Spokane Bankruptcy Attorney Sings Country Songs

How is Bankruptcy Like a Country Song Played Backwards?

You get your house back, your truck back, your money back, your dog back……

Bankruptcy is not just a last resort for the hopelessly indebted. In fact, bankruptcy is a right given to U.S. citizens in Section 8 of the Constitution, since 1787. Bankruptcy is as American as apple pie and country music. The intent of the bankruptcy laws, as stated by Congress, is to give debtors a “fresh start.” Bankruptcy also provides a predictable way for bad debts to be written off by businesses and for debt free consumers to once again participate in the economy and pay taxes. And bankruptcy is not just for cancelling debts and liquidation of assets. It is possible to keep a house while paying back payments over time. The same is true for a vehicle.

In some cases, a good lawyer can get the auto debt reduced to the actual value of the vehicle and lower the monthly payments required to keep the vehicle. Wages that have been garnished may also be retrieved. You can even get your suspended driver’s license back by paying traffic fines through a Chapter 13 Plan. To sum it up, you could get your house, car, garnished wages, suspended drivers license back and a fresh start by calling an experienced Spokane Bankruptcy Attorney. 

Being relieved of high monthly credit card payments as well as collection agency calls can get you your life back. All of this will improve your quality of life, help you sleep at night, and give you a brighter, more optimistic personality.  Like Taylor Swift and Blake Shelton.  As a Spokane Bankruptcy Attorney, I see good people—just like you— get good results every day.

Spokane Bankruptcy Attorney girl guitar country

Bankruptcy Credit Card Debt Discharge

Can I Get Rid of Credit Card Debt in Bankruptcy

One of the major reasons that people file for Bankruptcy is to cancel, or discharge, credit card debt.  Credit cards tend to have high interest rates and also high late fees and other costs.  Because credit card debt is in essence a high risk loan, the high cost of borrowing is not surprising.

Credit card companies do however, target college students and people with limited resources, including recently bankrupt debtors, with marketing plans that take advantage of inexperience and desperate situations.  Credit cards are a means of getting by as a last resort but the resulting high minimum monthly payments can push a person quickly toward bankruptcy.

Most Credit Card Debt Can Be Discharged in Bankruptcy

The good news is that most credit card debt can be discharged in bankruptcy as is true of most unsecured debt.  Unsecured debt is debt that is not a lien on real or personal property. Examples of secured debt are a home loan or an auto loan.

Some credit card debt can however, be secured debt.  Department store credit cards, like Sears, or cards issued for a specific purpose such as financing the purchase of major appliances, may be secured in part.  Typically, major appliances on your Sears card are secured, while back to school clothes are not.  This means that the portion of the bill that is secured must be reaffirmed in order for the debtor to keep the appliances.

Another common secured consumer credit debt is the purchase of tires and wheels from tire company chains.  If Les Schwab Tires issues a credit card for such a purchase, the debt is most likely secured.  In either case, the creditor will usually provide a reaffirmation agreement, a reduced balance and a new lower monthly payment.

Some unsecured credit card debt may also be non-dischargeable.  If the credit card debt was incurred for “luxury items” within 90 days of the bankruptcy filing, then those charges will not be canceled.  The statute includes in the definition, of “fraud, false pretenses and intent to deceive”

  • 523.  Exceptions to discharge.
  1. consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
  2. cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
  3. for purposes of this subparagraph-(I)  the terms “consumer”, “credit”, and “open end credit plan” have the same meanings as in section 103 of the Truth in Lending Act; and (II) the term “luxury goods or services” does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor;

A presumption of non-dischargability means that the creditor does not need to prove anything to keep the debt from being cancelled.

Discounts For Discharging Credit Card Debt

Another option has become available because of the recession and failure of many financial institutions since 2008.  Credit card companies and collectors will usually give a deep discount, some up to 70%, for a lump sum payment.  Note however, that a debt that is written off will be shown as income on your taxes unless you meet some specific exemptions.  This is because the creditor will claim a loss for tax purposes.  Debts that are discharged in bankruptcy, on the other hand, are not taxed as income.

can i get rid of credit card debt during bankruptcyA simple question often times has a complicated answer in the world of bankruptcy. An experienced bankruptcy attorney can help you consider all options, including non-bankruptcy workouts.

