Welcome Back to Students! Leave Your Wallets at the Door!

It is once again that wonderful time of year, back to school time. Many people are now beginning classes at public and private universities with the hope of bettering themselves and their families. Education is extremely important, but unfortunately the cost of it may now be outweighing the benefits. I found this video from John Oliver online this morning, and I think it pretty well outlines the problems with our current student loan system. I highly recommend watching it if for no other reason than it is funny. I am hard on student lenders, but that doesn’t mean I think people shouldn’t go to school, they just need to be aware of the future they will be facing and right now the schools don’t do a very good job of preparing people for that reality. Do yourself a favor and watch the video.

To anyone going back to school this fall, have fun, study hard, and don’t take the financial aid office’s advice as gospel.

Juggalo Bankruptcy Special!

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First, a warning: This article references Juggalos and the Insane Clown Posse. If you do not know what either of those things are, do not ready any further. Learning about Juggalos will shake your faith in humanity and will most likely plunge you into a deep despair from which you can never emerge. If you are unaware, stay that way, some things you cannot un-see.

So, Juggalos, how’s it going? I see that the Gathering of the Juggalos is happening this week, that looks like Cholera The World’s Largest Port-a-potty fun. I hope you enjoy your time at the concert while you are there, though it can be rather pricey. I am sure you were financially responsible and have been saving up for months for your sojourn. So if you have, please get a vasectomy enjoy yourself, wear your face paint with pride, and enjoy the melodic sounds of the Insane Clown Posse. I even went to instagram and found some of your photos and it looks like you are in the kind of movie that even the mere possession of would get you arrested in all fifty states  having a wonderful time! I particularly think these photos are the best:

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Now, I hate to be a buzzkill but once you get back you will have to deal with your finances. I’m going to guess as a Juggalo, you are not employed and your job prospects are about as good as those of a convicted murderer. You’ve had some bad luck and made several some bad decisions and now you need help. You may have considered filing bankruptcy in the past but thought it was just to expensive. Well today is your lucky day Juggalo, I’ve got a deal for you. 

Because I cannot fathom how or why someone would become a Juggalo, I will give you 20% off the filing of your next bankruptcy. Hey, I’ll even sweeten the deal, if you promise to wear full Juggalo face paint to your meeting of creditors, and at the end of the meeting douse the trustee in faygo while screaming “Juggalo 4 Life” I will do your bankruptcy for FREE!

It takes a lot of drugs gumption to dress like a moron Juggalo and listen to music so bad it makes me envy the deaf the Insane Clown Posse, and I salute you. You have eschewed social mores about personal hygiene, dental hygiene, pretty much any kind of hygiene,  music and clothing and for that I pray you don’t reproduce salute you.

You need a bankruptcy attorney who understands Juggalo life, you need a bankruptcy attorney who doesn’t judge you, you need a bankruptcy attorney who pretends to not notice that you are a grown man wearing face paint out in public — You need us.

So enjoy the rest of your festival Juggalos, I’ll be here to talk when you get back.

 

Filing for Bankruptcy Got More Expensive

Over the past few years bankruptcy filings have declined nationwide, and that is good news for consumers, but bad news for bankruptcy courts (and bankruptcy attorneys). The way bankruptcy courts get most of their revenue to operate is through the filing fees charged in cases. Obviously as there are less cases, that means less money, so starting today the filing fees have increased. Now if you plan on filing a Chapter 7 bankruptcy in Grand Rapids, your fee is $335 instead of the $306 it previously was. If you want to file Chapter 13 in Kalamazoo now you pay $310 instead of $281, and if you want to file  Chapter 12 in Lansing you pay $275 instead of $246.

MARCH MADNESS BANKRUPTCY TOURNAMENT!

Who's in your Bankrupt Final Four?

Who’s in your Bankrupt Final Four?

Okay, I am totally ripping off this idea from another Bankruptcy Attorney, but it was too funny not to share. Well, I think it is funny, maybe just because I am a bankruptcy attorney.

I think it is a good illustration of famous people who have filed bankruptcy. Most people think bankruptcy means failure, and that you will never bounce back from it, but when you see that people like Abraham Lincoln, Thomas Jefferson, James Madison, Walt Disney, Tom Petty and Willie Nelson have all filed bankruptcy, well maybe it doesn’t mean failure. Bankruptcy is a fresh start and allows people to get rid of past mistakes and fulfill their potential without their creditors holding them back.

So who ya got in your Bankrupt Final Four?

I have no idea who these people are, and I am very proud of that.

