Archive for the ‘Filing Bankruptcy’ Category
Saturday, March 27th, 2010
The Washington Post reported recently that the community organization ACORN (Association of Community Organizers for Reform Now) may be on the verge of filing for bankruptcy.
The group has, since its founding in 1970, devoted itself to helping low-income Americans find housing and to bringing voters from under-represented groups to the polls. Last fall, though, things took a turn for the worse for the group. Here’s what happened:
- Rising criticism: In the months after President Obama’s election, critics of ACORN apparently accused the group of fraudulent registration of voters and even internal embezzlement. And the bad press got worse once Obama took office.
- Video embarrassment: Last fall, two conservative activists posed as a pimp and prostitute and got advice from an ACORN counselor about how to hide their line of work from the government so they could buy a house for business purposes. They recorded the incident with hidden cameras and released them to news outlets, which caused serious controversy over ACORN’s aims and methods.
- Dried-up funding: After the video’s release, many of ACORN’s donors (including larger organizations and the government) reportedly withdrew much of their financial support, leaving ACORN underfunded.
- Withdrawal of state chapters: The Post notes that some of the bigger state chapters of ACORN (notably New York and California) have broken off from the parent organization and formed individual community support groups without the ACORN name.
Though representatives of ACORN itself have apparently not made any public comment about bankruptcy plans, a glance at the events of the past few months leaves little doubt that such a step would not be entirely surprising.
Effect on Consumers
Sources indicate that ACORN plans to continue dedicating itself to aiding and advocating for low-income Americans; however, they may do so under a new name and organization, both of which could be established during the bankruptcy process.
And if you’re worried about finding guidance through the home buying process, there’s no need to panic: the reorganization of ACORN leaves plenty of other groups and organizations available.
If you’re interested in becoming a homeowner but aren’t sure how to begin the process, visit the government’s Department of Housing and Urban Development (HUD) page for links to helpful resources and information on how to get moving toward your goal.
Posted in Bankruptcy News and Events, Filing Bankruptcy, acorn, acorn bankruptcy | Comments Off
Friday, March 12th, 2010
A case decided by the Supreme Court this week settles a question of attorneys' free speech rights raised by a Minnesota law firm concerned about restriction in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), according to the Washington Post.
Here are the pertinent details:
- The law states that bankruptcy lawyers are prohibited from advising clients to take on more debt before filing for bankruptcy. In theory, the restriction is meant to prevent advice that would lead to actions that might constitute fraud under U.S. bankruptcy laws.
- The question raised by the Minnesota law firm was one of free speech for lawyers. Apparently, the firm suggested that the aforementioned restriction amounted to an unconstitutional violation of the free speech rights of bankruptcy lawyers.
- The court decided that the law was not, in fact, unconstitutional, and that lawyers can give their clients any advice that does not promote defrauding the bankruptcy court.
- Filing incomplete or inaccurate information
- Attempting to pay a "favorite" creditor in full before filing for bankruptcy
- Failing to disclose assets or expected income
- Attempting to “give away” assets before filing
The Broader Issue
While the law firm’s concern with free speech may seem piddling here, in the context of bankruptcy cases, it has merit. In some cases, as the WSJ article points out, taking on certain kinds of debt immediately before a bankruptcy filing could benefit both the filer and his or her creditors.
For example, refinancing a troublesome mortgage to better allow a debtor to make payments could benefit all parties. The Supreme Court Justices reportedly acknowledged the truth of this and agreed that taking on more debt can, at times, be the wisest decision for a potential bankruptcy filer.
But, the court noted, the law can be read to mean that bankruptcy lawyers are restricted only from giving their clients advice that would lead to bankruptcy fraud.
What Constitutes Bankruptcy Fraud?
Bankruptcy fraud is a serious matter – in fact, it can lead a court to throw out your case (and thus eliminate your chances at receiving a debt discharge) and earn you fines and jail time. This is one reason why working with a bankruptcy lawyer can be helpful.
Bankruptcy fraud includes:
Posted in Bankruptcy Law, Bankruptcy Lawyers, Filing Bankruptcy, Setting the Record Straight about Bankruptcy, Supreme Court | Comments Off
Wednesday, February 10th, 2010
A refreshing article published recently in the Kalamazoo (Mich.) News underscores the role bankruptcy plays in helping filers overcome debt and draws attention to the oft-neglected question of when is the best time to file.
The article points out that too many people try to avoid filing bankruptcy at all costs and wait until they are financially desperate to file. Unfortunately, this is not always a good plan, as it may mean that filers use up retirement accounts (which are often exempt from creditors in bankruptcy court) and set themselves back for their post-bankruptcy life.
The article provides a helpful list of warning signs that filing for bankruptcy may be a good option sooner rather than later:
- Borrowing money to pay debts: Whether you're using one credit card to pay another, relying on payday loans or hitting up family and friends for cash, this is a bad sign.
- Dipping into retirement funds to pay debts: Again, your qualified retirement savings will likely be safe in bankruptcy court and heavily taxed if you take it out early. And once you spend that money, it's gone.
- Falling short of minimum payments: If you cannot make even a minimum credit card payment each month, bankruptcy may be a good option.
- Selling your goods to pay debt: If this is a one-time thing and you're shedding appliances you can do without, you may be fine. But if you're consistently scouring the house for stuff to trade for cash, you may be in trouble.
- Getting contacted by bill collectors: Phone calls and mailings from your creditors, especially when they start to add up, can be halted by bankruptcy's automatic stay.
- Having your wages garnished: If creditors are going straight to your employer to collect on debt, take it as a warning sign.
- Dealing with increased tension or stress: Money can be tough on your home life. Whether you're having trouble sleeping, fighting more or just generally stressed out, you may need a serious solution for your debt.
A New Beginning
It's important to understand that filing for bankruptcy does not mean admitting defeat or failure. Rather, it is a proactive and difficult decision you must make to save your financial future. Filing for bankruptcy can:
- Help you save your retirement fund so that you’re not destitute or a burden on taxpayers in your golden years.
- Give you a chance to start over financially and the knowledge you need to make better decisions in the future.
- Stop stressful contact from creditors.
Of course everyone's financial situation is different, and this post is not meant as advice for any one situation. If your finances are at their breaking point, considering contacting a local bankruptcy attorney for an evaluation.
Posted in Filing Bankruptcy, Setting the Record Straight about Bankruptcy, automatic stay, retirement accounts, when to file bankruptcy | Comments Off
Monday, November 9th, 2009
Health care costs and filing bankruptcy rates are more closely related than you might think. Check out this chart that shows the skyrocketing costs of health. These costs could be driving many people to file bankruptcy.
Filing bankruptcy and the influence of medical care costs
Skyrocketing health care costs have many people considering filing bankruptcy.
Add this infographic to your site:
Posted in Bankruptcy and the Economy, Filing Bankruptcy, health care, statistics | Comments Off
