Anyone with a student loan debt that has ever considered filing for bankruptcy, or met with a bankruptcy attorney, has probably been told the same thing — Student Loans Never Go Away. And while it is true that student loans are generally non-dischargeable, do they really stick around forever? Well, I say no, they don’t. You have options, not all great options, but options. So let’s go over them briefly. I promise starting next week I’ll go over all the options individually and more in depth, but for now, let’s just hit the highlights.

1. Bankruptcy:  It is true that in most cases student loans are non-dischargeable, but I personally believe that far too many bankruptcy lawyers just accept the fact that student loans will not go away instead of really delving into the facts. In order to have your student loans discharged, you must show that: (1) Based on your current income and expenses, you cannot maintain a minimal standard of living if you are forced to repay your loans; (2) Your financial situation is unlikely to improve; and (3) you have made a good faith effort to repay your student loans. This test has historically been very hard to satisfy, but with recent cases coming down, the standards are getting relaxed and improve the prospects of getting your student loans discharged. Check out this case in Oregon where a bankruptcy filer discharged almost all of his loans.  Yes, it is an uphill climb, but student loans CAN be discharged in bankruptcy, just make sure you have an experienced bankruptcy attorney to help you.

2. Income Based Repayment Plans: These plans allow you to make monthly payments based on your income if they meet a debt-to-income test. Under that plan, your payment would be lower than payments under the Standard (10-year) repayment plan. Some people even have $0 per month repayment plans. The upside to these is that it allows you to maintain your credit score, and after 25 years, if there is still a balance, the loan is forgiven.

These are the two main options for people staring down student loan debt, and we will go over them in depth next week, as well as several others that might help people struggling to pay their bills. Student loans are a problem, but they can be solved, you just need the right lawyer to help you out.

Make sure to visit our student loan help services page for additional information.

DMX: Y’all gon’ make the US Trustee lose her cool up in here! Up in here!

Way back when, I was just a bright-eyed law student full of hope, full of vigor, and ready to take on the world. I figured I would assuredly be writing briefs to be submitted to the US Supreme Court one day. Today is not that day. Today I am writing about DMX. Yes, DMX the rapper (If you don’t know who that is, ask your children). It seems that DMX had to file Bankruptcy, because he has lost his money — and his damn mind.

This story in the Wall Street Journal explains how he has not properly filled out his bankruptcy schedules, has not disclosed all assets, has not shown up for any court hearings, and is generally being recalcitrant. Because of his behavior, DMX’s case may very well be converted to Chapter 7, or dismissed entirely. I really have to wonder what bankruptcy attorney he hired. The errors on his petition are astounding for example, he claims to spend $1,000 per month on clothes, yet states that he does not own any clothes.

I suppose this goes to show that just because your bankruptcy attorney is expensive, doesn’t necessarily mean they are a good bankruptcy attorney.

Get out of Debt for $0 down and as little as $100.00 per month.

Each year I meet with hundreds of people who need to file bankruptcy. As of today, I have met with 587 potential clients in 2013. Some don’t need to file bankruptcy, and I tell them so. Some retain us to file for bankruptcy and eliminate their debts. Some need to file for bankruptcy but simply cannot afford it– It is those people who keep me up at nights. Bankruptcy is a powerful tool that can help people get back on their feet, give them peace of mind, give them equal access to justice, and I believe no one should be denied that relief.

So why can’t people afford to file for bankruptcy? Well, there are two types of bankruptcies, one under Chapter 7 of the United States Bankruptcy Code, and one under Chapter 13. A chapter 7 bankruptcy is great, but the law requires that attorneys collect all fees and costs up front. The problem with that is that it means you have to pay between $1,300 to $3,500 up front before you can get relief. In order to file a Chapter 13, our office normally requires a minimum of $1,000.00 up front to file and the rest of the money is paid to us over time.

Those methods have worked well for us, but times are tough in West Michigan and we want to help. That’s why for at least the next month  we can file your bankruptcy for $0 down.

When I say $0 down, that is exactly what it means. Zero money out of pocket for financial relief. Zero dollars to make the phone stop ringing. Zero dollars to stop garnishments. There are so many people who are desperate to get out of debt and desperate for relief, people who could afford a monthly payment in a chapter 13 bankruptcy if they could only get the up-front costs together. I decided that we need to help them.

My staff thinks I’m crazy, and other bankruptcy attorneys hate it, but I need to help my community. I am in the business of helping people get a fresh start through bankruptcy, to set their past mistakes behind them and move on. If I needed help, I would want someone to do this for me, so I want to do it for others. We do it by using the awesome power of the Chapter 13 bankruptcy.

With the Chapter 13 bankruptcy we can lower your car loan interest rates, save your home, and we can actually make your creditors pay my fees. You will have a small monthly payment, as little as $100 per month, and we will propose a plan that forces your creditors to accept our offer.

If you qualify for our $0 down program, you can get the help you desperately need today. So call us now and get set up for a free consultation. There is no risk, you get to talk to us for free and get professional advice. So call us now and let us help you.

New Honor: Jeffrey D. Mapes, Board Certified Bankruptcy Attorney

Yesterday I received news from the American Board of Certification that I have officially passed their test and passed peer review, and am now Board Certified in Consumer Bankruptcy. This now puts me in a group with only ten other bankruptcy attorneys for the entire Western District of Michigan. This means that our clients are truly getting the best, and most qualified representation they can get. I’ll let the American Board of Certification explain a little more about the process below:

“Board Certification means that the certified attorney has met rigorous, objective standards and has demonstrated knowledge in bankruptcy and/or creditors’ rights law. Hiring an attorney with expertise in any specialized field of law can be a bewildering experience. As a client, you want to make sure your counsel is experienced in the particular field. Unfortunately, prospective clients usually have little objective criteria on which to rely.

