Wednesday, June 10th, 2009
Peter Gitundu asked: In most countries around the world, bankruptcy is either voluntary or involuntary. A debtor can file a petition with the official receiver, otherwise known as the insolvency and trustee service. Along this petition, the debtor must also submit a copy of the statement of affairs which is simply a summary of the assets involved. If the filing is done voluntarily, the insolvency period commences immediately. However if a petition is filed against the debtor by the creditors, the court may take time to determine when the period begins.
In some cases, bankruptcy is delayed for an extra two to five years. This is especially done by the official receiver in cases where the debtor fails to comply with the demands of the court. Financially distressed persons have restrictions such as, they are not allowed to travel outside their country. They are also not allowed to keep some assets once the petition has been filed.
There are many options available for bankruptcy filing. One should always consult with an expert on these matters before they can file for insolvency. It is easy to get experts online which is cheaper and fast. Once a person has filed a petition, the official receiver appoints a trustee to monitor the case.
An insolvent person can remain in this state for a period of three years if there is no objections. Some objections such as failure to disclose all debts to the creditor during the 341 meeting can extend the bankruptcy period to 5 years. Other objections such as failure to disclose change of address may extend the period to 8 years.
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Sunday, June 7th, 2009
Peter Gitundu asked:
Bankruptcy gives you an opportunity for a fresh start financially, but it does not come so easily. This is because, you have to part with some money to make the process successful. To cater for the services that you will receive from the court, you will need to pay some specified fees through the court clerk.
If you decide to work with a lawyer during the process, remember that he too will need to be paid. Most of the other charges you will have to cater for will depend on which type of petition you want to file. The charges for each chapter of the law are very different from all the others. They are very specific to the circumstances leading to the insolvency.
Other fees that must be catered for are re-opening fees. These are not very commonly talked about because not many cases are closed only to be revisited later. So if you decide to terminate a case halfway through then decide later on to have it followed to completion, you should be ready to pay for this.
If your case falls under chapter 7, the reopening fees are $200. Those for chapter 13 are $150. For the chapter 7 charges, you have to pay up front immediately after reopening the case. As for the other chapter, you can choose to file for a petition asking to be allowed to complete paying for the fees in installments. This means that monthly installments for your debt settlement will include these charges.
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Saturday, June 6th, 2009
Smith Bryan asked: People who took out bad mortgages or bought houses they couldn’t afford once interest rates reset shouldn’t be helped. “I acted responsibly,” they said. “Why should someone who acted less responsibly than I did be rewarded by a better deal then I got?” Others say that the collective impact of these mortgages going into foreclosure and people filing bankruptcy have such a negative effect on the economy that something needs to be done to staunch the hemorrhaging.
The problem is that all of the solutions discussed thus far seem to carry a high price tag. Buying the bad mortgages would cost hundreds of billions, as would giving government benefits directly to people with bad mortgages.
Also when it comes to mortgages, there are many people that have been scammed by a mortgage broker, promised one loan and given another. To the untrained eye, unless those flaws are obvious in the loan documents, the future holder of the loan is not liable for that claim. If proper assignments were not completed until just in time for court, the consumer may have plenty of rights to offset the claims made by the servicer. But consumers will never know the option is there if the lender can hide the chain of assignments behind smoke and mirrors. Bankruptcy courts are federal courts. Federal courts are constitutionally limited to addressing only a case or controversy between parties who have a true stake, something to win or lose in the outcome. Someone claiming such a stake has to be able to prove it.
Recently decisions have been made requiring the lending industry to disclose what it has been doing with loans. It’s a small thing but very important. Homeowners rarely understand how their loan ended up where it is. Sometimes they have conflicting information about who is entitled to the payments. Servicers don’t always talk to each other coherently when they pass paper between themselves, so how can a consumer not trained in mortgages be expected to understand it? Consumers may discover they have rights and claims which should be vindicated. Consumers don’t know when their rights are violated, in fact, they often are outraged by things which are lawful while only confounded by the unlawful. A lot of these consumers never find out any of this until they file for bankruptcy and are being foreclosed on.
Bankruptcy filing is or can be the most powerful foreclosure tool if used properly. In fact bankruptcy is probably the most powerful financial tool one can use in this country. And in these tough economic times, it’s not so it’s a question of whether a bankruptcy filing can stop foreclosure, but more of a question of what else cans bankruptcy due in addition to stopping the foreclosure. For instance, it may be possible to attach the mortgage itself and entirely strip off the property if there is an enforceability issue. Likewise, if new legislation is passed, arrears may no longer be an issue since the home loans will be entirely restructured into one mortgage reduced to a fair market value, with a lower interest rate, a lower payment, and spread over 40 years.
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Thursday, June 4th, 2009
Are we all just one medical problem away from Bankruptcy?
As a Board Certified Consumer Bankruptcy Attorney, I speak with many people about filing for bankruptcy and their debts. Medical Bill bankruptcies are a very real and growing problem. Don't get me wrong, this is not a new phenomena that suddenly came to rise like the epidemic or pandemic known as swine flu. People have always had to deal with medical bills when either they or a loved one became sick or were injured. However, it seems that over the last few years, medical bill bankruptcies have been on the rise.
I define a medical bill bankruptcy as a consumer bankruptcy where the medical bills incurred either directly or indirectly caused the individual to seek bankruptcy protection. Many people are forced to file for bankruptcy protection just for one illness or an injury that occurred after they lost their health insurance. Alternatively, other people file for bankruptcy after a long series of financial issues which started after a job related injury or medical problem and over time the financial hole became deeper and deeper.
Sometimes these medical bills are paid by health insurance or worker's compensation insurance, but, when a person is out of work because of a medical issue, how are they going to pay their other monthly obligations, like the mortgage, car payment, insurances, etc. What about the Dr. visits, co-pays, and prescriptions? What about the procedures that are not covered under the insurance policy? Can you imagine making a medical decision based upon whether your health insurer will cover the procedure because you cannot afford it? What if you cannot afford the procedure?
What about consumers who lose time from work because their spouse or child is sick? The stress of the illness alone will cause that person to become sick. Usually, that same individual may lose their job if they miss too much time from work. If you lose your job, you may also lose your health insurance. Even though health insurance isn't what it used to be, any health insurance is better than no health insurance. Still, many of our clients are incurring a significant amount of medical bills despite having private health insurance. They still face co-payments, sky high deductibles and non-covered procedures.
If we can learn one thing from medical bankruptcies, it should be that the health care system is broken, and it needs to be fixed. I don't know how to fix the problem, but I wish I could. I can only see how it changes people's lives forever.
Let's face it, bankruptcy is a very emotional issue. When you tack on medical bills, debt collectors hired by the medical providers, and the stress of knowing you cannot pay your doctor, it gets a bit overwhelming. Families on the brink of destruction often come into my office to discuss their horrifying experiences. No one wants to file for bankruptcy protection; however, bankruptcy provides the only glimmer of hope for many families. Bankruptcy can provide that fresh start that people need . I believe people are resilient and can bounce back from unbelievable circumstances.
This post was submitted by Carmen Dellutri, Esq., founder of The Dellutri Law Group, P.A. Currently, the firm has offices in Port Charlotte, Fort Myers, Naples and Sarasota. Mr. Dellutri also sits on the Board of American Board of Certification. Mr. Dellutri is also one of the founders of the Bankruptcy Law Network, Debt Law Network, Credit Law Network, and Mortgage Law Network. Mr. Dellutri also writes for the firm's personal injury litigation blog and the firm's mortgage modification blog.
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