 

 

Bankruptcy: Sometimes, It’s Life

What would happen if………..

  •  You lost your job in a bad economy…..
  • You became ill and couldn’t work for a year…..
  • Your business went belly up and you had no income …….
  • Your spouse died and left half of everything to a zebra rescue center…..?

As much as we want to deny it, most of us haven’t been able to save enough money to survive for the amount of time it would take to get back on our feet. Why is that? Because life happens and unless we have lived in a cave somewhere, it’s very expensive.

Sometimes Budgets Can’t Compete With Life

All the budgets in the world can’t compete with the credit card marketing campaigns encouraging us to spend more than we have. The yearnings for a tropical vacation, just like the one the Joneses next door went on, are strong after a long year of hard work. And, our twin girls are both getting married this summer syndrome is no piece of cake either.

For others, circumstances beyond their control have stolen their lives without regard to the suffering affecting their families. I cannot say the word stolen strongly enough because of all I’ve witnessed as an attorney.

For all of the reasons above and many more, people come to my office to share their experience with me and ask for my advice with regard to their future. We talk about bankruptcy. Some days, when I leave my office I can’t just lock the door and leave my client’s worries behind me. Some have had devastating losses, some have debt that has built up over time, some have simply tried to live the American dream and found out it’s not so easy. All come with a feeling of shame.

The Stigma Of Bankruptcy

The stigma of bankruptcy is easier to survive than going to debtor’s prison and that’s what our country was built on. While responsible financial behavior is the goal, a new start is sometimes necessary. Our constitution is based on the knowledge that…..life happens.

Bankruptcy - life happens

Bankruptcy is an opportunity to get up, dust off our jeans, lick our wounds and try again. There is no shame in that. There are different types of bankruptcies allowing for complete discharge of debt or paying debt off in a safe financial way over a period of time. There are non-bankruptcy workouts allowing us to negotiate with our creditors. If you own a business, you can restructure to save your company and the jobs it provides.

While I wish everyone well, I understand that life happens and sometimes we just need the opportunity to start over. Bankruptcy is not the end of the world, its life happening with new knowledge and a fresh start.

Bankruptcy is not for everyone. It should be carefully weighed as one of several options. In my office, all options are discussed to find the right solution for each individual situation.

Can Bankruptcy Stop An Eviction?

Can Bankruptcy Stop An Eviction?

Bankruptcy Stamp in blue and blackLike everything else, it depends.  An eviction is a process by which a landlord can regain possession of a rental property from a tenant relatively quickly.  If a tenant has failed to pay the rent or is otherwise in violation of the rental agreement at the process can take three or four weeks from the first “Notice to Pay Rent or Vacate” until the Sheriff arrives at the door to remove the tenant.

In Washington, if rent is not paid according to the 3 day notice, an eviction lawsuit is filed and a hearing is set about 10 days from the filing.  The tenant must appear and “show cause” why they should not be evicted. Normally this is limited to stating that the rent has been paid or that there is some reason why the rent is not due.

Write of Restitution

If the tenant cannot make this showing, then the court issues an order giving the landlord the right to possession of the property and issuing Writ of Restitution which tells the Sheriff to remove the tenants. The Sheriff serves the Writ by posting it on the door.  In about three days the Sheriff will return and make sure that all occupants are out of the property.

A bankruptcy filing puts a stop to all attempts to collect debts or take property of the debtor, at least until there has been a meeting with the bankruptcy trustee, a motion to lift the automatic stay or the case is closed. If a Writ of Restitution has already been issued however, the eviction may proceed.

Eviction Under A Lease

It does make a difference whether the tenant has a lease for a term of months or years or is renting under a month to month rental arrangement. If there is a lease, then the tenant has a property interest in the remaining months of the lease.  If the tenant files a Chapter 13 bankruptcy, which involves a payment plan, the past due rent can be paid over the 36 to 60 months of the Chapter 13 Plan.  The rent due for months after the filing is also paid through the Chapter 13 Trustee.  Although bankruptcy does not give the tenant any additional right to renew or extend such a lease it can provide a way to keep current while finding a new place to rent in an orderly fashion.

