Colorado Bankruptcy Lawyers

Happy Birthday OREO Cookie

2012-03-05T16:24:00.000-08:00

While trying to come up with today's blog topic, which should somehow relate to consumer bankruptcy, I came across one of today's top stories which, of course is that Milk's favorite Cookie, the Oreo, turned 100 years old.

That got me thinking, "I want an Oreo." How can I concentrate on writing a blog about Chapter 7 and Chapter 13 Bankruptcy, fresh starts, affordable bankruptcy attorneys, and free consultations when all I can think about is that sweet creamy middle and the delicious chocolate wafers on the outside. Mmmm...now I need some milk too.

So today my blog entry will honor the Oreo. I will avoid discussing outstanding credit card debt, wage garnishments, medical bills, foreclosures and crushing debt that a bankruptcy filing could help a person overcome. Instead I will discuss how awesome it was as a child to split open a delicious Oreo and methodically eat the cream filling and discard the remaining chocolate cookies, although now as an adult I appreciate the combination of the chocolate and the super sweet filling. These days, I watch my daughter do exactly as I did when I was younger.

Happy Birthday Oreo! It is great that you have made it 100 years. We can only hope that you make it 100 more. Now this bankruptcy attorney must finish her work for today and answer questions like Can I keep my car in bankruptcy? Can I keep my home in bankruptcy? Will I lose my job because of bankruptcy? How long does bankruptcy remain on my credit report? How will bankruptcy affect my credit score? How does bankruptcy work? What happens at a bankruptcy creditors meeting? I am glad that I was able to take a moment to appreciate something as fine as the Oreo.

I must now go home and dig into the Costco-sized box of Oreos my daughter (of course I am going to blame her - she can hardly read) insisted that I buy! If however the questions about bankruptcy are of concern to you, this Oreo-loving attorney and her partner (who prefers double-stuff) at Greenwald & Hammond can answer these and many more specific bankruptcy questions in a free bankruptcy consultation. Call today for a consultation.

Submitted by:

Mindy Greenwald, Esq.

Common Bankruptcy Fears Put to Rest

2012-03-03T18:02:00.000-08:00

When considering bankruptcy many people are afraid they will lose their home or their cars. Some fear that they will lose their jobs, others fear that their credit will be so bad that they will not be able to get financing for a new car or home. In most cases these fears may be alleviated after speaking to an experienced bankruptcy attorney.

Can I keep my car if I file for bankruptcy? In most cases the answer is “yes, if you want to.” In Colorado a debtor under the age of 60 is entitled to a $5000 exemption on the equity in their vehicle. A debtor over 60 or with a disability is entitled to a $10,000 exemption. If there is a lien on the vehicle, a debtor must be current on the car payments in a chapter 7 to keep the vehicle.

If a debtor has more equity in the vehicle than the available exemption, there are several options to protect that equity. A debtor may choose to file chapter 7 and negotiate a short payment plan to “buy back” the non-exempt portion of the vehicle. This may work where there is only a small non-exempt amount (for example the debtor’s equity in the vehicle is worth $6000 so the debtor must pay $1000 to the bankruptcy trustee). Another option is to look for other exemptions that may apply. Some debtors may be able to exempt their vehicle under the “tools of trade” exemption. This can be tricky though. The vehicle must be necessary to the debtor’s employment, not just to get the debtor to and from work.

Where the debtor has a significant amount of non-exempt equity in a vehicle or other asset, a chapter 13 can be used to protect and retain assets. In a chapter 13 debtors do not turn over their non-cash assets to the trustee for liquidation. Generally, however, the value of all non-exempt assets must be paid into the chapter 13 plan for distribution to unsecured creditors to the extent that the unsecured creditors would have received any distribution under a chapter 7 bankruptcy (simply put, a debtor with equity in a vehicle of $20,000 may be required to pay $15,000 to unsecured creditors through chapter 13 plan payments, though there are several caveats and possible reductions that will likely be taken into consideration, however the asset will be protected and debtor will be able to keep the vehicle).

Can I keep my home in bankruptcy? Much like the vehicle, in Colorado, a debtor can claim a $60,000 exemption against the equity in the home (the exemption is $60,000 whether the case is a joint case or not). A debtor over 60 years of age or with a disability may claim a $90,000 exemption in the home. In a chapter 7 a debtor must be current on the mortgage payments. A chapter 13 can be used to catch up payments when payments are not current, or to pay excess equity if the situation calls for it. More often the issue is that there is little or no equity and a debtor wants to save their home by catching up arrears through chapter 13.

Will I lose my job if I file for bankruptcy? Employers are forbidden from terminating an employee simply for having filed for bankruptcy. This can be a sticky area because employers may find other reasons to terminate employees but if a debtor believes that the bankruptcy was the actual reason for termination, an employment attorney or bankruptcy litigation attorney should be consulted.

If fears of losing assets or employment are keeping you from filing bankruptcy, now is the time to speak to an experienced bankruptcy attorney to learn how bankruptcy works. At Greenwald & Hammond experienced attorneys will address your specific circumstances in your free initial consultation so that you know exactly how bankruptcy will work for you. Contact us today to meet with a compassionate female attorney who will listen to your concerns and answer your individual specific questions.

Submitted by:

Mindy Greenwald, Esq.

If You’re Ready For Retirement, Don’t Let These Things Surprise You

2012-03-02T21:17:00.004-08:00

I am no where near retirement age, but I love reading articles about how to prepare for it. I feel that it’s never too early to plan for retirement, especially if you have an idea in your head about the lifestyle you want. If you want to travel and play golf all day, you need to determine how much money you’ll need to save in order to support those activities. If you find that you are barely able to make ends meet with your employment income, imagine what it will be like if you’re living off of Social Security and your 401k withdrawals. This can be a big hit to your budget.

I recently read a Kiplinger article that outlined 5 unexpected, yet costly retirement expenses. Thinking about these things in advance can help you plan for retirement, or at least ensure that you will not get caught off guard. I recommend reading the entire article, but I thought I would touch on a few of the items that I found most interesting.

One unexpected event may not seem like a bad thing at first glance. We work hard to stay healthy so that we can live a long life, but if you think about it, living longer is going to cost you more. When you prepare to save enough for retirement, determining how many years that money has to last is very important. Saving more for retirement may not be an option, so many people will either have to work longer or figure out how to spend less in their golden years.

As we get older, we can expect to have more healthcare needs. Without a continued income, it can get very expensive. Prescription drug costs alone can get out of hand for many people. Health insurance premiums increase as we get older and the quantity of necessary medical procedures is much greater. We tend to think of how much money we’ll need in retirement to pay our living expenses, but it’s harder to anticipate medical expenses for ailments we don’t even have yet.

The above two factors may be unexpected, however, the effects may be minimized with advance planning. But what do you do when you’re retired and your adult children turn to you for support? This is something that seems to be occurring more and more often. Whether your kids need a roof over their head, a loan, or help with expenses for the grandkids, most retirees aren’t financially prepared to give continued support to their children. I think that many have even secretly hoped that their kids would be in a position to help support them, rather than the other way around. Many couples are faced with kicking their kids out of the nest for a second time.

Retirement will bring many challenges, but perhaps with a little advanced planning we can ease the transition, and maybe even enjoy ourselves.

Submitted by:

Kerry Hammond, Esq.

Bankruptcy Attorney

The Importance of a Credit Score

2012-02-28T15:07:00.001-08:00

Credit scores are more than just a way for your creditors to record your outstanding obligations and late payments, they can also decide if you will be approved for any new credit and what interest rate you will be offered. We hear about extremely low interest rates on cars and homes, but seldom realize that those rates are only available to people with perfect credit. Allowing your credit score to suffer can have more long term affects than you’d think.

It’s always important to know what your credit report looks like. Getting a free report each year can help you keep track of what is reported. You can make sure that the accounts listed are in fact yours, and whether or not your on-time payments are accurately recorded. If you see something on your report that is incorrect, you can contact the reporting agency to dispute it. Checking your report each year allows you to stay on top of things before they get out of hand. For a free report, go to www.annualcreditreport.com.

It may be common knowledge, but the best way to lower your credit score is to not pay your bills on time. Some companies will report your missed payment if it is 30 days late, and some will wait until 60 days or more. Either way, late payments will begin to show on your report and affect your score. Therefore, making a late payment to your credit card can result in more than just a late fee.

Another reason your score may be lower than you’d like is that you are over extended or you are constantly applying for new credit. Applying for every store card out there allows those companies to inquire into your credit. It can ding your score if you have too many inquiries. Maxing out the credit you have available to you can also lower your credit score, since the reporting agencies are in part measuring the chance that you will default on your obligations. If you are maxed out, the chance of default is higher.

So what do you do if you just can’t afford to make payments on your credit cards? Depending on your reason (lost job, medical emergency) you may want to speak to an attorney and evaluate your bankruptcy options. You hear a lot about the downsides of having a bankruptcy on your credit report, but what most don’t know is that filing a bankruptcy can actually help you stop the late payment cycle, allowing you the chance to rebuild your credit.

Making on-time payments to all of your credit cards will build a positive payment history and put you on track to a higher credit score. If this isn’t possible for you due to circumstances that are beyond your control, call Greenwald & Hammond to set up a free consultation.

Submitted by:

Kerry Hammond, Esq.

No Relief From Student Loans - Will it ever change?

2012-02-27T11:43:00.000-08:00

Lately I keep hearing that Student Loan Debt is a ticking time bomb much like the housing bubble was in recent years. Sadly, all too often, I encounter debtors who remain powerless against their student loan lenders and collection agencies.

Few people incur student loan debt with the expectation of being unable to pay.  Most college and graduate students incurring debt for education assume that they would be employable once they finish school.  Unfortunately in a bad economy, this is not always the case. Even those that are employable, and employed, may not be earning enough to pay the unforgiving student loans that they incurred. An $80,000 education does not amount to an $80,000 per year paycheck and usually does not even amount to a $40,000 per year paycheck, especially in today's economy.

I recently met with a graduate of a small fine arts college.  While in school, she was not provided with any education informing her of how much her payments would be when she graduated school. Each year she incurred the loans so that she could obtain her degree in fine art, she was provided with assistance filling out the documents by her school's financial department. After four years she had more than $100,000 in student loans.

Her skills, which are specialized to the fine arts, allow her to be employed at roughly $30,000 per year. Her monthly take home pay is roughly $2,000 and her student loan minimum payments are approximately $1,100 per month (not at a fixed APR). She has used up all of her forbearance and cannot afford to live on only $900 per month. She has no other debt. She refuses to use credit cards and relies on family and friends to help her get by in tougher months.  She is not alone. I have met with numerous hopeful young people, employed (sometimes working two or three jobs), yet unable to meet their student loan obligations.

Sadly when she came to me (a bankruptcy attorney) to seek relief, I had to tell her there was nothing I could do. For some with additional debt, it might help to eliminate other debt, freeing up money to pay student loan debt, but for her, there was no other debt. She is basically living in poverty as a slave to her student loan debt.

Under the bankruptcy code, student loans, private and government backed, generally cannot be discharged. In order to discharge a student loan a debtor in bankruptcy must file an adversary proceeding (a separate lawsuit in bankruptcy court) for a determination of dischargeability. The debtor must prove that the loan is substantially burdensome. For many the reality is that the loan is extremely burdensome, however, the standard to prove such a burden is so high that a debtor must essentially be permanently disabled with no possibility of using their education for financial gain. Without the ability to meet this standard, most able-bodied debtors continue to struggle with no relief from student loans.

While government-backed student loans provide some relief to debtors who are experiencing hardship, private loans offer no help and no sympathy to those who are struggling and they are quick to send loans that are in default to collections. Unlike all other forms of debt (including taxes), there is no statute of limitation on the collection of student loan debt, so collectors may follow debtors to their graves.

There is now a bill in congress to amend the bankruptcy code to provide relief from private student loans under the bankruptcy code, treating it like all other unsecured debt. H.R. 2028 was proposed in May 2011. It is now at the committee level. Many bills do not make it past the committee level, but in today's economy this is the type of relief that the middle class really needs. There are so many young people who are suffering from bad credit and the inability to pay their living expenses because of the excessive amount of student loan debt they have that this would seem to be an obvious way to help many who are desperate.  Hopefully the federal government will get this one right.

Submitted by:

Mindy Greenwald, Esq.
Bankruptcy Attorney
Greenwald & Hammond, PC

It’s Tax Time Again, Don’t Miss Those Important Deductions

2012-02-24T13:49:00.000-08:00

If you haven’t filed your taxes yet, make sure you do a little research to determine if you may be overlooking any deductions. More deductions means less taxable income, which means owing less to the government. Below are a few frequently missed deductions to think about. But in every situation, consulting with a qualified tax specialist is always your best bet. This article is not meant, in any way, to be tax advice. Spending a small amount on an accountant can go a long way to decreasing your tax liability, or better yet, increasing your refund.

One of the deductions a lot of people miss is healthcare. If you pay your own insurance premiums (especially people who are self-employed) you can deduct your premiums and medical expenses that you paid throughout the year. Different rules, and percentages of your adjusted gross income (AGI), apply for self-employed versus employed, so again, ask a tax specialist.

For those who were unemployed and searching for a job for a large part of 2011, you can deduct your job hunting expenses. You may have hired a firm to write your resume, spent money traveling to interviews, etc. If these expenses are 2% or more of your AGI, you’re clear to take the exemption.

Almost everyone I’ve ever known donates used clothing to the Goodwill or some other charitable organization. Don’t forget to add these donations of goods to any other donations of cash that you may make throughout the year.

Lastly, there are a lot of people who have opted to go back to school to earn a first time degree, or an additional degree. Depending on your income, you may be able to deduct tuition you paid last year for any college or professional school.

When it comes to taxes, a little goes a long way. If you take advantage of all the deductions available to you, it can quickly add up and save you money. Whether it means you owe less or get a refund, it’s all money in your pocket, where it should be.

Submitted by:

Kerry Hammond, Esq.