Real Housewives: Bankruptcy Court Edition

I have no idea who the two people are in the photo above, but my lovely wife tells me they are on the show Real Housewives of New Jersey. So why are these degenerates on my blog? Bankruptcy Fraud! It seems these housewives filed bankruptcy back in 2012 and lied on their bankruptcy petition, omitted assets, and were otherwise untruthful. That was a really bad idea.

Why was it such a bad idea? Well, when you sign a bankruptcy petition you are certifying under oath, and subject to the penalties of perjury, that all of the information in your bankruptcy petition is truthful and correct, that all assets and liabilities have been disclosed, and that the petition is being filed in good faith. Most people don’t realize that when they are in my office signing the petition, it is just as serious as if they were in a courtroom on a witness stand. Those penalties of perjury I mentioned earlier, they include up to five years in a federal penitentiary and/or $500,000 dollars in fines. I should also mention that if you lie you can either have your bankruptcy discharge denied, or if it has already been given, it can be revoked and all of those debts will become non-dischargeable.

It looks like Mr. & Mrs. Giudice will each have quite a bit of time in federal prison to consider the error of their ways, and when they get out all of those debts they tried to get rid of will be there waiting for them. I also pretty sure that federal prisons do not have tanning beds or hair styling products, so it looks like these two might have a rough go of it. The moral of this story is don’t screw with the bankruptcy court. The best way to prevent these sorts of things from happening is to be honest with your lawyer. You are paying them for their advice and counsel, if you disclose these things to us ahead of time we can prevent bad things from happening, but hiding it helps no one. You will get caught, and it will be worse than if you had just been up front.

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Same Sex Marriage & Bankruptcy

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Recently the United States Attorney General announced that the United States Government expanded the recognition of same-sex marriages in federal legal matters including bankruptcies, prison visits, and survivor benefits. For same-sex couples needing to file bankruptcy this cold end up resulting in significant savings as they can now file a joint bankruptcy petition.

When filing bankruptcy, married couples are allowed to file one bankruptcy petition. This often ends up in a more efficient administration of the bankruptcy case as the assets and finances of a married couple are so intertwined that it makes sense to have them dealt with in one proceeding instead of two. Also, it represents real financial savings for a financially distressed couple. Prior to this ruling, if a same-sex couple wanted to file bankruptcy they would each have to file a separate petition and that means two filing fees, two sets of attorney fees, and have two separate court hearings.

However, this ruling does not mean that all same-sex couples can file a joint bankruptcy petition. In order to file a joint petition, the couple must have a legally valid marriage from a state that recognizes same-sex marriage. So, if a couple had been married in New York which recognizes same-sex marriage, they could file a joint bankruptcy petition in Michigan. However, a marriage performed in a state that does not recognize same-sex marriage would not entitle that couple to file their own joint bankruptcy petition.

If you have questions about how this new policy of the Federal Government may affect you, please don’t hesitate to contact us and ask for help.

Bad Banking

I came across this article today in the Wall Street Journal about Bank of America harassing debtors in bankruptcy and it got me thinking. In my line of work I deal with dozens of banks, some are easy to deal with, some are difficult, and then there is Bank of America. If you have a mortgage owned by Bank of America, may God have mercy on your soul, because Bank of America sure won’t. The biggest misconception most of my clients have about banks is that they act rationally — they do not.

I cannot begin to tell you how many times I have had clients with money trying to pay their mortgage, and they are declined. Below is a true example of a time where I was dumbfounded by this bank:

I had a client whose home was foreclosed upon despite his best efforts to work with Bank of America. Fortuitously, he inherited quite a bit of money shortly after his home was foreclosed upon. In Michigan you have six months from the date of foreclosure in which you can still keep your home if you pay the full amount owed to them. During this six month period the client and I spent hours on the phone with Bank of America trying to pay them over $150,000.00 –the full amount owed on the mortgage — and kept getting bounced around from desk to desk. Bank of America had two options, decline our money, and lose over $50,000 when they tried to re-sell the house, or accept our offer get paid in full and move on. A rational person wouldn’t think twice, you take the money. But this is Bank of America. It took over six months, hours on the phone, and a lawsuit to get them to accept the money.

So the next time you think that if you could only talk to the bank, you could come up with a deal that makes sense, realize you can’t. Banks aren’t people, people generally have common sense, banks do not.

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“How Much Do You Charge?”

Our office receives phone calls from potential clients several times a day, several times a day we are asked the same question, and several times a day we give the same unsatisfying answer:

Client: How much do you charge to file bankruptcy?

Staff: It really depends upon your unique situation, what type of case we would file, and how complex it is.

Client: Ok, but how much will it cost?