Even in a month to month rental situation, state law requires a 20 day notice to terminate the tenancy. Only then can an eviction proceeding be started. If a bankruptcy is filed before the Order for Possession has been granted, the tenant will still have some extra time, a month or six weeks perhaps, within which to find a new place.

The facts of each case will determine the legal effect of a bankruptcy on an eviction. Be sure to contact an experienced bankruptcy attorney to fully understand your rights under the bankruptcy law.

 

Can I Use My Tax Refund to File Bankruptcy?

Filing Bankruptcy With Tax Returns

Using-Tax-Refund-to-File-For-Bankruptcy

Like so many other questions, the answer is “It Depends.”  A tax refund is simply a debtor’s property held by the IRS.  If you receive the refund before you file bankruptcy you can certainly pay other bills or purchase needed items with that money, with some restrictions.  These are the same restrictions that apply to any bankruptcy.  For example, if more than $600.00 is paid on a past due bill to any one creditor within 90 days of filing the Trustee may ask for that money to be paid back into the estate.

Is My Tax Refund Exempt

Paying your attorney for legal services is not however, paying on a past due bill, so there is no issue of paying it back. In many cases, the refund itself will be exempt. For example, if Federal exemptions can be used (as in the State of Washington) up to $12,000.00 in unused homestead exemption can be applied to other property.  State exemption statutes may also provide protection for your tax refund.  Since tax refunds represent earned income, in many states income exempt from garnishment may also be exempt in bankruptcy.

Generally speaking, if a debtor is eligible for a Chapter 7 bankruptcy, has little or no non-exempt property and has income below the state average, a modest refund received before or after filing will probably not be of interest to a trustee. If a debtor is filing a Chapter 13 wage earner plan and will make monthly payments on consolidated debt, the Chapter 13 Trustee or a creditor may ask the court for the refund to be included in the plan.

Best Advice

The best advice is to wait until after the refund is received to file for bankruptcy if the money can be used for something other than paying past due debt. The money may be used to buy exempt household goods or a used car or to fund an IRA because such property has its own exemption. There is also no prohibition against using the refund to pay for the legal services and court costs required to file bankruptcy.

A debtor must be careful however, if getting an advance on a tax refund from a bank or tax preparer.  If a debtor uses that money to file bankruptcy, the obligation to pay the money back may be canceled.  Such actions may very well be fraudulent as to that creditor and may result in the full debt being non-dischargeable while the refund may be used to pay other creditors.

Get More Information

Contact Steven Schneider at: (509) 838-4458 to discuss your particular bankruptcy situation.  He can give you an overview of solutions and costs and help you with a little peace of mind.

Bankruptcy – Can I keep My Personal Property?

can I keep my personal property during bankruptcy

Keeping Personal Property When Filing Bankruptcy

You might have seen the classic Steve Martin movie The Jerk. Martin’s  character and his girlfriend have become incredibly rich but are about to lose everything. Martin says “We might lose all our stuff but we’ll still have each other. “  She says “But I want the stuff!”

Fortunately, state and federal law allow debtors to keep significant personal property (a lot of stuff) when a Chapter 7 bankruptcy is filed. After a home, the biggest purchases for most people are their motor vehicles.  Most people buy vehicles with loans and vehicles depreciate significantly as soon as they are driven off the lot. This means there is usually very little equity in a vehicle because the bank has a lien for the money owed.  Federal exemptions currently allow a debtor to keep up to $3,670.00 in equity in one vehicle.

Personal Property You Can Keep

Similarly, Federal exemptions allow debtors to keep the following:

  • $12,250.00 in household furnishings, household goods, wearing apparel, appliances, books, animals, crops, or musical instruments
  • $1,550.00 in jewelry, any other property valued up to $1,225.00
  • $11,500.00 of any unused homestead exemptions
  • $2,300.00 in value in any implements, professional books, or tools, of the trade.