Bankruptcy Attorney

New "Hope" for Distressed Homeowners

2012-02-23T16:26:00.000-08:00

A major settlement was reached earlier this month between the Federal Government, state attorneys general and the five largest mortgage servicers. The settlement will become a court order imposing sanctions for non-compliance and putting in place servicing standards that must be met. The terms may offer significant relief to distressed homeowners as well as to homeowners with negative equity who are unable to refinance adjustable rate mortgages.

Some key terms of the settlement provide for:

1) relief for struggling homeowners: in the form of principal reduction or alternative assistance (examples are facilitating short sales, relocation assistance, forbearance during periods of unemployment) for homeowners who are in danger of default. The reduction in principal will result in lower monthly payments for homeowners who intend to stay in their homes and can make reasonable payments on the homes.

2) refinancing of homes that are underwater: to be eligible the loan to value ratio must be at least 100% meaning the value of the home must be the same or less than the principal balance on the loan. The loan payments must be current and the loan must have a current interest rate in excess of 5.25%. The refinance terms must lower payments by at least $100. Banks will be required to notify borrowers if they are eligible for this program.

3) mortgage servicing reform: that will include the requirement of notifying and evaluating borrowers of their loss mitigation options prior to foreclosure and prohibiting foreclosure actions while modification is being pursued. Banks will be required to provide borrowers with a single point of contact at the bank while pursuing modification. Restrictions on default fees, late fees, forced insurance, and other third party fees will be imposed as well.

In addition to the above relief, terms were reached for monitoring and enforcement, payments to foreclosure victims, and penalties for violations of state law.

We will probably have to wait and see whether this settlement will force all mortgage servicers to act "more reasonably." But for many, it may provide some much needed relief. For more information and links to your state attorney general click here for a website set up by the attorney generals committee who negotiated the settlement.

If your first or second mortgage is creating a financial hardship for you, chapter 13 bankruptcy may be able to help too. If you are behind on payments or fear that you may be in danger of losing your home, contact Greenwald & Hammond for a free initial consultation.

Submitted by:

Mindy Greenwald, Esq.
Bankruptcy Attorney

Finding the Cheapest Gas Prices

2012-02-21T14:01:00.000-08:00

In a bad economy, no one wants to pay more than they have to for goods and services. I find it more painful when the goods and services are things that I need versus things I just want, because I can’t avoid the cost. Anyone who drives a car has to buy gas, and with prices as high as they are, paying more than you need to can add up quickly.

I recently came across an article on Yahoo entitled 5 Tips to Find the Cheapest Gas Prices and wanted to share it with you. Following the tips may take a bit of time and effort on your part, but if the savings add up considerably, I for one wouldn’t mind the work.

To sum up the article, here are the 5 ways to find the lowest prices:

1. Mobile Apps & Websites – track the prices using websites such as gasbuddy.com or gaspricewatch.com. You can search using your zip code.

2. Don’t buy right off the highway – the convenient stations charge the most. You can either drive a little ways to buy cheaper, or if you’re like me, always be on the lookout for prices when you’re out and about. You can spot the cheaper prices and either fill up then, or know where to go back when you need to fill up.

3. Timing – apparently just as there is a best time for buying airline tickets, there is also a best time to buy gas. I even think they might be the same day; Wednesday according to some. It does make sense that prices would be highest on weekends when we’re out driving around and having fun. If you can avoid it, don’t fill up then, unless you absolutely have to.

4. Partnerships - I find that I save money on gas using my King Sooper points that I earn when I shop for groceries. I need to shop for food, so why not take advantage of the extra gas savings when I fill up at a Loaf & Jug? I usually know in advance when I’ll need to fill up, so when I plan to be near a participating station, I make sure that I put a fill up on my list of errands. I find that I often save 30 cents per gallon and have even managed to save 50 cents per gallon on occasion.

5. Fill up yourself – I don’t know of any stations that even offer full service, so this one may not be a great help. But if you are out there using a full service station, you may want to rethink the premium you’re paying for this service.

If you’re willing to put a little bit of work into it, you can save yourself quite a bit over time. Why pay more than you have to?

Submitted by:
Kerry Hammond, Esq.

Bankruptcy Attorney at Greenwald & Hammond, P.C.

Minimum Payment Warning!

2012-02-17T17:16:00.000-08:00

Credit card companies are now required to list how long it will take you to pay off your credit card if you just pay the minimum balance each month, along with the amount of money you will end up paying over that period of time. But does anyone actually look at this part of their bill?

I have to admit, that I keep a balance (and pay lots of interest) on the credit card that I use for business purposes. I’m sure this minimum payment warning box has always been on there, but I’ve never even noticed it. Ok, it’s confirmed, I just looked back through a year’s worth of statements and that box was on every one of them. Of course it’s thrown in there on the first page with other things I don’t really look at, like my “ultimate rewards summary” and “blueprint summary” (something Chase offers that I don’t’ even understand).

If placement is only part of the reason we don’t see this box, what else is there? Maybe denial? It’s great that the credit card companies are now required to show us this warning, but how many of us would rather not see it, meaning we would rather not know? It’s part of the whole head in the sand syndrome that happens to a lot of us when the economy is bad and we struggle to pay our bills.

Instead of ignoring this warning section, I suggest we all analyze it and come up with a game plan. My bill shows how long it will take me to pay off my credit card if I make minimum payments. It also shows me some random number that I can pay each month that will allow me to pay it off in 3 years. But what if my payment is somewhere in between? Here is a link to a calculator that allows you to input your balance, percentage rate, minimum payment percentage, and proposed payment.

This calculator will help you plan out a payment you can afford and allow you to tweak the numbers until you come up with an amount you are comfortable with, that will allow you to plan a payoff date for your credit card. Now keep in mind, this only works if you’ve stopped using your cards and are just trying to pay them off. If you continue to charge items, you will have to redo the calculation each month. This may seem tedious, but I still think that it’s better to know than to be in the dark.

Of course, if you enter the payment that you can afford and it tells you that it will still take 34 years to pay off the card (and this is not your only card) you may want to re-evaluate your situation. If you find that the debt you have will most likely take you your entire life to pay off, consider getting help. Bankruptcy may not have been on your list of life goals, but sometimes life doesn’t go the way we planned.

You can contact Greenwald & Hammond and set up a free consultation to discuss your debts with a bankruptcy attorney. Maybe it’s time to re-evaluate your plan and get back on track.

Submitted by:
Kerry Hammond, Esq.

It’s the Thought That Counts

2012-02-14T15:36:00.000-08:00

It’s Valentine’s Day and I know the above sentiment is used quite a bit, I really think that in many cases it’s true. The economic crisis continues and people are still struggling to make ends meet, so perhaps it’s especially true right now.

We all struggle to find that special someone a great gift for Valentine’s Day, one that says just what we’re feeling, yet won’t break the bank. It seems like the cost of a dozen roses is always in the range of $50, so maybe now is the time to say “I love You” in a different, and inexpensive way.

Here are some great ideas for Valentine’s Day that won’t drain the bank account:

1. Knit a scarf.

2. Write a love letter.

3. The old tried and true coupon book (promising things like dinner, dish washing or a massage)

4. Light a fire in the fireplace, put a blanket down and have dinner in your living room - picnic style.

5. Rent a movie (Redbox is still under $2).

6. Make your own card instead of buying one.

7. Turn off the TV and play a game instead.

Sometimes it’s just doing something different that makes for a special occasion. Whatever you do for Valentine’s Day, I hope it’s a great one!

Submitted by:

Kerry Hammond, Esq.

Bankruptcy Attorney

Choosing Tap Over Bottled Could Save You More than You Think

2012-02-13T15:51:00.000-08:00

I just read an article about college campuses banning bottled water. While you may or may not agree with the ban, I found an interesting statistic in the article. Drinking eight glasses of water a day from a water bottle can cost consumers roughly $1400 per year. Drinking the same amount of tap water would run the consumer roughly $.49 per year.

Obviously most people do not drink exclusively one or the other, but a family of four who regularly uses bottled may be spending far more than they think on an expense that may be unnecessary, and according to some studies, unhealthy. If your tap water is something that is less than desirable, try a water filter. We use a water filter in our office and it works well.

It is such a small thing, that most people would not think of to save money but if finances are tight, small changes can really add up! So even if you are not "green" cutting out bottled water might still be worth while.

Submitted by:

Mindy Greenwald, Esq.
Bankruptcy Attorney

Banks May Be Offering Short Sale Incentives

2012-02-08T11:28:00.000-08:00

It seems that more and more banks are working with homeowners to approve short sales. Some are even offering cash incentives to help with relocation costs. Is it possible they have finally realized that it’s cheaper and quicker for them to approve a short sale than it is to hire an attorney and foreclose on the property? This doesn’t mean that all banks will approve a short sale, or offer a cash incentive, but it shows a trend that may greatly benefit homeowners needing to get out from under a mortgage.

In the past, it has proven very difficult for homeowners to get a bank to agree to a short sale. The concept behind a short sale is that the homeowner finds a buyer for the house, but that buyer is willing to pay less than the homeowner owes the bank, so the loan wouldn’t get paid in full. The homeowner submits this offer to the bank and tries to get their approval to accept less than what is owed on the property. It can take the banks so long to approve or deny these offers that many times the buyer moves on and the homeowner has to start all over again. Even if the buyer sticks around, many banks simply deny the request and the homeowner is right back where they started.

Additionally, it has been nearly impossible to go the short sale route if you have more than one mortgage. If you convince the first mortgage holder to take less than is owed, the second mortgage will get absolutely nothing. Who would sign off on that? An article in Bloomberg states that the banks who are starting to push for short sales may also be willing to pay a few thousand dollars to these second lienholders in order to get them to go along. This is a huge benefit to anyone with multiple mortgages on their property.

Don’t be fooled, the banks aren’t doing this out of the goodness of their hearts. They are benefitting by avoiding the time and cost associated with a foreclosure (it takes an average of 348 days to foreclose on a property in the U.S. and another 175 days for the bank to resell the property if they buy it back). However, the homeowner is spared the hassle associated with a foreclosure and the possible deficiency that the bank will try and collect after sale. Even if you don’t add a cash incentive to the mix, I can only see it as a win/win.

Submitted by:

Kerry Hammond, Esq.

Bankruptcy attorney at Greenwald & Hammond, P.C.

Those Dreaded Debt Collector Calls

2012-02-05T18:16:00.000-08:00

When a debt goes unpaid, whether it’s a credit card debt , utility bill, or medical bill, many companies sell the debt to a third party debt collector. These debt collectors buy the debt you owe to Visa and they use their resources (call centers usually) to try and collect the debt. They only get paid if they can get you to pay, which causes a lot of them to be very aggressive.

There have been lawsuits, and even arrests, when these debt collectors go too far. Last year I saw a news program where a man in Buffalo was arrested because his debt collection company was threatening debtors with a visit by the sheriff, saying that they would be arrested if they didn’t give their bank account number over the phone for a payment.

Much of the time, these debt collectors have a valid interest in the debt you owe and the right to collect on that debt. Beware, however, of whether or not you are still obligated to pay that debt. Each state has a statute of limitations that limits the amount of time a creditor has to file a lawsuit against you. If that statutory time has passed, they can no longer take you to court to collect on that debt. If you make a payment on the debt, however, you can restart that statutory clock and bring that debt back into play.

The Federal Trade Commission (FTC) has started to better police these debt collectors and recently fined Asset Acceptance for failing to check if the statute of limitations had run or inform debtors of the fact that in many cases they had no right to sue for the debt if the debtors did not pay. Most states, however, do not require debt collectors to check the statute of limitations before contacting consumers. It’s really up to the consumer to know their rights. Here is a link to the FTC Consumer Alert that discusses time-barred debts.

Knowing the law can be very difficult and confusing. If you’re getting calls from debt collectors and don’t know your rights, speak to an attorney. Many attorneys offer free consultations, so it won’t cost you a penny to find out what your rights are. At Greenwald & Hammond, you can speak to an attorney about the debts you owe to find out what can be done to stop harassing creditor calls.

Submitted by:

Kerry Hammond, Esq.

When to Talk to a Bankruptcy Attorney

2012-02-02T22:46:00.000-08:00

All too often I meet clients who have spent a fortune to try to get out of debt, only to hear me say that they should have come to me years ago, when their troubles started. It is so unfortunate to meet with people that paid their entire savings to sell their home or used money from an IRA or 401K to payoff only a portion of their debt and find that they still needed to use their credit because every month all of their income was still going to pay the credit cards, and ultimately they have to file for bankruptcy.

It may be hard to accept that bankruptcy is the best option because no one really ever wants to file bankruptcy. Some situations in which you may want to contact a bankruptcy attorney include:

You pay the minimum on your credit cards but then don't have enough money to live on so you're back to using your credit by the end of the month;
You are considering dipping into your IRA to pay your mortgage or any other debt;
You have missed car payments and are worried about repossession or you can no longer afford your car but owe more than it is worth;
Your wages are being garnished or you are being sued by creditors; or
You can no longer afford your home, or you are behind on your mortgage and hope to save your home from foreclosure;

If you are having trouble deciding which bills to pay and which can wait, or your financial situation keeps you up at night, talking to a bankruptcy lawyer can help you assess your situation and determine whether bankruptcy is a solution to your financial situation. At Greenwald & Hammond we offer a free consultation in which we offer advice based on each client's unique circumstances. Call for an appointment with an experience bankruptcy attorney.

Submitted by:

Mindy Greenwald

Benefits and Consequences of Defaulting On Your Mortgage

2012-01-31T18:26:00.000-08:00

The housing crisis has caused a lot of Americans to default on their home loans. Many people are finding they can no longer afford their mortgage payment, whether it’s due to a pay cut, job loss, or medical emergency. Others may find themselves able to scrape by, but only by draining their retirement accounts or using credit cards for food and gas each month.

While some people are defaulting out of necessity, others are defaulting as part of a strategy. You may hear about these people, they decide to walk away from their homes because they are underwater on their mortgage, meaning that the home is worth less than they owe the mortgage company. You may think these people are irresponsible or immoral, but be careful before you judge this particular book by its cover.