It is a simple question, and one you would think a bankruptcy attorney should be able to answer, but it is a loaded question. It is like asking a dentist how much it will cost to fix your teeth without ever having him look in your mouth. Until we truly understand you, your situation, and any potential problems there is no good way to give you a price quote.

So if I can’t give you a price over the phone, how can all those other attorneys who advertise cheap bankruptcies do it? Well, they can’t. Odds are the price they quote is for a basic case with no problems, and most of the time when you meet with them it will end up costing you more than advertised in hidden fees. Cut-rate attorneys and petition preparers have done an excellent job at convincing the general public that all bankruptcy consists of is filling out forms, that it is as simple as playing mad-libs. The truth is that bankruptcy is one of the most complex and difficult fields of law and an unskilled attorney might not be smart enough to see potential problems.

For example, I met with a client who seemed to have a simple straightforward case, in fact they had been quoted a fee of $900 by another attorney over the phone. I met with this gentleman, and while at first it seemed straightforward, but it eventually came to light that he used to be a builder, and that if we filed bankruptcy he was likely to be challenged with multiple non-dischargeability lawsuits based on state law. It was s simple passing comment that changed his case from a simple to complex.

We bankruptcy attorneys fully understand that price is an issue, but the most important thing for anyone considering bankruptcy is to get good information. Find an attorney who knows what they are doing, one that you feel comfortable with, and then arm yourself with knowledge. Most reputable attorneys will meet with you for free so you have nothing to lose. Remember, filing bankruptcy is a serious legal matter — how it is done could have consequences on your future. So when you call an attorney, meet with them first, get a price second.

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Will Obamacare Reduce Bankruptcy Filings?

As of Monday morning, you can now sign up for government subsidized healthcare through the Health Insurance Exchanges. Whether you love or hate the law, it is certain to help many previously uninsured people obtain health care. So how does this relate to bankruptcy?

Well, medical bills are one of the main reasons why individuals need to file bankruptcy. Whether it is from a serious illness such as cancer, an accident, or even a routine illness, healthcare is expensive. For those who don’t have insurance, the bills simply continue to pile up with no end in sight.

The group Physicians for a National Health Program conducted a study following the passage of Romneycare in Massachusetts and found that roughly 52% of consumers who filed for bankruptcy listed medical debts as a factor. Prior to the imposition of Romenycare, that number was at 59%.

Furthermore,a study on the website nerdwallet found the following:

  1. 56 Million Americans under age 65 will at some point have trouble paying medical bills.
  2. Over 35,000,000 American adults will be contacted by collection agencies for unpaid medical bills.
  3. Nearly 17,000,000 American Adults will receive a lower credit score due to their medical bills.
  4. Over 15,000,000 American Adults will use all their savings to pay medical bills.
  5. Over 11,000,000 American Adults will incur credit card debt to pay medical bills.
  6. Roughly 10,000,000 American Adults will be unable to pay for basic necessities like rent, food, and utilities due to their medical bills.
  7. Over 16,000,000 children live in households struggling with medical bills.

Obviously these numbers are staggering, but will Obamacare change them? Will Obamacare mean less bankruptcy filings? I don’t know, I certainly hope so, but simply having insurance will not solve the problem. Whether or not this will change anything has a great deal to do with deductibles. I have represented hundreds of people with major medical debt in bankruptcy, and most of them actually have insurance.

The problem is that when you have a high deductible, say $10,000, you would first have to come up with $10,000 before you feel any relief from your insurer. For most of my bankruptcy clients, a high deductible leaves them in the same position as they would be if they never had health insurance to begin with. It is too early to tell much about the success of this program, and perhaps the deductibles will be affordable for most families, but if not then Obamacare may not provide much if any relief.

FREE BANKRUPTCY ATTORNEYS

A few days back I wrote an article about the dangers of hiring cheap bankruptcy attorneys. They are often unscrupulous, uneducated, and will cause you terrible problems. But some people, no matter how hard they try, will simply never be able to afford to hire a bankruptcy attorney. So what is a person to do when they are truly in need? Well, luckily there are a few options.

The first option is Legal Aid of West Michigan. This is a group that provides free legal services to people who could otherwise not afford it. They will assess your situation and determine whether or not they can help you. They have several excellent attorneys, but unfortunately not enough of them, so though you might need their help you may not be able to receive it.

If legal aide cannot help you, they will at least be able to refer you to other bankruptcy attorneys who can. Often, these attorneys will take a certain amount of cases pro bono (for free). Our office is one of those few that will do free cases from time to time. Of course we cannot take every case for free as we have to make a living, but you can always ask an attorney if they will, there is no harm in that.