Note that the value of all such items is liquidation, depreciated, yard sale value.  In other words, no matter how much you value that classic Chevy you always wanted to restore but never did, it’s just junk to the Trustee.  That’s good for you in bankruptcy.

The same is true with your priceless Hot Wheels, Star Wars, and Cabbage Patch Kids collections.  The value is only what you can dump it for today, not what you paid for it or would like to sell it for.  Your granddad’s civil war rifle however, may be worth much more than you realize.

Social security benefits, IRA’s, 401k’s and pension benefits are also exempt. 

Dogs are considered property in the State of Washington, while cats are not.  Cats must have lobbied for that rule.  In any case, your highly trained hunting dog, or your prize winning show cat or stud horse may very well be valuable non-exempt property

Household goods are specifically itemized in the Bankruptcy Code to include:

“clothing, furniture, appliances, 1 radio, 1 television, 1 VCR, linens, china, crockery, kitchenware, educational materials and educational equipment primarily for the use of minor dependent children of the debtor, medical equipment and supplies, furniture exclusively for the use of minor children, or elderly or disabled dependents of the debtor,  personal effects (including the toys and hobby equipment of minor dependent children and wedding rings) of the debtor and the dependents of the debtor and 1 personal computer and related equipment. “

Some of the terms are outdated, such as the VCR, but you get the idea.  Congress decided that these items were part of the minimal American Dream; wedding rings, toys and furniture for children and television.  Anything beyond these items would have to fall under another exemption.

Household Goods You Can’t Keep During Bankruptcy

Back to Congress.  The Bankruptcy Code does not consider the following as Household Goods:

“works of art (unless by or of the debtor, or any relative of the debtor), electronic entertainment equipment with a fair market value of more than $650 in the aggregate (except 1 television, 1 radio, and 1 VCR),  items acquired as antiques with a fair market value of more than $650 in the aggregate,  jewelry with a fair market value of more than $650 in the aggregate (except wedding rings); and a computer (except as otherwise provided for in this section), motor vehicle (including a tractor or lawn tractor), boat, or a motorized recreational device, conveyance, vehicle, watercraft, or aircraft.”

In some situations, a debtor can convert non-exempt property to exempt property before filing bankruptcy.  For example, non-exempt cash can be used to purchase exempt household goods.  There are many more specific exemptions and the debtor may also be required to use state exemptions instead of federal or choose between state and federal. Some of the exemptions are doubled for a married couple, others are not.

Don’t Try To Answer These Bankruptcy Questions Alone

A debtor needs an experienced bankruptcy attorney to help sort through these rules and preserve as much property as possible under the circumstances.

A half an hour free consultation with an attorney who specializes in bankruptcy will give you a much better idea of how much stuff you can keep and how to move forward with your life after bankruptcy relief.

 

 

Can I Keep My House in Bankruptcy?

If I File For Bankruptcy, Can I Keep My House

Many people have one major asset and concern on their mind if they are considering filing a bankruptcy case” Will I be able to keep my house?  While there are a lot of variables in how this question is answered, generally, if you are not behind on your house payments and can keep making the payments during and after bankruptcy you can keep your house in a Chapter 7 or Chapter 13 bankruptcy case. Chapter 7 is commonly called a liquidation case and Chapter 13 involves a payment plan.

Washington State Homestead Exemption

In either type of case, you are entitled to certain exemptions, meaning property that cannot be taken from you.  In Washington you can exempt up to $125,000 worth of equity in your home.  This is your Homestead Exemption.  Equity is the difference between what you owe on your home and what it is worth. Many homeowners have very little equity because of financing 100% of the purchase price or having taken out a home equity line of credit.  Before the recession that occurred in 2008 it was possible to borrow up to the full value of a home.  Since 2008, property values dropped and have now started to rise.  For many however, their home loan leaves no room for non-exempt equity.

You Can Still Keep Your Home In A Chapter 13

If you are behind in your payments, you can still keep your home in a Chapter 13 if you can make the monthly payment and pay off the past due payments over 36 to 60 months.  Both the current and past due payments are paid to the Chapter 13 Trustee monthly along with any additional amounts dedicated to the Plan. For example, if your monthly payment is $1,000.00 and you missed six payments (total $6,000.00) then you would have to be able to pay $1,000.00 plus $166.67 ($6,000.00 divided by 36) per month.