When someone decides to let a home go, it’s not an easy decision. There are “costs” to defaulting on a mortgage, and if you’re considering it, it’s important to make sure you know the pros and cons before you make the final decision to stop paying.

Very few states offer deficiency forgiveness, and Colorado is not one of them. If you default on your mortgage, your bank will eventually start a foreclosure and it will be auctioned off at a foreclosure sale. If it sells for less than the bank is owed, there is a deficiency. You are on the hook for this amount and the bank will most likely try to collect.

In addition to a deficiency owed to the bank, you will have to accept that your credit score will take a hit. This will affect interest rates you are offered for things such as future car loans and credit cards. Most banks won’t approve you for a mortgage for about 4 years with a foreclosure on your credit, and that’s only if you build your credit to a score they will accept.

Neither of these will sway you if you are unable to make ends meet and defaulting on your mortgage is the only option you have. If this is the case, one of the only ways to ensure that you won’t be affected by a foreclosure deficiency is to file bankruptcy. If you have other debt that you are unable to payoff, speaking to a bankruptcy attorney is something you really should consider. Getting out from under a mortgage you can’t afford may only be the first step to getting back on track. Call Greenwald & Hammond today to set up an appointment for a free consultation.

Submitted by:

Kerry Hammond, Esq.

Bankruptcy and Income Tax

2012-01-30T22:16:00.000-08:00

Tax season is upon us. If you have not received your W2 yet, you should have it by tomorrow. While we may not have a fondness for preparing our taxes or even paying our taxes, tax debt and tax refunds each have a special role and deserve special consideration when an individual is considering bankruptcy.

The determination as to whether tax debt can be discharged in a bankruptcy is one that even seasoned bankruptcy attorneys struggle with. As a rule, income tax debts that are due and owing for the three tax years prior to filing bankruptcy are not dischargeable. Income tax debt that was due more than three years prior to filing requires some additional analysis when trying to determine whether taxes can be discharged in bankruptcy. The date the tax return was filed and the date of the assessment are important dates to have when seeking a determination regarding whether an income tax liability will discharge in bankruptcy.

When tax debt is a problem, bankruptcy may be able to help. For Debtors with income a chapter 13 can be used to pay taxes while eliminating some or all of the interest and penalties on past tax liability. Generally income taxes due for the three years prior to filing bankruptcy are considered priority debts and in a chapter 13 must be paid through the chapter 13 plan. Because the IRS charges such high interest on past due income tax, chapter 13 can be used to stop the interest from accruing and pay off the tax liability through a chapter 13 plan over three to five years.  At the completion of a chapter 13 plan the interest and penalties as well as older tax debt that meets certain criteria, will be discharged.

Chapter 7 may be used in some instances to discharge income tax debt that meets the criteria for discharge. It can also be used to eliminate other debt thereby allowing any available income to be applied to any non-dischargeable tax liability.  In some instances income tax debt may be resolved through an offer in compromise following a chapter 7 bankruptcy.

If you do not owe taxes then it is possible that the IRS may owe you! If you are anticipating a tax refund and considering bankruptcy there are some things you should know. In Colorado, there is no exemption for tax refunds (some states have a "wild card" exemption which can be claimed to protect a bankrupt debtor's right to receive a refund). Because there is no exemption, if the IRS (or the state) owes you a tax refund, if you file bankruptcy before you receive your refund, you will be expected to turn over the refund for the benefit of your creditors (some trustees will even intercept your refund).

Most attorneys will tell you that it is advisable to file your taxes, receive your refund, and spend the refund on your necessary living expenses prior to filing bankruptcy (although there are some cases in which delaying filing bankruptcy while waiting for a refund may not be advisable).  If you are planning to go this route, it is important to note that refunds should not be used to pay debts to close friends or family members. It also would not be wise to use the money to pay creditors whose debt would otherwise be discharged in the bankruptcy. The money can be used legitimately to pay for the cost of filing the bankruptcy, attorneys fees for a bankruptcy, doctor or dentist visits, car repairs, necessary household repairs, clothing for your dependents, food, mortgage (or rent) expenses, and/or moving expenses. Of course this is only a partial list of legitimate uses for spending a tax refund prior to filing bankruptcy.

Whether tax debt is a problem or spending a refund is at issue, discussing the options with an attorney will typically lead you in the right direction. Contact Greenwald & Hammond today for a free bankruptcy consultation.

Submitted by:
Mindy Greenwald, Esq.

Have Home Prices and Interest Rates Really Hit Rock Bottom?

2012-01-27T16:49:00.000-08:00

Many people dream of being homeowners. I, on the other hand, dream of never owning my own home. As a lifelong renter, and someone who has frequently been accused of not being inside the box, I am very intrigued by articles that tell you that NOW is the best time to buy. Usually it’s because home prices have hit rock bottom or interest rates are at an all time low.

Since, as stated above, I am constantly reading these articles, it’s amusing to me when I read the same message year after year. How can prices be at rock bottom in December of 2010 and then the same in December of 2011? I realize that I have to consider the source and that many of these soap boxers are in the real estate market, in the form of Realtors or bankers. But it still makes you think.

I also find it fascinating that the American dream is so attached to home ownership that even people I represent in bankruptcy, who have surrendered a mortgage they couldn’t afford, are asking me when they will be able to buy again. They haven’t even gotten their discharge yet and they are wondering when they can sign on the dotted line and lock themselves in for another thirty years.

Don’t get me wrong, owning a home may be the right decision for some people. If you’re going to live there for 15 years or more (this number used to be 5) you may even break even when you sell. If you have kids and want to lock into a coveted school district it may also make sense to plant mortgage roots. But there are so many people out there who would benefit by speaking to a financial advisor to see if it’s the right financial move for their situation.

Like anyone else, I am amused by articles that disagree with my stance, and tickled at ones that agree. I thought I would share a link to a video and article entitled “Don’t Buy a Home OR Home Builder Stocks.” It contains an interview with Todd Schoenberger, managing director at LandColt Trading. He gives his opinion of the market and whether or not it’s time to buy. Watch and decide for yourself.

And, as always, I want to point out that Greenwald and Hammond is a bankruptcy law firm. We offer free consultations to anyone who is in financial trouble or considering bankruptcy. So if you bought a house in search of the American dream, only to find out that it was more of a nightmare, call my office. There may be a way to get your life, and your sanity, back.

Submitted by:

Kerry Hammond, Esq.

Coupons That May Not Save You Money

2012-01-26T16:03:00.000-08:00

If you are like me, then every time you log into your email, you have at least five "money saving" coupons for goods and services in your inbox. At first, I was excited to receive my one email a day from Groupon to see what great service I could obtain at a ridiculously low price. Now it seems that everyday I receive a multitude of offers from dozens of similar companies. After reviewing the various "deals" I have purchased, I have to wonder, am I really saving money?

The deep discounts are great, especially when they are for something you really want to do or a restaurant you really want to try, and these types of offers are a great marketing tool especially for small businesses who need to get business in the door.  These offers can be really tempting and consumers really should ask themselves, "do I really need/want this?" before buying.

The marketing is simply genius: act now (because tomorrow you cannot get this deal); we have an app too (so you can click buy now from your phone while sitting at a stoplight; your credit card is already in our system so you don't need to hassle with grabbing your wallet; you can print your coupon later or use your smart phone to present the coupon at the vendor's location.

In the past, I have made some smart purchases. I bought a Whole Foods $20 certificate for $10. I am in Whole Foods no less than twice a week, so clearly I benefited from that one. Today I was going to buy movie tickets for $6 which we all know is a good deal, though my friend beat me to the punch and bought both of our tickets. That is a good deal too. Once I bought one to a restaurant that I go to from time-to-time; also a good deal because I would be going to that restaurant again, coupon or no-coupon. These purchases all save us money.

Now for the less-than-good deals:

I bought a set of six laser-hair-removal sessions. I have always thought I wanted laser hair removal to eliminate the need for waxing or shaving. It turns out that the hair I most want gone (some annoying little ones on my face) will not respond to lasers because they are too light. Good news that they are so light (only I can really see them), bad news that I need to use my discount package to remove hair elsewhere that I probably wouldn't have bothered with but for the fact that I bought the coupon. $99 spent on something I definitely would not have paid full price for and definitely didn't need. Not to mention that every time I go in for a treatment, the technician tries to convince me I need botox (something at this time I am adamantly against).

I also once bought a mini-spa package. This included a facial, a haircut and style, a manicure and a pedicure also for $99. Obviously nothing offered was a necessity but it is always nice to have a day of pampering. Well the location was convenient enough and all services were at the same location, a relatively new day spa. The downside, the facial was a "mini facial" so it was only for about 20 minutes and the technician spent the entire time trying to sell me any and all of their products, as well as up-sell the service to a full facial or specialty facial, the haircut and style was okay with the exception of the stylist telling me that he is "not very good at styling fine hair" so I may want to finish blow drying it myself (seriously!), and the mani/pedi was given in an area that is adjacent to the salon where no less then three hairstylists were using blow dryers (loud - not relaxing). I even said to the nail tech (who could barely hear me) that the acoustics there were not good and she agreed.   Another $99 impulse buy that I probably would have been better off without.

There are definitely some really great deals to be had, and these offers definitely allow many people to try things that they otherwise might not have tried. The upside to my experience is that now I don't feel that laser hair removal is something that I cannot afford, it is something I really do not want or need.

The danger of these offers is that many of us are impulsive and when we see something that just yesterday seemed unaffordable (or frivolous) and today we can afford it (and tomorrow it will be gone), the temptation to buy may be hard to resist. If you have been receiving these discount offers for some time, you know that some will repeat eventually, and some may not. In hard economic times, it is still okay to treat yourself from time-to-time but it is important to give yourself time to think before you purchase. When you do buy a "deal" remember that the vendor may not be making a lot of money on your purchase so they have a lot of incentive to upsell and add on to get more of your hard earned money. Be prepared for an encounter with an aggressive salesperson and do not feel bad saying "no" to the "botox special" or some other unnecessary offer.

The thing to remember is that these deals may be great but if you are spending money that you otherwise would not have spent at all, you are not saving money.

PS: please don't tell my husband about all of this! (I am joking, of course).

Submitted by:

Mindy Greenwald, Esq.
Bankruptcy Attorney at Greenwald & Hammond, PC

Managing Stress

2012-01-24T22:17:00.000-08:00

We all talk about being stressed. Our jobs, marriages, and our kids can cause us stress. With the economy the way it is these days, I hear more and more people proclaiming that money problems are causing them stress. The sad fact is that stress doesn’t discriminate. It doesn’t attack people of a certain religion, ethnicity, or nationality. Even kids experience stress, whether it’s in school or on the playground. I think that most people, if asked, would agree that they suffer from stress of some sort.

The levels of stress can vary from person to person. It can depend on physical and mental make-up or external factors, such as what is going on in your life. Medical studies have shown that stress can lead to health problems. It can lower your immune system, causing you to get sick more frequently. And increased medical bills, or loss of work due to illness, can make money matters worse. Therefore, stressing over one thing (money) can circle around (causing you to get sick) and provide you with a reason to stress over something else (medical bills).

So what can we do about stress? How can we deal with it if we can’t afford a $200 an hour counselor, or a spa getaway? I frequently search for ideas that promote relaxation and activities that promise stress relief. I’ve found that some of the simplest ideas can be most effective. You can consciously take several deep breaths when you feel the most stressed. A relaxing bubble bath works for a lot of people after a rough day at work. Or, if you’re adventurous, you can even try meditation. And of course exercise is always helpful to blow off a little steam.

In addition to the above ways to relax, I recently came across an article entitled “Ten Affordable Ways to De-Stress.” Since I’m a fan of all things affordable, I thought I’d see if the article could provide any new and interesting ways to relax. I was pleasantly surprised and have listed the 10 ideas below. Some are repeats, but there are a few new and interesting ones. All are self explanatory.

Do something you haven’t done since you were a kid

Volunteer your time or expertise

Stretch, breathe, or meditate

Hang out with your funniest friend

Sleep (I’m a big fan of this one)

Go to a shooting range

Try your hand at an art project

Make a great dinner using items already in your fridge

Go on a hike or walk

Take a bath with candles and bath salts

So when you start to feel stress over your job, kids, or money, try one of these ideas to get your mind off things and recharge. They won’t solve your problems, but they may just give you the energy to work out a solution.

Submitted by:

Kerry Hammond, Esq.

Spend Less and Still Enjoy Life

2012-01-23T12:49:00.000-08:00

I have always been a chronic money waster. I love to go out to nice restaurants and shop in cute boutiques or fancy department stores. Just like almost everyone else though, funds are limited and I am really trying to find ways to cut back, especially now that I have two very young children.

I recently began playing Mahjong weekly with a group of my friends. So you are probably thinking "wow she is either a very old lady from Florida or a wealthy Asian man." I do not think I am either. All joking aside, after about 7 months of "staying in" with a group of friends, I have discovered that I am spending far less money each month.

Since we started playing weekly, we rotate who hosts and each week about four to nine women get together, play, talk, snack and sometimes drink. As host, one might provide a few snacks (fresh baked pastries) and a bottle or two of wine. As a guest I don't typically need to bring anything, though I have toted the occasional bottle of wine from time-to-time. On occasion we have done a potluck dinner (fortunately I know a lot of really good cooks). The company is always the best part though. For years I would typically round up friends during the week to go for happy hour, which would usually wind up turning into dinner and always wound up costing somewhere between $20 and $60 (per person).

Now every Wednesday evening I can count on having the social contact I really crave and most weeks I will not spend a dime. Before we started this weekly ritual I might have thought that I craved the feeling of "being out and about;" However, the satisfaction and enjoyment I get from the social interaction with my friends is the real draw. Some of my friends had discovered this long ago and instead of having "girls night out," they have "girls night in."

There are so many small ways that we can curb our spending. I came upon an article today on MSN Money entitled "Spend on the Things You do Everyday," which has some good advice on reducing the amount you spend on what the author calls "someone else's life." She discussed how she lives in Texas but owns a snowboard and a wardrobe for snowboarding yet she has only snowboarded once. Her point being that all the money she spent for those items would serve her far better in savings or spent on something she would use far more often. I do not think she regretted snowboarding, rather that purchasing all the accessories (and owning her own snowboard) may have been excessive for the one trip and she would have enjoyed the snowboarding trip equally if she only had one outfit and had rented a snowboard.