The American Board of Certification’s (ABC) programs are designed to identify and recognize those attorneys in consumer or business bankruptcy who have met or exceeded rigorous certification standards relating to experience, continuing legal education, integrity, and peer review; in addition to demonstrating a sophisticated understanding of the law in their specialty area.

The goal of ABC is to provide meaningful information to those seeking legal services to enable them to make informed decisions in selecting experienced counsel. To become certified as a bankruptcy specialist by ABC, an applicant must successfully complete a comprehensive day-long written examination covering (1) general bankruptcy/creditors’ rights law (2) legal ethics, and (3) substantive questions in the specialty area. In addition, each applicant must show significant experience in legal matters and a substantial dedication of their practice to such matters, as well as providing professional references and participating in at least 60 hours of continuing legal education over a three-year period.”

I am truly honored and proud to have achieved this. It was the result of a great deal of studying, and a great deal of work. Perhaps most rewarding is that five other debtor attorneys, and five creditor attorneys all recommended me for board certification. I have worked very hard to develop a good reputation among clients and my peers, and I am happy to see that it has not gone unnoticed.

You Can’t Stop the Bankruptcy Court for the Western District of Michigan!

Last Friday the Chief Judge for the United States District Court for the Western District of Michigan issued Administrative Order 13-088. This order will keep all Federal Courts open during the current government shutdown, and will make sure that the Bankruptcy Court remains operating. In the order, Judge Paul Maloney deemed all judicial officers and staff of the United States Bankruptcy Court necessary and essential. So what does this mean to you?

Bankruptcy Petitions can still be filed.

This is a big one for bankruptcy attorneys such as myself. Obviously if we can’t file bankruptcies, we don’t have any business. But it also means that if there is a foreclosure sale of your home scheduled, we can still file a bankruptcy and stop it. It means that the citizens of Grand Rapids and all of West Michigan still have access to the constitutionally guaranteed protections of the bankruptcy court.

Court Hearings will still occur.

There had been some question about whether or not court hearings such as confirmation hearings and meetings of creditors would still go forwards. This ensures that they will, so if you have a meeting of creditors coming up in your bankruptcy case, make sure you go. It also means that if you filed a chapter 13 bankruptcy and there is a confirmation hearing scheduled, it will go forward and your bankruptcy plan will have the full force and effect of the Bankruptcy Court.

New Bankruptcy Judges will be appointed.

In the same order, the courts are prohibited from hiring new personnel unless expressly authorized. Luckily, filling the two judicial vacancies in the bankruptcy court is now considered essential and it will go forward.

So overall, good news, but it does mean the bankruptcy court is still operating on a shoestring budget. This will likely mean delays in filings, delays in hearings and overworked staff. Hopefully the political theater will end soon and we can get back to business. But it is at least good to know that if you live in Grand Rapids, Lansing, Kalamazoo, or anywhere else in West Michigan, you can still file bankruptcy.

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.

Dave Ramsey’s Worst Advice Ever

Let me say first, I like Dave Ramsey. I enjoy his radio program and I find most of his advice to be  a dose of common sense that people are all too often lacking. I even agree with Dave that Bankruptcy should be avoided id possible, but today I came across some advice Dave gave out that made me start yelling profanities at my computer screen. So what is this terrible awful no good advice that turned me into a red faced brute? This:

“You never cash out a 401(k) or IRA to pay off debt, unless it’s to avoid a foreclosure or bankruptcy.”

If Dave had just stopped after You never cash out a 401(k) or IRA to pay off debt, I would wholeheartedly agree. Why is cashing out a 401(k) or an IRA to pay off debt bad advice? Well, let’s let Dave himself answer that:

“Let’s say you take $50,000 out of your 401(k). Do you know what happens next? They’re going to charge you a 10 percent penalty, plus your tax rate. If you make $75,000 a year, that puts you in a 25 percent tax rate, plus the penalty. That’s a 35 percent hit, and that’s how much of your money is going straight down the toilet.”

So both Dave and I agree that taking money out of a retirement plan to pay off debt is a terrible idea, but why on earth does Dave think you should do it to avoid Bankruptcy? I wish I knew, there is no good reason. Let’s look at what a bankruptcy could do in a situati0on like this:

  • Chapter 13 could stop a foreclosure and allow you to cure the arrears over time, AND let you keep your retirement savings.
  • Chapter 13 could allow you to repay most or all of your debts in one payment, AND let you keep your retirement savings.
  • Chapter 7 could eliminate most if not all of your debts, AND let you keep your retirement savings.
  • Either Chapter 7 or Chapter 13 would allow you to continue saving for retirement and free up more money to do so.

I can understand Dave’s idea that you should do whatever it takes to repay your creditors, but this idea is irresponsible. If for not other reason that those retirement funds are there for a reason — FOR RETIREMENT! If people don’t have those funds when they retire, they become reliant upon the government or go further into debt, so I just don’t see how anyone would benefit in that scenario.

Cashing out a retirement plan is not a solution, it is a stop gap measure. You are trading one creditor for another, because you may get Visa or MasterCard off your back, but the IRS will take their place. I don’t know about you, but I’d rather deal with Visa than the IRS. More often than not, people who cash out retirement plans still end up filing bankruptcy, except now they don’t have any retirement savings.

Obviously Dave Ramsey is a successful guy who has made a career out of giving financial advice, but that doesn’t mean it is always good advice. Dave himself went through bankruptcy and it helped to set him up for future success, and it very well could do the same for you. If you are thinking of taking money our of your IRA or 401(k) to avoid bankruptcy, you owe it to yourself to talk to a competent bankruptcy attorney first.

“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.

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.


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.