What You Should Think About When It Comes To Filing Bankruptcy

Also because of the recession, many homeowners have fallen so far behind that they cannot handle these payments.  If that is the case, they will need to consider giving up their house.  If there is no equity in the house this decision may make practical sense because the payments are not building value in the house.  There are of course, also many practical and emotional reasons that make can make this decision difficult. Life plans, the well-being of children, disruption in quality of life are all affected when a family faces the loss of their home. The situation can however, be made more predictable if all possibilities are considered.  Instead of making a heroic effort to save a house that the family can no longer afford, it may be less disruptive to plan a move in a less hurried manner as part of a bankruptcy.

Protect Yourself & Your Home When Filing For Bankruptcy

An experienced bankruptcy attorney can evaluate your financial situation and all the factors that affect this decision. Protect Your property, paycheck & peace of mind. Call us today so you can sleep easy tonight. 509-822-5898.

can i keep my house if i file for bankruptcy

File For Bankruptcy In Spokane

Filing For Bankruptcy In Spokane

Filing for Bankruptcy in Spokane, Riverfront Park Spokane

When the Bankruptcy Code was changed in 2006 many people believed it became more difficult to file for bankruptcy or that they would have to pay all their debts in full.  I still hear these reasons when people tell me how long they have suffered with crushing debt. The 2006 amendments did not make it more difficult to file for bankruptcy in Spokane or anywhere in Washington state for that matter.

Post 2006 Bankruptcy

After the changes in 2006, your income is compared to a state wide average, a process known as Means Testing.  If your income is below the state wide average you are generally still eligible to file for Chapter 7 which cancels most unsecured debts. 

State wide averaging includes the Seattle side of the state where incomes are higher. Most families in Spokane fall well below that state wide average. Today, the state wide average for a family of four in Washington is $84,786.00 per year.  If you make less than that amount, and your legitimate expenses exceed your income every month, you can still file for Chapter 7 bankruptcy and have most of your debts canceled.

What To Do

Protect yourself, your property and your paycheck and have some peace of mind. If you are in Spokane or close to Spokane, contact our office at 509.838.4458 or fill out our bankruptcy intake form on our website for a quick evaluation of your situation and let’s see if filing for bankruptcy is right for you or if there are other alternatives.

Civil Rights and Bankruptcy Laws

Bankruptcy is a Civic Right

Many people who come to me for advice on bankruptcy feel ashamed and question the morality of discharging debts.  Most people are very concerned about how they are perceived. Even in distress, disability, old age, or in situations no one could control they don’t want to be seen as someone who doesn’t pay their debts. But Bankruptcy is your right.

We the People US Constitution

What they may not know is that the United States Constitution specifically instructs Congress to make bankruptcy laws.

Section. 8.

The Congress shall have Power  . . .;

To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

Civic Rights Free Citizens form Oppression

This is an important civil right because the practice at the time of the American Revolution was to put honest debtors who couldn’t pay into prison, until they or their families could buy their freedom.  The United States of America was established to free its citizens of many forms of oppression, including debtors’ prisons.

Congress has established and maintained uniform bankruptcy laws, including the current Bankruptcy Code, adopted in the mid 80’s and last significantly amended in 2006.  The over-arching policy of the law is stated by Congress as giving debtors a “fresh start” and creditors an “even playing field.”

Lenders, especially credit card companies, take the certainty of bankruptcies into account in setting interest rates. Once a bankruptcy is filed, the debtor becomes a consumer again who buys goods and pays taxes and is a benefit to the economy. The bankruptcy laws therefore, promote the social goals of helping honest debtors out of poverty, preventing homelessness and creating a productive employed citizenry.

Each case of bankruptcy has its own unique considerations, but for the average citizen overwhelmed by matters out of his or her control, it is a basic civil right.  Contact a knowledgeable bankruptcy attorney to discuss your case at www.stevenschneiderlaw.com.