If you figure out what you spend your money on it may be easier to figure out how to save money. Though for me it was a pleasant surprise to discover that just having a set night with my friends, helped me spend less. If "going out" is your weakness, try "staying in" with friends about a third of the time and see if that works for you. If Mahjong is not be your thing, Poker, Bridge, Bunco, or Eucre might be worth a try (of course there's always Truth or Dare, a seance or Wija Board too).

Submitted by:

Mindy Greenwald, Esq.
Bankruptcy Attorney at Greenwald & Hammond

Are You in Financial Trouble?

2012-01-20T15:43:00.000-08:00

That sounds like a pretty straightforward question, one that each of us could answer without much thought, and with a simple yes or no. It would be obvious to us if we were in financial trouble, right? Well, for some it may not be that obvious. There may be signs that even people who feel financially responsible may miss.

I think we can agree that if you get a foreclosure notice in the mail, or are served with a lawsuit filed by Mastercard, you are in financial trouble. But there are other signs, ones that are more subtle, that may also tell you that you are either currently in trouble or not very far from it.

The article “5 Red Flags That Show You’re in Financial Trouble” points out some things that we may not have previously considered to be dangerous.

Overdrawn on Your Checking Account

If this happens once or twice in a lifetime, I think we can all agree that it’s a temporary loan from the bank that came at a much needed time. If you find that you are constantly overdrawn, always in the negative, this is a serious issue. It may be an easy fix. You may just be spending too much because you don’t follow a budget. Or, your budget isn’t tight enough for the money you bring in and needs to be tweaked. Either way, re-evaluating your budget is an important first step in this case.

Only Making Minimum Credit Card Payments

If you find that you are paying only minimum payments to your credit cards, you are getting nowhere near paying down your debt. Minimum payments tend to go mostly toward interest and only reduce the balance of your account by very little each month. If you continue to use the card, raising the balance even more, not only doesn’t your balance decrease, but your minimum payment will increase. It’s a vicious circle and a hard one to break. If you switch to using cash, and only buy what you have enough cash for, this is a good start. But at the same time you need to increase your payments above the minimum if you want to see a dent in your credit card balance.

No Rainy Day Fund

It’s hard to fault anyone who lives paycheck to paycheck because the fact that they’re actually able to make ends meet on a monthly basis in this economy can still be a win. However, things come up that can’t be expected. Family members get sick, hours get cut, jobs are lost. Having a rainy day fund can make the difference between sinking or swimming. Even if it’s only a couple of month’s salary, it can still get you out of a jam.

You Only Pay the Important Bills

As stated above, living paycheck to paycheck is one thing. But it’s another to not even be able to pay all of your bills each month. If you are frequently paying the rent but not the electric because you have to choose between them, you may have to revisit your budget to see if something can be done.

Dwindling Credit Score

The lower your credit score, the higher risk you are to potential lenders. This means you’re going to be offered higher interest rate accounts than you would if you had great credit. This might not seem like a big thing now, but when your car dies and you need to go out and replace it, it will matter a lot more. A higher interest rate on an auto loan can make the monthly payment much higher.

It’s easy to see why the above list contains red flags to financial problems, and a lot of the suggestions may even sound like great ideas. But if you’re buried under so much debt that you find that you are unable to implement any of them, it’s definitely time to get help. You may need to speak to a bankruptcy attorney to see if you may be able to get out from under all of the debt in order to move forward, maybe even starting that rainy day fund.

At Greenwald & Hammond, we offer a free consultation where we can discuss your personal situation and figure out what can be done to help. We can offer advice on how you can get out of debt. Contact our office to set up an appointment for a free consultation, it may be the best thing you do to start 2012 on the right foot.

Submitted by:

Kerry Hammond, Esq.

Yes There is Life After Bankruptcy

2012-01-19T13:44:00.000-08:00

One of the biggest concerns many people have when considering bankruptcy is whether they will be able to obtain credit again after filing. To some this may sound silly, after all credit is what got them into this situation to begin with. But obviously credit is important for various reasons. One big concern many debtors have is whether they will be able to purchase a vehicle after bankruptcy.

Surprising to many, within a few days after filing bankruptcy, most people receive dozens of offers for new credit cards and enticing offers for auto financing. Generally we advise our clients to avoid credit card offers or to open at most, one credit card account, and to limit use to emergencies and a few minor purchases, and to pay balances off quickly.

While many people are surprised that auto financing is available after bankruptcy, it actually makes sense in most cases. After a bankruptcy, the only debts that may remain are typically mortgage debts (if a debtor chose to retain their home). The individual with a "fresh start" only has income which hopefully covers necessary living expenses. After a chapter 7 bankruptcy, the debtor cannot file chapter 7 again for eight years and the typical debtor in bankruptcy hopes to never file again. So in most cases someone who has filed bankruptcy may be considered a low credit risk.

When determining where to go to obtain an auto loan, it may be beneficial to ask your bankruptcy attorney for a referral. Offers in the mail may sound good on paper but may not be the best option. Bankruptcy attorneys have numerous clients who need financing while in chapter 13 and after chapter 7 and may be able to connect you to lenders who understand bankruptcy and want to assist in improving your credit. By obtaining new auto financing, and making timely monthly payments, not only do you get to drive a new car, you are starting to rebuild your credit.

For more information on bankruptcy and financing vehicles before or after bankruptcy contact Greenwald & Hammond.

Submitted by:

Mindy Greenwald, Esq.

How to Retire Without a Mortgage

2012-01-18T19:18:00.000-08:00

Retirement, and living off of Social Security and a pension, is hard these days. Not only have our 401k accounts been hit by stock market fluctuations, but cost of living increases and account balance decreases have made it hard to imagine retiring. When you add to that the fact that your “cost” of living includes a mortgage payment, it can be downright impossible.

I recently read a Kiplinger article entitled “6 Ways toRetire Without a Mortgage” and found it very interesting. Not all of the six ways work for everyone, but in my opinion it passes the nugget rule. What is the nugget rule you ask? If an article provides me a nugget of information or sparks a helpful thought, it’s worth the read. (As you can see, it has no relation to the Denver Nuggets, sorry sports fans.) Here is a quick guide to the ideas that I found to be most useful:

Make an Extra Mortgage Payment

It’s amazing how just one extra mortgage payment a year can cut down on not only the interest you will pay over the term of your loan, but the number of years it will take to pay it off. You don’t have to do it all at once, either. If your mortgage is $1200 a month, add $100 to each payment. If it’s $2400 each month, add $200. If you get in the habit of doing this and adjust your budget for it, it will seem like that was your payment all along and you won’t even notice the difference.

Refinance

I hear so much about the low interest rates people are getting these days, so this may be an option for some. If you’re trying to pay the mortgage off before you retire, however, be careful not to get a lower monthly payment by refinancing for a longer term than you currently have. Maybe you can even refinance to a lower interest rate in order to reduce your term, rather than reduce your monthly payment. I’m not sure what the banks are offering, but it can’t hurt to ask.

Downsize

If you have enough equity in your home, you may be able to sell your current home and buy a smaller one for cash. Or, if you don’t quite have that much equity, you may be able to put a large down payment on a smaller, cheaper home and be paying on a smaller, shorter term loan. This may allow you to prepare to pay your mortgage off by the time you retire.

Rent

I’m a big fan of renting, so you won’t hear a lot of downsides to the idea from me. When something breaks, I don’t have to pay to fix it. When the taxes or HOA fees are due, I’m not the one that pays them. When you near retirement, the big risk is running out of money to pay rent. But if you enter retirement with a mortgage, aren’t you facing the same risk? Of course, when you rent, you don’t have anything you can sell to get at your equity.

It’s all really a numbers game, and not every solution works for every person. You have to run the numbers, decide which option you can afford, and go with the one that works best for you. Don’t let anyone tell you that there is only a one size fits all answer.

Submitted by:

Kerry Hammond, Esq.

Can You Afford to File Bankruptcy?

2012-01-17T14:37:00.000-08:00

Today I opened up my Internet browser to an article entitled "When You're Too Poor For Bankruptcy" which I found interesting and thought provoking. In her article, Liz Weston, discusses a family whose income decreased over the past few years and as a result incurred large amounts of credit card debt (a very common situation). After consulting an attorney they felt they could not afford the costs of hiring a bankruptcy attorney and paying the court fees. The article goes on to discuss alternatives and suggests ways to come up with funds to pay an attorney.

Bankruptcy is not a one-size fits all product as some attorneys may lead you to believe. Individual circumstances vary. Attorneys fees may vary depending on individual circumstances. Interviewing several attorneys may result in a variety of different fee quotes. The cheapest attorney may not be the best for you so use your instincts when shopping around. While it may seem costly to hire a bankruptcy attorney, the product you receive should include knowledgeable advice, first rate service, and peace of mind (but remember, you get what you pay for).

In the article, the sample debtors indicated they could not afford to begin the process. There are many options available to debtors in need of bankruptcy assistance here in Colorado. First off, many bankruptcy attorneys offer free initial consultations. Our office will often accept a small portion of the total fees to begin representation (though not to actually file a case) while others may require the entire fee be paid before any work begins. Once an initial payment is made we will assist clients by communicating with collectors and creditors while they save up the remainder of the fees or make installment payments toward the fees. Often notifying a creditor that the debtor has retained bankruptcy counsel is enough to temporarily stop collection activity. This allows our clients some immediate relief by ending collection calls and sometimes even stalling collection lawsuits.

For Debtors considering filing on their own, the United States Bankruptcy Court for the District of Colorado in conjunction with the Denver Bar Association, hosts two pro se clinics each month at the courthouse. The clinics are presented by volunteer consumer bankruptcy attorneys and are open to the public. The presenting attorneys offer legal advice, some that is general, some that is very specific. After the presentation individuals are encouraged to submit questions and the attorneys typically stay to answer most, if not all questions, and will even speak one-on-one to individuals with more complex questions.

The article discusses the notion of being "judgment proof." In a free initial consultation, a well-intentioned attorney will explain and help determine if you truly are judgment proof. There may be a problem with just assuming that being judgment proof will prevent collection efforts. All too often I have met with individuals whose social security has been garnished from a bank account. Without the knowledge or assistance of an attorney many social security beneficiaries have a difficult time recovering funds improperly garnished from their bank. Many individuals whose sole income is social security may qualify for help from Colorado Legal Services, Metro Volunteer Lawyers or assistance from attorneys looking for pro bono work.

It is also important to note that bankruptcy court fees may be waived or paid in installments for individuals who qualify.

If you are not sure whether you can afford a bankruptcy attorney but you are considering bankruptcy, you may want to think "can I afford to not have a bankruptcy attorney." If you are sure that you cannot afford an attorney, spend your time wisely. Take advantage of a free consultation to explore your options and get your questions answered. Attend the pro se bankruptcy clinic at the bankruptcy court in Denver at least once, although you may attend more often. For additional questions and a free consultation please contact Greenwald & Hammond to meet with an attorney.

Submitted by:

Mindy Greenwald, Esq.

Have You Reached Retirement Age, Only to Find Out That You Can’t Afford to Retire?

2012-01-13T20:53:00.000-08:00

Lately I find myself wanting to write blog posts that deal with retirement. Part of the reason is that I am speaking to more and more people in their late 50s and 60s who are exploring their bankruptcy options. More Americans are finding themselves in one of two places; at or nearing retirement age, but realizing they are be unable to retire financially, or retired and unable to make ends meet.

For those who are at or nearing retirement, you may find yourselves unable to retire due to unsecured debt you are struggling to pay off. Even if social security and retirement accounts provide enough money to live on, trying to pay minimum payments on credit cards may put you in the negative each month.

As hopeless as this situation may seem, it is something that can helped. Even though bankruptcy may be the last thing you planned to do at retirement age, it could make the difference between being able to retire comfortably and struggling to make ends meet.

If you’re already retired and unable to pay your living expenses, you need to figure out why. If it’s due to unsecured debt or medical bills that you feel like you’ll never pay off, there may be help for you too. Many people can afford to live on social security and retirement money, but not if credit card payments take a large part of that income.

If either of these situations sounds familiar, you may need to contact a professional to find out what can be done to help you achieve retirement. Speaking to a bankruptcy attorney doesn’t mean you have to file bankruptcy, it just means that you are exploring your options. Bankruptcy doesn’t work for everyone. Find out for yourself if it may work for you. Contact Greenwald& Hammond for a free consultation and learn more.

Submitted by:

Kerry Hammond, Esq.

Student Loan Debt and Bankruptcy

2012-01-12T12:26:00.000-08:00

It may be common knowledge that student loans are not dischargeable in a bankruptcy, but this doesn’t mean that you should immediately remove the option of filing bankruptcy from the table. There are many circumstances when filing is still a benefit to you, and can even allow you to get back on track with your student loans.

In a large percentage of the bankruptcy cases we file at Greenwald & Hammond, there is student loan debt. The amounts we see range from a few thousand, to numbers that contain six figures. In both of these cases, this student loan debt is non-dischargeable, but we find that our clients can still benefit from a bankruptcy filing.

The reason for this benefit is the simple fact that for a lot of people with student loans, this is not the only debt they are facing. They are also struggling with credit card debt, medical bills, mortgage arrears, or all of the above. Paying minimum payments to credit cards and trying to get on top of medical debt can put the student loan payments to the bottom of the list.

People continue to pay credit card minimums in order to keep the credit card active. They pay medical bills because they may still need to see the doctor. But student loans are old news, many of us have been out of school for years before the payback becomes an issue, thanks to deferments and forbearance periods. Because of this, a lot of people think that these debts will be more lenient and easier to put off until more money is available.

Don’t be fooled, though. Student loan debt can go into collection just like any other unsecured debt. The collection agencies often hire attorneys to take you to court, get a judgment against you, and garnish bank accounts and/or your paycheck.

