine or Waukesha, you have a office close to home.

Saving on Your Childrens’ Needs

Jason S. Crye — Mon, 30 Jan 2012 15:59:13 +0000

Over at the MintLife Blog they recently had a great article on overpriced children’s items. After getting a fresh start through bankruptcy it is important to look for ways to keep costs down so that you are able to build a strong financial future. We all want to give the world to our children, but if you can do that while saving a buck it’s even better.

Read that article here.

Everyday people in the Milwaukee area are learning how to get out of financial trouble by meeting with one of our attorneys. Miller and Miller has offices in Milwaukee, Kenosha, and Germantown to ensure that wherever you are in Southeastern Wisconsin, we’re close.

Call us today at 414-277-7742 and schedule your free consultation!

Budgeting: Your New Year’s Resolution?

Jason S. Crye — Mon, 09 Jan 2012 19:54:30 +0000

C. Lazarus from the Savings Experiment has a great article here on one way to manage your finances called the 50/20/30 budget. It’s a great read and a great idea. After getting a fresh start through bankruptcy, many of our Wisconsin clients are able to build on that clean slate by saavy budgeting.

If you are in the Milwaukee-Waukesha-Germantown-Kenosha area and would like to learn how to get a fresh start, call Miller and Miller today!

Student Loans Now a Bigger Problem Than Credit Card Debt

Jason S. Crye — Tue, 01 Nov 2011 21:24:40 +0000

USA Today recently published an article explaining that Americans’ student loan debt, which totals approximately $850 billion, now exceeds outstanding credit card debt in the U.S., which totals approximately $828 billion.

Perhaps a more interesting element of this story has to do with the monthly repayment numbers borrowers are expected to pay. The USA Today article suggests that $30,000 of student loans, payable at 6.8% interest over ten years would amount to $350 per month. At this level of debt, the average person would need to earn at least $42,000 per year. Unfortunately, as bankruptcy attorneys we commonly see student loan debt in excess of $100,000, with monthly payments over $1,000.

From a bankruptcy perspective, student loan debt is not dischargeable except in cases of “undue hardship.” In the Eastern District of Wisconsin, the court uses a very strict three part test to determine whether student loans may be discharged. As the law stands today, debtors in the Eastern District of Wisconsin have not been successful in arguing for hardship discharge on the grounds that they cannot find a job that pays enough to support their student loan obligations.

State residents rank among most fiscally responsible

Jamie Miller — Wed, 12 Oct 2011 15:15:33 +0000

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.

Attorney Miller quoted in Journal Sentinel regarding decline in Bankruptcy Filings

Jamie Miller — Tue, 26 Jul 2011 15:31:13 +0000

Bankruptcies ease in U.S., state

e-mail
print

By Paul Gores of the Journal Sentinel

July 25, 2011 |(1) Comments

Click to enlarge

Bankruptcy filings in Wisconsin and the nation are running behind last year’s pace, but attorneys say it’s too soon to know whether the wave of filings triggered by the economic downturn has crested.

Still, at least in some lawyers’ offices, the number of people coming in to declare themselves insolvent has slowed slightly. And more of those filing for bankruptcy today are people who at one time were higher on the economic scale. That compares with many of those who filed earlier in the recession – people who were living paycheck to paycheck and folded quickly when their income was cut, lawyers said.

“I think those that we’re seeing now are those who were able to survive the downturn – people who were self-employed, people who had higher-paying jobs, were able to tap into retirement accounts and use the credit card but make the minimum payments,” said James Miller, of Miller & Miller in Milwaukee. “There is just not that same mass of people as those who fit into the first category.”

U.S. Bankruptcy Court records show bankruptcy filings fell 8.4% in the first half of 2011 in Wisconsin, to 14,682 from 16,024 in January through June 2010. About 80% were Chapter 7 filings, which wipe out debt on things such as credit cards, medical expenses and utility bills.

The Wisconsin numbers mirror a decrease in consumer bankruptcies nationally. There were 709,303 filings in the United States in the first six months of 2011, an almost 8% decrease from 770,117 during the same span in 2010, according to American Bankruptcy Institute.

“What we’re seeing is still high filings, but off the peak,” said David Leibowitz, founder and managing member of LakeLaw in Milwaukee and Kenosha. “I don’t think we can take a great deal of comfort in it. But I do think that there’s a direct correlation between the economy and unemployment on one hand and the bankruptcy statistics on the other hand.”

Madison bankruptcy attorney Claire Ann Resop of von Briesen & Roper said people who had been making at least midlevel incomes are among those she sees more frequently. Among those on the list: teachers, nurses, sales people, tradesmen, homebuilders and truckers.

“They had higher income and they had more resources to try to keep up for a while,” she said.

Milwaukee attorney Robert Waud said he was “kind of surprised” to hear the number of filings in the state declined.

“It’s pretty steady coming in the door,” he said.

Small-business owners, trades people and land developers are common bankruptcy filers, he said.

Waud, of Todd C. Esser & Associates, isn’t convinced bankruptcy filings have peaked, even if the half-year trend is down from a year ago.

“I think it’s too soon to say,” he said.

Miller said restraints on credit since the start of the recession and financial crisis have cut the likelihood of people charging huge debts that end up in bankruptcy.

“Credit companies aren’t taking as many risks on people, so there are not as many credit-related defaults,” Miller said.

Lawyers said issues that historically have led to bankruptcy remain the big factors – uninsured major medical costs, divorce and job loss.

“The problem still, as far as I’m concerned, is there are not enough people working,” Waud said.

We can Lower your car payment through bankruptcy

Jamie Miller — Tue, 12 Jul 2011 17:07:33 +0000

In you own a car that you owe more than it is worth, our lawyers may be able to help lower your car payments. Our lawyers can use a Chapter 7 bankruptcy redemption to lower your payment. Many people are forced into bankruptcy because a car loan company has over-financed a vehicle. A high car payment can make it impossible to afford your car. We may be able to force your car lender to accept a payoff on your vehicle for only the value of your vehice.

In a Chapter 13 bankruptcy we can “cram down” or reduce what you owe on the car to what the car is worth. Our experienced lawyers will help you figure out if this is a solution for you.

We can even get your car back and reduce your car payment if your car has already been repossessed.

Debts That Might Not Be Discharged In Bankruptcy

wyanow — Mon, 23 Aug 2010 17:52:36 +0000

*Criminal fines or restitution or drunk driving injury claims

*Guaranteed Educational Loans

*Fine or penalty owed to governmental unit

*Damages arising from willful injury to person or property

*Spousal or child support, or ex-spouse attorney fees for obtaining support

*Income taxes less than three years old

*Income taxes over three years and tax return not filed more than two years ago

*Income taxes not assessed at least 240 days

*Payroll taxes and sales taxes