When your unsecured debt is causing you to have no money left over for your student loans, something may need to be done. Filing for a chapter 7 bankruptcy, and discharging the rest of your unsecured debt, allows you to clear your plate of minimum payments and concentrate on paying back your student loans.

If you find yourself in a chapter 13 bankruptcy making plan payments to the trustee, and these payments pay a portion of your unsecured debt, there’s an upside. Remember that your student loans are part of that unsecured group of debts. They will share with the other creditors in that group, so you may end up paying for debt that you need to pay anyway.

If you find yourself falling behind on student loan payments due to other debt, it may be time to contact a bankruptcy attorney to see if something can be done. At Greenwald & Hammond, we offer a free initial consultation and have office hours to fit your schedule.

Submitted by:

Kerry Hammond, Esq.

Paying Back Friends and Family Before Bankruptcy May Feel Good to You but Could be Bad For Them

2012-01-10T19:24:00.000-08:00

Individuals that have been teetering on the verge of bankruptcy for long periods of time, often borrow money from their loved ones, in attempts to stay out of bankruptcy or just to get by. When the decision finally comes to file bankruptcy a debtor typically stops making payment on credit cards and secured on items they don’t intend to keep. For anyone with a paycheck, this will result in having money to attribute to other expenses.

For many the freed up money means a much needed trip to the dentist, a car repair they had been putting off, or even a 401K contribution. In most instances such spending prior to filing a bankruptcy is justifiable and likely will not cause problems.

For some, there is an understandably strong desire to pay back personal debt owed to close friends and family members. Believe it or not, paying debt owed to friends or family in the year prior to filing bankruptcy can cause problems for those you paid. If a bankruptcy is filed, a close friend or family member is typically considered an insider. The trustee in a chapter 7 bankruptcy can avoid any payments made to insiders in the year prior to filing the case. A trustee in such a case will likely seek to recover any amounts paid to an insider (unless the amount paid was nominal). The sad result is that your mom (or other family member) will receive a not-so-friendly letter that threatens legal action if the money paid to her is not returned to the trustee by a certain deadline.

Debtors without attorneys often make the mistake of payingback family members large sums of money with their tax refunds just prior to filing bankruptcy. They were slick enough to determine that they needed to receive and spend their refund to avoid turnover, however they did not consult an attorney to determine the various acceptable ways to spend the money. Not only do they wind up without the money but they also wind up with a very unhappy family member.

If contemplating bankruptcy, there are so many things to consider. There are so many pitfalls that debtors can encounter. Most people are completely unaware that paying back certain types of debt could create additional hardship. It is important to consult with a knowledgeable attorney when making financial decisions. At Greenwald & Hammond bankruptcy is our only practice area. This allows us to remain focused on the laws affecting our clients. Contact us today for a free consultation.

Submitted by:

Mindy Greenwald

Can I File Bankruptcy on Only Some of My Debts?

2012-01-09T09:40:00.000-08:00

Many people feel a certain attachment to one of their credit cards. Maybe it is just the idea that they have a credit card or maybe it is a certain bank that they feel a loyalty to, but some people just do not want to part with all of their creditors. In bankruptcy it is an all or nothing proposition.

When you file a bankruptcy, you are required to list all creditors on your bankruptcy petition. Whether they are unsecured or secured, every creditor must be listed and notified of your bankruptcy. This means that if your bank account is overdrawn, you must list your bank. If you owe money for your car or home, you must list them.

With a secured creditor, such as your mortgage or car loan you can make a decision as to whether you wish to keep the collateral. If you decide you want to keep the collateral for a secured debt, then you must continue to make your payments.

For credit cards you cannot pick and choose which ones you want to keep and which you want to go away. Creditors will cancel your account in most cases even if you decide to make post-petition payments. Even if you fail to list a credit card, the creditor is likely to discover your bankruptcy and cancel your account.

Some banks will close your account too. When preparing to file bankruptcy it is advisable to bank where you do not owe money. Depositing money into a bank that you owed money to on the date of filing can have negative consequences. Some banks have been known to freeze accounts and use a one-time setoff by applying deposited funds to debt that otherwise would be discharged.

For those who are attached to the idea of having a credit card, please do not worry. Almost anyone who has filed bankruptcy will tell you that their mailbox was full of offers for new credit cards almost immediately after filing bankruptcy. For anyone who is attached to one specific credit card or bank, it is also good to know that some creditors and banks are willing to work with you if your overdraft was minimal and you reaffirm a portion of it, though as a bankruptcy attorney I never advise this route.

If you are considering bankruptcy, get all the facts from an experienced attorney at Greenwald & Hammond. We offer a free consultation.

Submitted by:

Mindy Greenwald

The Business of Real Estate Investing

2012-01-06T20:35:00.000-08:00

In previous blog posts, we’ve discussed filing bankruptcy to discharge business debt. You may have started a business, leased an office, and even hired an employee, only to find out that you couldn’t make the business work. Bankruptcy can help people who personally guaranteed the debts of a failed business. It can help you move on by discharging your liability to these debts, as well as many personal ones you may have incurred while you tried to get the business off the ground.

When real estate was a better investment, a lot of people purchased properties, updated them, and then filled them with tenants. Some zealous investors even bought several properties, figuring that the rental income would easily cover the mortgage, with even a little to spare for the occasional repair, and the investment would take care of itself. These people basically started a rental property business.

This plan wasn’t a bad plan and actually worked out well for a lot of people, for awhile. Unfortunately, when the real estate market started to decline, these investors found themselves owing $200,000 on a house that was all of the sudden worth $150,000 or less. Add to that the rising unemployment rates, not necessarily affecting the landlord but possibly affecting the tenants, and the problems increase. Tenants who were having no problem making their rent while employed were finding themselves unable to pay and moving out due to the loss of a job or a pay cut.

So now you own a property with a $200,000 mortgage, that’s worth $150,000, and it’s now vacant. You not only have to cover the mortgage on the house where you reside, but you are having to cover the mortgage on an empty rental property, as well as the utilities. If you have more than one rental property, this can quickly spiral out of control and cause you to fall behind on mortgages, forcing the banks to start foreclosure proceedings.

If you find that you need to get out from under a rental property, or several rental properties, bankruptcy may be something you need to explore. Oftentimes, selling the properties to pay off the mortgages isn’t an option because of the current property value. Bankruptcy laws allow you to surrender these properties in a bankruptcy, in essence giving them back to the bank and starting over.

The good news is, it’s not an all or nothing transaction. If you can afford to, you may choose keep the property you use as your residence and only surrender the rental properties. Filing bankruptcy doesn’t mean you have to give up your home or your belongings. There may be some factors that need to be considered, as each situation is unique, so speaking to a bankruptcy attorney would be a good place to start. Find out what can be done to get out from under real estate investments that haven’t worked out the way you’d hoped.

Contact Greenwald & Hammond to set up a free consultation with a bankruptcy attorney.

Submitted by:

Kerry Hammond, Esq.

Non-Exempt Assets: Can I Give Them to My Brother?

2012-01-05T11:19:00.000-08:00

Bankruptcy relief, in one form or another, has been around since biblical times, maybe longer. In modern times, there are strict guidelines that govern our system of bankruptcy. The bankruptcy code and court rules are voluminous and make for some fun bedtime reading. The code anticipates much of what individuals have tried to do over centuries to avoid paying their creditors.

While some debtors have little or no assets to speak of, many have assets that may or may not be exempt under the bankruptcy code or under state law. In Colorado, state law determines the exemptions that can be claimed to protect assets in a bankruptcy. Colorado's bankruptcy exemptions are somewhat generous compared to those of some states and lacking compared to those of other states.

"Why not file in a state with better exemptions" is something that debtors have considered. There are residential requirements in each state that determine whether a debtor may claim that states exemptions, some states may require a debtor to reside in the state for longer than two years to declare the exemptions of that state, so a debtor who lives in one state may be required to claim exemptions of their previous home state or use the federal exemptions.

A bigger problem is debtors who think they can be sneaky and give away assets to friends or family members for little or no money. Every bankruptcy attorney has had a consultation that went something like this:

Attorney: oh so you own your BMW free and clear and it has a blue book value of $22,000?
Debtor: yes
Attorney: well in your case, you can only claim an exemption on that vehicle of $5,000 therefore you may have to turn the car over to the trustee for liquidation if you want to go forward with a chapter 7 bankruptcy
Debtor: how about I change the title over to my father(or insert any friend or family member here)?

The debtor usually thinks that he/she is the first one who ever considered this as an option. Obviously a bigger problem is a potential debtor who transfers title without first talking to an attorney, or actually filed a case without an attorney after doing something like this.

As previously mentioned, bankruptcy protection, as it exists today, has anticipated this line of thinking as well as many, much more creative, attempts to conceal assets. The bankruptcy code allows the chapter 7 trustee to look back at least one year, and in Colorado, at least four years, from the date of filing to determine whether an asset was "fraudulently transferred" and allows the trustee to avoid any such transfer. So Debtor in the above scenario would have lost the car completely, and would have also lost his $5000 exemption if the asset was transferred to Dad without Dad paying fair market value for the vehicle. Keep in mind that the term "fraudulent transfer" does not require any actual fraud be proven, it simply requires the transfer of a valuable asset to have occurred without the exchange of value, within the avoidance period.

At my first law job as an attorney, the attorney I worked for told me, "if you can think of it, someone else thought of it before you." (My law partner also says that, which just goes to show that my first employer didn't come up with that on his own) The bankruptcy code anticipates pretty much any scheme one can think of to alleviate themselves of valuable assets to avoid turning them over for liquidation. Purposely failing to disclose assets on your bankruptcy schedules can result in punishments such as denial of discharge and as severe as time served in federal prison. One may think that the trustee couldn't find out but one never knows who the trustee may be or who the creditors may be.

Hopefully you have learned that the answer is "NO" you cannot give it to your brother. When there are assets at stake, speaking to an experienced bankruptcy attorney may help to determine legal and ethical ways to protect the asset. An attorney may be able to guide you to a solution in which the asset may be used for your own benefit rather than lost in a bankruptcy. Contact the experienced attorneys at Greenwald & Hammond for a free bankruptcy consultation.

Submitted by:

Mindy Greenwald

You May Not Be Unemployed, But Are You UnderEmployed?

2012-01-03T17:30:00.000-08:00

When you are unemployed, you are earning no wages whatsoever. You are not receiving a paycheck, company offered health insurance, or contributing to your retirement. However, you also are not paying for gas or bus fare to commute to work, putting wear and tear on your car, and spending additional grocery money on food you can take with you in a lunch bag or eating out with co-workers. You may even be collecting unemployment benefits, which is just a fraction of your previous paycheck, but can go a long way to paying the rent and utilities. You are free to spend your day searching for a job and sending out resumes in your field.

As frustrating as the above scenario may seem, it may be more attractive than what many other Americans are experiencing, which is underemployment. Many people are working 40+ hours a week, and making so little per hour that they are barely scraping by. These people find themselves in a vicious circle. They have to spend money on all of the work related expenses mentioned above (gas, bus fare, food) but the costs of these things can sometimes be a large percentage of the wages they bring home. They may even be in a job that does not offer health insurance benefits, and most are making too little to even think of contributing to a 401k.

Add to this the fact that they are working full time for these wages, and sometimes overtime as well. Spending 40 or more hours at a job, and then trying to take care of your family, leaves little or no time or energy to search for a higher paying position to get out of the cycle you’re in.

Making enough money to pay the necessary bills (rent, mortgage, utilities) is the first hurdle. But if you have a high amount of credit card or medical debt, trying to make these minimum payments in addition to the necessities can seem impossible.

Filing for bankruptcy and discharging much, if not all, of your unsecured debt can be a help in either situation. It can eliminate the minimum payments on credit cards and medical debts so that you have enough to pay the necessary expenses to keep a roof over your head and food on the table. Whether you are unemployed or underemployed, you may need to rid yourself of unsecured debt in order to make ends meet. You may need to speak to a bankruptcy attorney.

At Greenwald & Hammond, we offer a free consultation and will analyze your specific circumstances and let you know how bankruptcy may help you. Call now to set up an appointment to speak with an attorney.

Submitted by:

Kerry Hammond, Esq.

Medical Debt Bankruptcy

2012-01-02T21:42:00.000-08:00

When most people think of bankruptcy, they think of people who have significant credit card debt. This is not always the case. Medical debt can be a real problem for people living responisbly within their means. Medical debt is the primary cause of a significant number of individual bankruptcy filings.

Even with adequate medical insurance, an unexpected illness or injury can result in lost wages and higher than expected medical bills.  Many people cannot afford the high costs of medical care and avoid seeking routine medical and dental care to minimize costs. When an emergency arises there is nothing in the budget to cover the expenses.

Many hospitals and medical providers employ independent billing services to collect their fees. Third party billing companies are completely removed from the patients' circumstances and are rather unsympathetic to the patients' inability to pay their bills. If you've been in a hospital lately you may remember receving your resultant medical bills almost immediately upon discharge.  Unpaid medical debt typically gets turned over to collection agencies rather quickly, and in most cases the collectors are completely unsympathetic.

Fortunately medical debt is included in a bankruptcy discharge. Along with most unsecured debt, medical debt is discharged in bankruptcy. The protection of bankruptcy is often just what people with medical debt may need to fully recover from a medical event.

Clients are often concerned about being refused ongoing treatment by their doctors or dentists.  While some providers may be inclined to discontiune treatments, I often tell my clients to advise their provider that they are filing bankrutpcy and that their attorney advised them that they must include the debt in the bankruptcy. Many will work something out with the patient.

If you are suffering from medical debt, filing for bankruptcy may help you recover.

Call Greenwald & Hammond to set up a free bankruptcy consultation and learn more about medical bankruptcy.

Submitted by:
Mindy Greenwald, Esq.

A New Way to look at Retirement

2011-12-30T17:07:00.000-08:00

Many Americans have entered their “golden years” only to find that they’re not so golden. People who planned to retire at 65 are realizing that they will have to continue working in order to afford to live. Not only has the stock market decline greatly reduced their retirement accounts, but the housing prices have caused their little real estate nest egg to be worth a whole lot less.

If you’re in your 30s, 40s or even 50s, you may think that you have plenty of time to save for retirement. It always seems like such a long way off, but putting off saving now can cause devastating results. Results that only become obvious when it’s too late.

The first question to ask yourself is why am I not saving for my retirement? The majority of us will have one of two answers (or possibly both). 1) You are not making enough to pay for living expenses due to a decrease in wages or job loss, or 2) You make enough to pay your living expenses, but any additional money you make is quickly used up on minimum payments to credit cards and other unsecured debt. Minimum payments that, if never increased, will cause it to take you decades to pay off the debt. And if you continue to use that credit card, this pushes the decades to virtually never.

If you fall into the first category, you may need to re-budget and come up with ways to lower your living expenses so that you can afford to live off of what you are bringing in. If your mortgage and/or car payment is part of the problem, you may need to look into ways to lower those monthly payments. Refinancing your home is an option, but there are many pitfalls involved and banks are offering this option less and less. You can try to trade in your car to get a cheaper model with a lower payment, but this may not be enough to reduce your monthly expenses.

If you’re not saving for retirement because of minimum payments on credit cards and other unsecured debts, you may also need to work to reduce your monthly expenses to allow you more money for these payments. However, this may either not be an option, or not be enough.

As extreme as it may sound, you may find that you need to give up your home or car. If this is the case, looking into bankruptcy is a must. Filing for bankruptcy allows you to surrender your house, car, or both. It also allows you to discharge unsecured debt, getting rid of the minimum payments that are getting you nowhere. It’s a smart move to talk to a bankruptcy attorney before you start to get overwhelmed by your debt so that you can find out what your options are.

Getting rid of the debts that are putting you behind each month, and coming up with a livable budget, may just allow you to start savingfor your golden years. When retirement finally comes around, you’ll be happy that you did.

Contact Greenwald & Hammond today to schedule a free consultation with a bankruptcy attorney.

Submitted by:

Kerry Hammond. Esq.

Are Finances the Strain on Your Marriage?

2011-12-29T15:42:00.000-08:00

Many lawyers will tell you, "Bankruptcy and Divorce go hand in hand." While financial trouble may not be the cause of all divorces, debt and financial troubles can certainly put a strain a marriage.  When finances are tight, individuals may have differing needs and wish to use limited resources for different purposes.  When one party is the primary bread winner the other may feel powerless and out of control.  Fights often stem from decisions about spending. People often indicate that finances were a big stress on their marriage.

As bankruptcy attorneys we have seen many couples who are feeling suffocated by their debt but have found that filing for bankruptcy may have saved their marriage. In many instances a husband and wife cannot even on whether or not to meet with an attorney to find out their options. Some are resistant to even discuss the matter amongst themselves. A bankruptcy can eliminate the crushing debt that may be driving the parties apart.

In some instances, a marriage may not be saved by bankruptcy, but the issue of who will assume responsibility oft the marital debt can be resolved. When filing for divorce, a couple must determine the distribution of their marital property as well as the distribution of the marital debt. Unfortunately the order of a divorce court, while enforceable against the parties to the divorce, is probably not enforceable against an unpaid creditor. Therefore if a former spouse fails to pay creditor for the debt that was jointly incurred, creditor may seek recovery of the debt from the spouse that was "not responsible" for the debt under the divorce decree. This can result in additional costs such as paying an attorney to assist in enforcing the divorce agreement or orders.

Often my advice to individual bankruptcy candidates who are contemplating getting divorced with lots of marital debt is, "file bankruptcy together, even if it is the last thing that you two ever do together." Filing together can save on attorney's fees, court fees and can ensure that both parties are relieved of the marital debt. If the divorce occurs first then each must file their own bankruptcy and it will surely cost more. If after a divorce, one party files and the other does not, the party that does not file may wind up responsible for most, if not all of the joint debt.

There are some instances where the parties are better off filing separately once the parties are separated or after a divorce is final. In some cases the parties may not pass the means test and therefore do not qualify for a chapter 7. While the marital debt may be overwhelming, the couple may not want to be "stuck together" in a chapter 13 for three to five years. In such cases waiting to file might be beneficial. Also when the incomes are not combined, the parties may each separately pass the means test and qualify for a chapter 7 filing.

If your marriage is drowning in debt, don't try to resolve the issues alone.  An experienced bankruptcy counselor at Greenwald & Hammond may be able to guide you and your spouse to a "fresh start" financially. Who knows, perhaps eliminating debt can allow you to focus on the things you really like about each other. Alternatively, if you are considering divorce and drowning in debt, consult with a bankruptcy attorney to determine whether filing together is the best option.

Submitted by:

Mindy Greenwald, Esq.

Can You Afford to Hire a Bankruptcy Attorney?

2011-12-27T20:15:00.000-08:00

I think the better question is: can you afford to NOT hire a bankruptcy attorney? When a person chooses to represent him or herself in a court action, they are acting pro se, or on their own behalf. Many people would never dream of trying to repair their own furnace when it breaks, but when it comes to navigating the ins and outs of a complicated legal proceeding, they think they can do it on their own.

We’ve heard a lot about the downside of hiring an attorney (along with many amusing lawyer jokes). We are warned by friends and family that attorneys will overcharge, take advantage, never return our calls, etc. What people don’t talk about are the dangers of not hiring an attorney, especially in areas of law where there is so much at stake.

For most, deciding to file bankruptcy is an emotional decision, one that takes time and much deliberation. Although finally deciding to file may make you think you’ve jumped the highest hurdle, don’t get fooled. Bankruptcy law is very complicated, and can frustrate and overcome even lawyers who attempt to dabble in it. Not hiring an experienced attorney can end up costing you more than you would have paid had you hired one.

One of the most common mistakes people make when deciding to file pro se is not knowing how to protect their assets. The exemptions allowed by law represent the property that the court feels should be safe from your creditors, property each debtor needs to keep in order to move on and get a fresh start. Many people have property that may not be covered by these exemptions and without a knowledgeable attorney, this property may be seized by the trustee and sold for the benefit of your creditors.

Another important factor involved is dischargeable versus non-dischargeable debt. Deciding to file bankruptcy to rid yourself of your unsecured debt may seem like a great idea. But after you’ve gone to the time and trouble, and paid a hefty filing fee to the court, finding out that much of your debt is non-dischargeable isn’t helpful. If a debt is non-dischargeable, it does not go away after the bankruptcy is over. An experienced attorney can explain which of your debts are dischargeable and which you will still be responsible for after your bankruptcy discharge.

These and many other factors make it important to at least consult with an attorney prior to going it alone. If it sounds like I’m trying to scare you into talking to an attorney, you’ve gotten my message. Debtors’ attorneys, like those at Greenwald & Hammond, don’t like to see the trustee take assets. Our firm takes pride in giving our clients the best possible service, while keeping their assets safe.

You’re doing yourself a disservice if you don’t at least talk to a bankruptcy attorney first. Many offer a free consultation and can let you know if you have any assets or debts that may make filing bankruptcy not in your best interest. Paying for an attorney up front can save you money in the long run. Read Mindy Greenwald’s blog, offering advice on how many people afford to pay an attorney.

Contact Greenwald & Hammond to set up an appointment for a free consultation with a bankruptcy attorney. Be smart about your fresh start.

Submitted by:

Kerry Hammond, Esq.

Chapter 7 Gives Many a Fresh Start

2011-12-26T20:31:00.000-08:00

You may have heard the term "fresh start" in the context of bankruptcy before, but have you wondered "how can that be?" After all, many people think that Bankruptcy means financial devastation and filing will destroy your credit. In most cases this is not accurate, in fact bankruptcy often provides individuals with a "fresh start" and a new beginning with creditors.

Most individuals in need of filing bankruptcy probably had good credit at one point in time. Often times at an initial consultation, potential clients will tell me how good their credit is, though often times they mean how good it was. By the time people come to meet with a bankruptcy attorney, they are struggling with their debt and may have missed payments on existing debts.

Once a payment is missed on a credit card, mortgage, car loan, or even a student loan, credit ratings will begin to suffer. Missed payments that are not quickly resolved with the creditor, will result in repeated negative reporting on your credit. The negative reports on you credit remain on your credit report for seven years and can often times result in denial of credit especially for larger purchases like a home or car.

In addition to negative reporting, lenders consider your debt to income ratio. If debt is so high that it would appear income, though good, is insufficient to keep up with the existing debt or additional debt, creditors may deny credit.

When bankruptcy is used to eliminate debt, it will appear on a credit report. In most instances, this may not result in the ding that most people expect. While there is no guarantee that the filing will result in a boost in credit score, many experience the ability to obtain credit very shortly after bankruptcy. The elimination of the debt and the cleaning up of a credit report can truly help people to move forward.

When some one's debt is so out of hand that judgments, garnishments and repossessions are marring their credit, a bankruptcy filing may be viewed as finally taking the responsible step necessary to begin anew. Chapter 7 will eliminate most debts. A payment plan in a chapter 13 will demonstrate responsibility and show creditors that a budget can be maintained. Without overwhelming debt, people with all levels of income can experience the relief a of a fresh start.

Call Greenwald and Hammond today for more information on how we can assist you with overwhelming debt.

Submitted by:
Mindy Greenwald, Esq.

Bankruptcy Filing Numbers Are Down

2011-12-23T13:01:00.000-08:00

According to a Colorado Division of Housing report, the number of case filings for November 2011 is 10.7% less than the cases filed in November 2010. Not only that, but it’s the 10^th month in a row that this year’s monthly numbers have been lower than last year’s.

Statistics rarely contain enough data do show the exact reasons behind their numbers. We are often left to speculate on economic events that may be the cause. In this case, at least on the surface, we can hope that many consumers have seen an improvement in their financial situation. They have been able to get back on track without the need to file bankruptcy. The reason for this improvement may be that the economy is beginning to show the turn around we’ve heard so much about.

What can be frustrating is when we see statistics that clearly show an overall national or regional financial improvement, yet we don’t personally experience this progress. For example, people who are still unemployed don’t feel relief when they read that the local unemployment rate is declining.

It’s important to look at these trends and see them for what they are, trends. Use them as a guideline to feel hopeful that times are turning around, at least on a big picture level. But we still need to view our own personal situations on an individual level and decide the best course of action for ourselves. If you’re still experiencing financial problems, causing you to fall behind on your monthly bills, keep your options open. You may need to speak to a bankruptcy attorney in order to clearly understand if it’s something you should consider. A free consultation allows you to get the information you need without putting a further burden on your wallet.

Call Greenwald & Hammond today to set up an appointment to speak directly with an attorney.

Submitted by:

Kerry Hammond, Esq.

New Years Resolution - Get out of Debt and Start Saving

2011-12-22T08:24:00.000-08:00

With 2012 quickly approaching, are you thinking it is time to start saving for the future? Maybe you are finding it impossible to save for the future because your living paycheck-check-to-paycheck. Maybe you have more bills than you can afford to pay, maybe you can afford to pay the minimum but must then use a credit card to get through the month. How can you save for your future when you can barely afford the present?

Many think that people with debt are just irresponsible with credit cards, of course this is the case in some circumstances. However many individuals and businesses wind up in debt because of changed circumstances. Medical debt resulting from a sick family member with inadequate medical insurance, additional costs due to the addition of a child or other dependent to the household, a job loss, wage cut or an employer unable to issue that "annual bonus", an increase in mortgage payments on that mortgage you were promised you would be able to refinance before the payments went up, or that house that cannot be sold for what you owe, loss of clientele due to the bad economy. These are just a few examples of situations that get people in trouble.

While unmanageable debt can be the result of many situations, there are few solutions to getting out of debt. Debt consolidation may work in very limited cases but individuals should be weary because debt consolidation companies are generally in business to make money. If going this route you must seek out a non-profit who will honestly assess your situation and advise you as to whether consolidation will work for you.

Debt settlement is another option. If you have some cash on hand, creditors may be willing to take one-time lump-sum settlement offers, however withdrawing money from an IRA or 401K to settle debt is almost never a good idea. Also most will not take an offer until you are missing payments. Remember you will pay an early withdrawal penalty in addition to paying taxes for the early withdrawal. If hiring an attorney or other "specialist" you will also be expected to pay a fee, often times as much as thirty percent of the amount you are forgiven. You may also receive a form 1099 from the creditor resulting in the debt forgiven being reported to the IRS as income and now taxable as such.

Bankruptcy is not a last resort. Many people will say it is, but many who are in debt over their heads, have taken a responsible step to eliminate the debt that is preventing them from saving for the future. Bankruptcy for many is labelled an embarrassment, shameful, and even against their core beliefs. While incurring debt with no intention of paying the debt is shameful and against my core values, and should be against every one's core values, bankruptcy was not instituted by the federal government to encourage people to irresponsibly charge up credit cards and incur debts. The bankruptcy code has been in place because many people make mistakes, fall on hard times, and need a fresh start. Without the help that bankruptcy provides many find no hope of ever finding their head above water.

Whether debt consolidation, settlement or bankruptcy is your best option, thought should be given to how soon you will be out of debt and when you can begin saving for your future. Often with my clients, I discuss current budget and try to show instances where cutting back is possible. Without focusing on how you spend your money, you may not realize how you can save your money. It is important to come up with a strategy for saving for the future.

If bankruptcy is a consideration or if you just want to know you options, Greenwald and Hammond offers free attorney consultations to assess your situation and give you the correct information you need to make a decision about getting out of debt for good. Call our office to book your appointment today.

Submitted by:

Mindy Greenwald, Esq.

Don’t Be Afraid to Ask For Help

2011-12-20T06:51:00.000-08:00

Before you let your bills pile up, take some time to set up a monthly budget. Sometimes just knowing what you’re spending your money on can help you determine where you may need to cut back, or cut out. If you’re going through a rough patch, remember to ask for help.

If you have an hourly job, one that doesn’t guarantee a set number of hours, you may find yourself short of money during the slow months. This can quickly spiral out of control and cause you to fall so far behind that you can’t catch up. When this happens, you need to prioritize your bills and come up with a plan that allows you a little wiggle room. Consider contacting the people you owe: landlord, phone company, electric company. Sometimes companies will work with you if you make the effort to let them know what you can afford to pay now and how you plan to catch up on the rest. The bottom line is, it doesn’t hurt to ask.

Living off credit cards can be dangerous for many reasons. We tend to spend more than we normally would because it’s so easy to swipe a piece of plastic and pay later. Sometimes balances can get so high that we can only afford the minimum payment, a payment that will go mostly to interest charges and leave you with an ever growing balance. In addition, miss one payment and you’re hit with a late fee that can be anywhere from $25-$40. Before you start experiencing this, and before you start to damage your credit, give your credit card company a call to see if they can reduce your interest rate or put you in a card that has a lower rate. Again, it doesn’t hurt to ask. If you still have good credit, they may work with you to keep your business.

If you find that you still can’t make ends meet, you may want to seek legal help. Consider speaking to a bankruptcy attorney to find out whether this may be an option for you. Sometimes getting out from under credit card debt and living off of your wages, without having to pay all those minimum payments, is all that you need to get back on your feet. You may find that bankruptcy isn’t an option for you, but it doesn’t hurt to ask.

Submitted by:

Kerry Hammond, Esq.

Be Wary of Low Fees for Bankruptcy

2011-12-19T11:30:00.000-08:00

If you are one of the many people considering bankruptcy, you probably are worried about the cost of hiring an attorney to assist with your bankruptcy. Many people skimp when hiring bankruptcy help. This could be a costly mistake. There are a surprising number of people out there looking to take advantage of individuals in need of bankruptcy assistance.

If you run a google search for bankruptcy attorneys you will find at the top of your search several attorneys who promise extremely low fees for bankruptcy. Beware of such offers. In many cases this could be a "bait and switch" tactic, though not permissible under rules governing attorneys. The attorney will get you into their office and then nickel and dime you until you have paid significantly more than you expected. Alternatively, you may pay a low fee to retain the office but be provided with sub-par services. Many of these low-fee offices are considered "Bankruptcy Mills." They take small fees and offer very little personal attention to your case. In many instances you may never even meet an attorney prior to filing your case.

Even worse, your search may result in the discovery of a bankruptcy petition preparer. While some petition preparers are charging appropriate fees for the service that they provide, many are taking advantage of individuals lack of familiarity with bankruptcy. A petition preparer is only permitted to type up a bankruptcy petition, meaning they may type up your petition for you but you must provide all the information and select the proper exemptions where applicable. Many petition prepares walk a fine line between paralegal and the unauthorized practice of law. A preparer is not permitted to give any legal advice. That means they cannot tell you if you qualify for chapter 7 or chapter 13. They cannot tell you whether your vehicle or your home is exempt, they cannot educate you on the law and they cannot tell you the specific grounds for exemptions that you must state in your bankruptcy petition. Be very wary of a preparer that offers to do anything more than type your petition.

Recently in Colorado several bankruptcy petition preparers have been ordered to return certain fees paid to them and have been heavily fined by the Bankruptcy Court for overcharging for the service of preparing a bankruptcy petition. Others have been found to be collecting fees for services they are not allowed to provide.

When hiring an attorney or other bankruptcy assistance it is really important to remember the old adage "you get what you pay for." A reputable attorney will have several years of bankruptcy experience and will charge a comparable fee to other bankruptcy attorneys. Many reputable attorneys will offer lower fees when a case presented is clearly going to be less complicated and it is clear that the debtor has little or no resources to pay a full fee. The choice to file for bankruptcy is an important legal decision and really should only be made after considering the advice of someone who understands the law and can spend the time to properly explain to you the law and how it will affect you.

Unfortunately, all too many times I have been sitting at chapter 7 creditor meetings and watched as a debtor with an inexperienced attorney or no attorney at all, painfully learns that they will be losing assets with values that far exceed the fees that my office charges. In many of these cases, I could have prevented most if not all of the turnover prior to filing. Once a case is filed, it is extremely hard to undo the filing especially when valuable assets are at stake. In many cases paying for an attorney ahead of time can save lots of money in the long run.

In a previous post I discussed how fees are paid and mentioned that once you stop paying all unsecured creditors, there is usually some money available for a payment plan to an attorney. I also mentioned here that many reputable attorneys will, on occasion offer a significantly lower fee under certain circumstances.

Our firm prides itself on the one-on-one time spent in each case. This gives us the time to discover any issues that could result in problems when filing bankruptcy. When you don't get to meet with an attorney or spend any significant time with an attorney until after you file, there is no way for you or the attorney to recognize the important issues that may need to be addressed prior to filing.

So if you are considering bankruptcy, do not let the idea of paying attorney's fees dissuade you from seeking real legal advice. Do not let price dictate the attorney you choose. If you shop around and you find that you had a favorite attorney that you felt the most comfortable with, but charged a little more, don't be afraid to ask if that attorney can slightly lower their fee. They may not be able to match the lower fees offered elsewhere but remember that there is a reason you felt better with that attorney, you may have trusted that attorney or received more answers to your questions. Remember that the attorney fee may be a small price to pay to get out from all or most of the debt you currently have!

If you or someone you know is considering bankruptcy, please contact Greenwald & Hammond today to discuss options and set up a free consultation.

Submitted by:

Mindy Greenwald

How to Avoid Overspending During the Holidays

2011-12-16T20:57:00.000-08:00

I am always reading articles telling me how to save money and spend less. I think that if I read enough of them, the messages will be absorbed into my brain, changing my way of thinking. As I read these articles, I’m not looking for ground breaking tips or new and innovative ideas. I’m looking for reinforcement of the simple, easy steps that have been saving smart people money for years. I recently came across an article entitled “6 Steps to Skirting Holiday Debt” and found that many of the tips spoke to me, so I thought I would pass them on (with my own personal spin, of course).

Take ALL Expenses Into Account

I have to admit, this one never occurred to me. I always keep track of how much I spend on gifts for each person on my list, but rarely do I write down what I spend on the bottle of wine I take to the party, the new sweater I buy to wear to the party, or the quick lunch I get at the mall while shopping for gifts. These things add up quickly, and greatly increase the amount of money you’re already spending for the holidays. Make sure you track these items, and if need be, scale down on gifts to compensate. Or better yet, avoid these extra categories as much as you can. Wear a sweater you already own, and eat a snack before you leave the house so you don’t need to get a pretzel at the mall.

Shop Early

This one isn’t going to save you any money this year, but can help you plan for 2012. Make your Christmas list early and then shop all year round. You can really save a lot of money. If Aunt Lucy collects porcelain poodles, you can keep an eye out for a sale earlier in the year rather than paying full price in December. Take advantage of the after Christmas sales this year to stock up on gifts for next year. At the very least, you should be buying wrapping paper, bows and gift tags at 75%-80% off at the after Christmas sales.

Skip Restaurant Meals

Many of us love eating out, and when we get festive around the holidays it’s a lot of fun to go out for dinner with friends and co-workers. It’s very easy for your bill to get out of hand at a restaurant. By the time you get a drink, an appetizer, dinner, and dessert, you’ve spent a whole day’s pay no matter which restaurant you’ve chosen. Consider getting a bite to eat at home and then meeting your friends out for a drink. Or, eat a snack and then order an appetizer at the restaurant rather than a full meal. Saving a few dollars at each meal can really add up.

Go Back to the Envelope System

I know several people who still cash their paychecks and split up their money, filling envelopes for each household expense. You may not need to do this for every bill, but try doing it for holiday gifts. If you go to the mall with an envelope for Aunt Lucy’s gift and it contains the $25 you plan to spend on her, you will be less tempted to pull out the credit card to overspend. Better yet, leave the credit cards at home and it will be impossible.

Buy Fewer Gift Cards

We all have a hard-to-buy-for person on our list. The ones that get us so frustrated that we end up getting them a gift card, sometimes to a store we’re not even sure they like. Consider putting some more thought into a gift for these difficult people, or just break down and ask them what they’d like this year. When we buy gift cards, the recipient knows exactly how much money we’ve spent on them. If you’re like me, you buy a larger gift card than the amount you might spend on a gift, just so you don’t look cheap. If you spend more time thinking of a gift, you can save yourself money. You might even get that $50 porcelain poodle on sale for $25, yet still feel like you bought Aunt Lucy a $50 gift.

The common theme in all of these tips is to think before you act, and put some extra time into planning. If you do that, it should be easy to save a little each holiday season.

Submitted by:
Kerry Hammond, Esq.

Don’t Bury Your Head in the Sand This Holiday Season

2011-12-13T08:56:00.000-08:00

As the holidays approach, and we spend money we don’t have, it’s very easy to bury our heads in the sand and ignore our financial situation. It’s much more fun to buy gifts and spend time with family than it is to open bills and try and budget minimum payments for credit cards.

What’s worse is that a lot of people know that once the holidays are over, something needs to be done to dig out of the hole they’re in. If bankruptcy is something you feel could be in your future, the last thing you should do is wait until after the holidays. Meeting with a bankruptcy attorney before the holidays can be more helpful than you might think.

Here are four important reasons to take care of your finances before the holidays rather than after:

1. Ease Your Mind to Enjoy Friends and Family

Rather than forcing you to think about bad things instead of good, consulting with an attorney about your finances can actually free your mind of the stress you’re already feeling. Finding out that there is a light at the end of the tunnel can go a long way to helping you enjoy this festive season. Sitting down with an attorney for a free consultation can give you a game plan on how to tackle your debt after the holidays.

2. End Harassing Creditor Calls

At Greenwald & Hammond, we don’t require full payment to begin working on your case. In a lot of instances, clients only have a few hundred dollars to put down to retain our firm. This is enough to get things going and allow us to field those harassing creditor calls for you. With all creditor calls coming to our office, you are no longer worried that your holiday dinner will be interrupted by an unwanted bill collector.

3. Start Off the New Year on the Right Foot

There are a lot of things that need to be taken into account when you file bankruptcy. An attorney can guide you on the dos and don’ts involved in preparing to file, which will help you round out the year successfully.

4. Protect Your Tax Refund

Early next year is tax refund season. It’s very important to talk to your attorney about possible tax refunds that are owed to you and to get advice on whether or not this may delay your filing. In many cases, you can keep your tax refund and use it wisely, perhaps by paying the rest of your attorney fees in order to get your case filed.

This year, make your new year’s resolution early and vow to take the first step to freedom from debt, so that you can be free to have a wonderful holiday.

Submitted by:

Kerry Hammond, Esq.

Bankruptcy and Businesses

2011-12-12T10:01:00.000-08:00

When you hear a business is bankrupt, your first thought is that it is finished. As many may know, though, filing bankruptcy may not mean the end for a business. Many large businesses use chapter 11 bankruptcy to restructure the debt of their business. For many small businesses chapter 11 may not be a viable option as associated costs can be very high.

If a business files chapter 7, the business must be liquidated to pay creditors, and therefore the business will cease to exist. What many people do not realize is that a business does not get a discharge. That means that if a business files bankruptcy and tries to continue to operate, creditors may continue to seek payment of debts from the business.

When an individual owns or operates a small business the individual is often liable for the debt incurred by the business. In most cases, small business owners are asked to personally guarantee leases and business loans. If the business fails, the individual remains liable for the debt. As a result the individual may need to file a bankruptcy as a result of their failed or struggling business.

When an individual business owner files bankruptcy the individual is relieved of the business debt. That does not mean that the business is relieved of the debt. There are many factors to consider when filing a bankruptcy that is a result of a failed or struggling business. The ownership interest in the business may be an asset in an individuals bankruptcy, however it may have so little value that it cannot be liquidated. This is often true of personal service businesses.

There are strategies that can be used to keep your business operating through and beyond a bankruptcy. It is important to involve an attorney if you are a business owner filing bankruptcy. At Greenwald & Hammond we work closely with business owners to determine how a chapter 7 or chapter 13 bankruptcy will affect the business and what consequences the bankruptcy will have on the debtor as well as the business.

Submitted by:

Mindy Greenwald, Esq.

Think Twice Before You Cash Out That 401k

2011-12-09T09:06:00.000-08:00

This issue comes up a lot in my initial consultations with clients. More often than not, by the time someone comes to see me, their finances are completely out of control and they are sinking fast. I can’t tell you how sad it makes me when I hear that someone took money out of their 401k, thinking it would get them out of debt, only to find that they still need to file for bankruptcy. In these cases, that money is gone and the debt it went to pay would most likely have been discharged in their bankruptcy.

There are those times, however, when someone comes in to meet with me because they are treading water and know that they can’t stay afloat for much longer. These people haven’t yet touched their retirement money, and I can help them determine whether it’s a smart move or not. Together we can come up with a game plan that helps keep this hard earned retirement money safe for its intended purpose, retirement.

When you file for bankruptcy, there are categories of exemptions and dollar amounts associated with each category. These dollar amounts represent the value in each category of property that is, in essence, safe from the bankruptcy trustee and your creditors. Your 401k, or other qualified retirement account, is 100% exempt and safe from your creditors. Keep in mind that you still have to include it on your petition, but once you do that you then take your deduction for the entire value.

The fact that this asset is 100% exempt makes it very important to keep it safe. If you only owe $5,000 to Mastercard and you decide to take out a 401k loan to pay it off, and then pay yourself back with interest, that’s one thing. But if you owe a large amount of credit card debt and are being sued for a card with a $5,000 balance, and you decide to take out that same 401k loan, it’s not as simple. Paying the one creditor is a short term fix, but the creditors to whom you owe the rest of the money can just as easily get to the point where they are also suing you. In this situation, it’s a snowball effect and can easily get out of hand. You could end up draining your entire retirement account and be left with nothing but more debt that you couldn’t cover.

If you’re thinking of pulling money out of a retirement account, it’s important that you speak with an attorney before you do it. Find out if it’s really the right thing to do before you cross the point of no return. At Greenwald & Hammond, we offer a free consultation and can discuss keeping your exempt assets safe from your creditors.

Submitted by:
Kerry Hammond, Esq.

Timing Your Bankruptcy Filing During Tax Season

2011-12-08T16:07:00.000-08:00

Many factors go into determining the best time to file your bankruptcy. As the year comes to an end and a new year approaches, one thing to keep in mind is that in Colorado, there is no exemption for tax refunds. This is something to consider when determining when is the best time to submit your bankruptcy petition to the court.

While Colorado exemption statutes may be generous as applied to certain assets, the state has no bankruptcy exemption for tax refunds or for cash (although cash attributed to income or social security may have exemptions available). With that in mind, an individual preparing for bankruptcy needs to weigh the pros and cons of filing when a tax refund is expected.

To make this concept more clear, as the year goes on, a wage earner typically pays federal income taxes through wages that are withheld from pay. At the start of the next year, the wage earner must file a tax return. A refund becomes available if the individual paid more taxes than required under the tax code. If a debtor files bankruptcy in Colorado, the bankruptcy trustee is going to look to see how much has been paid in as federal withholding, if the amount appears to be significant or in excess of what the debtor should owe in taxes, then the trustee will request a copy of the debtor's tax return and may intercept or request turnover of the tax refund and use the refund to pay creditors. It is important to keep in mind that the failure to provide copies of tax returns or turnover tax refunds when requested can result in the revocation of a discharge.

The big question is whether one should wait until a tax refund check is received and spent before filing or should the bankruptcy be filed at the risk of losing the potential tax refund. When a substantial amount of money is expected, it would seem wise to wait until the refund is received and spent before filing, however keep in mind that the money should only be used for reasonably necessary expenses.

If an individual decides to wait for the refund they must then use the money wisely. Many debtors have medical and dental needs that they have been putting off because money has been so tight, it would be appropriate to use the tax refund for such needs. It is also justifiable to use the money to pay a bankruptcy attorney and the bankruptcy filing fee. Some other acceptable uses for the refund are basic living expenses like mortgage payments, moving expenses, groceries, clothing, household repairs and car repairs. It is wise to consult with your attorney when you are unsure about whether an expense is reasonable.

There are many pitfalls to avoid when spending the tax refund prior to filing bankruptcy. While it might be tempting to pay a debt owed to a family member or close friend, it could be detrimental to that friend or family member since the trustee may try to recover any money paid to friends or family within the year prior to filing a bankruptcy. Another mistake people make is giving away the money to a family member, this may be considered a fraudulent transfer of assets and can cause problems for the individual on the receiving end. It is important to avoid using the money for the purchase of luxury items.

While in many cases waiting to receive a tax refund may benefit the debtor, there are a few instances where it may not be beneficial. If a debtor is being garnished and the amount that will be garnished by the time the refund is received is close to or exceeds the amount of the refund then waiting will not be beneficial. If the debtor is facing a foreclosure sale and is hoping to stop the sale, then time is of the essence and the refund may be lost. If a debtor is involved in litigation and costs are mounting, foregoing the tax refund may result in less of a loss in the long run for a debtor.

Every case is unique and debtors should be encouraged to discuss the pros and cons with their attorney before filing their case. The bankruptcy attorneys at Greenwald & Hammond are experienced, knowledgeable and willing to spend the time to discuss whether to file a bankruptcy before or after receipt of a tax refund. If you are considering filing bankruptcy, don't wait to speak to an attorney, get the answers and advice that can prevent you from making common mistakes that individuals make. Call Greenwald & Hammond for a free consultation to discuss your unique circumstances.

Submitted by:
Mindy Greenwald, Esq.

If I File For Bankruptcy, Will I Ever Be Able to Buy a Home?

2011-12-06T20:13:00.000-08:00

We hear this question from a lot of people that come to Greenwald & Hammond for bankruptcy advice. The quick answer is yes, you will eventually be able to buy a home. How long you need to wait isn’t as clear cut of an answer, as there are a few factors involved.

In many cases, a bankruptcy isn’t the only thing negatively reflected on your credit report. If you have a foreclosure, short sale, or deed in lieu on your credit as well, this can affect the timeframe you may be required to wait before you can be a homeowner again.

In addition, anyone who has ever purchased a home, or looked into purchasing a home, knows that there are a number of different types of loans out there that can get you into your dream home. Each type of lender has their own guidelines for lending post bankruptcy, foreclosure, and short sale.

In order to simplify, I have compiled information from many sources and below you will see an estimate of the amount of time you may have to wait to buy again, from a few of the most common lending sources. These numbers are meant to be used as a guideline and each lender will have their own additional restrictions, but it’s a starting point.

Conventional:

7 years from the date of foreclosure sale
4-7 years from the date of completion of Short Sale or Deed in Lieu
4 years from the date of discharge in a Chapter 7 Bankruptcy
2 years from the date of discharge in a Chapter 13 Bankruptcy

FHA:

3 years from the date of foreclosure sale
3 years from the date of completion of Short Sale or Deed in Lieu
2 years from the date of discharge in a Chapter 7 Bankruptcy
2 years from the date of discharge in a Chapter 13 Bankruptcy

VA:

2 years from the date of foreclosure sale
2 years from the date of completion of Short Sale or Deed in Lieu (additional restrictions apply if the Short Sale was also a VA loan)
2 years from the date of discharge in a Chapter 7 Bankruptcy
1-2 years from the date of discharge in a Chapter 13 Bankruptcy

Keep in mind that these guidelines don’t take into account things like income and credit score. You will still need to work on rebuilding your credit and be able to show valid income before any lender will approve your loan. If you’re not sure whether you should file for bankruptcy, or allow your home to go into foreclosure, it’s a good idea to get some legal advice. At Greenwald and Hammond, we offer a free consultation to give you the guidance you need.

Submitted by:

KerryHammond, Esq.

Cutting Back by Avoiding Instant Gratification

2011-12-05T15:00:00.000-08:00

As a bankruptcy attorney I look at many clients' budgets and am always a little surprised when people with good incomes cannot tell me where their excess income is spent. When a client is preparing for bankruptcy I ask that the client fill out a form indicating their income and withholding and a form indicating their expenses. A surprising number of individuals are unable to state with specificity their monthly income or their monthly expenses. In some instances, it would appear there is disposable income available and when I suggest that they should be doing fine and actually have extra money left over every month they stare at me in absolute disbelief because they don't.

When I am confronted with a family that would appear to have sufficient income but are struggling I don't always have to look too hard to find where they have gone wrong. I have seen bank statements with countless itunes charges, I have seen cable bills that exceed my monthly car payment and Wal Mart or Target charges that would make you think they bought the entire store.

We live in a time of instant gratification and excess. I remember wanting to own a copy of Madonna's "Material Girl" but I had to wait until my allowance and decide if I should buy the Madonna album or save the money for the fringed boots that I so badly wanted. Today, if I want Madonna's (or Lady GaGa's) latest I can tap a button on my phone, type in my itunes password and own a copy. I do not open my wallet and I don't have to think, I mean it is only 99 cents. Unfortunately it all adds up! One app here, one song there, and before you know it you have spent a fortune. Now throw in an entire family with smart phones and "on Demand" cable and you will find it really does add up.

Can we go back and teach ourselves and our children that we do not have to have the latest and greatest right now? If you can find the strength to do it, it will save you lots of money over time. When a client files chapter 7 bankruptcy, the court and the trustee may not care all that much about the debtor's budget but I care and try to help clients find a way to get by and avoid future problems. If a client files for chapter 13 bankruptcy, the trustee will be concerned with the debtor's budget and the debtor will be expected to show that they have done some "belt tightening" and that their monthly expenses are reasonable and necessary for their well being. That should not scare anyone away from filing bankruptcy after all it is a good lesson in discipline.

If you are spending more than you are earning, take time to figure out whether some of the excess is necessary. Remind yourself that you do not need everything now. Try to live with just a little less. Hold off on purchasing new items, whether it be music on itunes, a pair of shoes at Nordstrom, or one less movie on demand. Allow yourself an indulgence on a special occasion rather than every time you see something you want.

If your budget is so tight that necessary living expenses exceed your current income then you may need additional help. Do not let such a situation go too far before seeking help. Avoid wage garnishments, repossessions and foreclosures by acting early and speaking with an attorney at Greenwald & Hammond to discuss your options in a free consultation.

Submitted by:
Mindy Greenwald, Esq.

Bankruptcy Has Never Really Been For Deadbeats

2011-12-02T15:56:00.000-08:00

Many people have it in their heads that filing bankruptcy is for deadbeats. We all know who I’m talking about, the ones who don’t want to work and who rack up credit card debt on frivolous purchases. I think some of us want to believe that myth, mostly because that doesn’t describe us. And if that doesn’t describe us, then we will never be in a position to need to file bankruptcy, right? Wrong.

I’m sure those people are out there, some of us may even know one or two, by they’re not the majority of people that come in to speak to an attorney at Greenwald & Hammond. Our “typical” consultation is with middle class people who have fallen on hard times. There are many reasons for these hard times, but I find that they fall into one of three categories: loss of income, unexpected medical bills or home loan modification that never happened. Sometimes it can be all three.

Not many middle class Americans can take the kind of income hit caused by the loss of a job or a drastic pay cut. This can cause a snowball effect; less income leads to less money to pay bills, which leads to putting more on credit cards, which leads to higher minimum payments that can’t always be met.

Similarly, an unexpected medical emergency can cause you or your spouse to be out of work for a period of time (or permanently) and leave you with a large amount of out-of-pocket bills that your insurance didn’t cover. This can put you back to the above paragraph of reduced income, which causes the same snowball effect.

Trying for a loan modification is a discussion for another time, but in essence you need to be delinquent on your house payments to even be considered for a loan modification. If they deny you, you are back where you started as far as your mortgage payment each month, but you are also faced with arrears for all of the months you went behind. This commonly leads to a foreclosure when you can't pay. In theory you should have been saving those payments in a separate account just in case, but rarely do I see anyone who has done this. Sometimes it’s because that money needs to be used elsewhere, and sometimes it’s just because you think you’re a shoe in for that loan modification and will never need to come up with those back payments.

Nothing that I’ve described here has anything to do with being a deadbeat. Rather, these are things that can, and do, happen to the best of us. Don’t let the stigma you’ve put on bankruptcy stop you from seeking out help with your finances. Bankruptcy may not be the answer to your problems, but you won’t know until you ask.

Greenwald & Hammond offers a free consultation so that you don’t need to pay upfront to find out if bankruptcy is even an option for you. Contact our office for more information.

Submitted by:

Kerry Hammond, Esq.

How Do Bankruptcy Attorneys Get Paid?

2011-12-01T21:03:00.000-08:00

One of the most common questions I am asked when I tell people I am a bankruptcy attorney is "how do you get paid?"

To many people it comes as a surprise that most people who file bankruptcy have income. Many earn a decent living and without their current debt, could be quite comfortable. The reasons for bankruptcy are vast. People incur unmanageable debt for many reasons. Some cases are the result of one bad business decision, others may be the result of a sick or injured family member with inadequate insurance. For many individuals, their debt was manageable until a pay cut or loss of employment. People of all income levels file bankruptcy.

To answer the question, I explain that if an individual is going to file bankruptcy, they can and should stop making their burdensome monthly payments to their credit cards and other unsecured loans. Once their paycheck is no longer being used entirely for payment of unmanageable debt, the individual can use that money toward attorney’s fees and necessary living expenses. Once a client makes an initial payment to our firm, our firm will take all creditor calls and help the individual client avoid harassment from creditors. Most firms take payment plans but should not file a chapter 7 bankruptcy case without receiving the fees prior to filing. If a chapter 13 bankruptcy is filed, fees may be included in the chapter 13 payment plan and the case will likely be filed once an agreed upon retainer is received.

For more information on bankruptcy contact the attorneys at Greenwald & Hammond, PC.

Submitted by:

Mindy Greenwald, Esq.

Have We Returned to the Middle Ages?

2011-11-29T21:38:00.000-08:00

Many of us have heard of outdated state laws that are still on the books. It may be illegal to play Dominoes on Sunday in Alabama, but none of us live in fear that this will actually be enforced. Instead, we get a laugh out of these funny rules and wonder who came up with them in the first place.

Not so funny, however, is a recent Yahoo Finance article that reveals that 1/3 of the states in our country still have a law on the books that people who default on their debts can be jailed. Yes, this is the concept of a debtor’s prison. We know people can go to jail for failure to pay court ordered debts, such as child support, but has our society really returned to the middle ages?

For the most part, this is just an example of fed up creditors trying to get what they feel is their due. But it really makes you think, and shows how the feeling of desperation can occur on both sides. Prison may not be the answer, but for many, bankruptcy may. Bankruptcy law, unlike that related to debtor's prison, is there to help people get out from overwhelming debt and get on with their lives.

Talking to a bankruptcy attorney is the first step to finding out what your options are. At Greenwald & Hammond, we offer a free consultation to help you understand bankruptcy and find out if it is right for you.

Submitted by:

KerryHammond, Esq.

Black Friday Blues

2011-11-28T12:12:00.000-08:00

The reports are in and Black Friday sales were up this year. That's great for the retail industry and sometimes taken as a good sign for the economy in general, but how did you fare? Did you incur more credit card debt to get that great deal on a television or video game console?

According to a Bloomberg article "Fed Says Household Debt Continues to Fall", consumer mortgage debt is down, however consumers' non-mortgage debt continues to rise. Consumers may have dipped into retirement and other nest egg savings to spend over the holiday weekend. Others probably used available credit and hope to pay it off sometime in the future.

Getting out from credit card debt is often times harder than one may think. If you didn't have the cash this month to spend on the items you bought, will you have it next month to pay the bills? Are you paying excessive interest on your credit card purchases? The cycle of debt that credit card use can create is one that is hard to break. Don't let the holidays get you into that cycle. It is okay to sit the family down and say that you are going to spend a little less this year. Everyone will survive.

If you are in the cycle of credit card debt where every month you need to use your credit cards because after you pay your monthly bills there is nothing left to pay for your necessities, then it may be time to seek help. The attorneys at Greenwald & Hammond can assess your situation and help you come up with a plan to eliminate the debt and end the cycle of credit card reliance. Contact Greenwald and Hammond, PC today for a free initial consultation.

Submitted by Mindy Greenwald, Esq.