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Bankruptcy Law Blog

Monday, March 21, 2016

Bankrupt Rapper 50 Cent Being Probed for Financial Misconduct


Curtis James Jackson III, aka, 50 Cent, the infamous rapper who achieved commercial success in the music industry after running afoul of the law back in the day, may be in trouble again.

Jackson burst onto the music scene back in 2003 with a hit rap song "In Da Club," went on to sell more than 22 millions CDs and acted in a few films. As he acquired wealth, he even bought a 21-bedroom mansion with a home movie theatre and 8-car garage in Connecticut, formerly owned by one-time boxing legend Mike Tyson.

Somewhere on the road to riches, it seems 50 Cent took a wrong turn, as he filed for bankruptcy last July. The circumstances surrounding the bankruptcy are also curios as Mr.
Read more . . .


Wednesday, February 24, 2016

HGTV’s Kitchen Cousins File for Bankruptcy


Can debts incurred by fraud be discharged in bankruptcy?

We’ve all seen them. Home improvement shows in which a contractor or decorator comes in to transform a person’s house into his or her dream home. Just turn on HGTV and you will most likely find one playing right now. What seems like a dream come true, however, can become a nightmare if the renovation or redecoration is botched. In this situation, the contractor or decorator may be liable, but what if he or she doesn't have the money to pay the judgment? Well, that is where the bankruptcy court comes in, as they did in a case involving a notable pair from HGTV.


Read more . . .


Thursday, February 18, 2016

Stopping Foreclosure with a Bankruptcy Filing


Can I save my home by filing for bankruptcy?

Since the Great Recession of 2008, many individuals have had problems keeping up with their mortgage payments. In some cases, mortgage lenders have cut deals with borrowers by modifying the loan or agreeing to a short sale. However, most homeowners are tied to the terms of the mortgage contract and the provisions regarding default and foreclosure.

What is a mortgage foreclosure?



Read more . . .


Thursday, January 28, 2016

Relief on the Horizon for Student Loan Borrowers


Can student loans be included in a bankruptcy petition?

Discharging student loans in a bankruptcy petition have been restricted by law. However, recent cases suggest that appellate courts could may craft a broader definition of how much distress a borrower needs to be in before discharging student loans.

As has widely been reported, the amount of outstanding student debt has risen dramatically in the last decade. In 2005, the US Court of Appeals established a standard for discharging student loan debt in a bankruptcy. Since then, lower courts have ruled on the issue opening the door to the possibility of the Supreme Court weighing in on this issue.
Read more . . .


Friday, January 22, 2016

Trump Pushed to the Brink of Personal Bankruptcy in Past


Is personal bankruptcy only for the middle class?

When you think about personal bankruptcy you probably conjure up images of middle class people struggling to make ends meet.  While personal bankruptcy is available to help people in that situation, others, who are much wealthier and well known, also take advantage of this process.  Looking for a fresh financial start, celebrities and business people alike have filed for, or come close to filing for, personal bankruptcy.  Some of these individuals include entertainer Michael Jackson, Boxer Mike Tyson and businessman and presidential candidate



Read more . . .


Thursday, December 24, 2015

Dealing with Too Much Credit Card Debt


When credit cards first came into use, for many they seemed like a lifeline, enabling the purchase of necessary items before the money was in the bank. All too quickly, due to a combination of consumer overuse and the increasingly exorbitant interest rates charged by credit card companies, that lifeline put many in a stranglehold.

If you find yourself overwhelmed by credit card debt to the point that your financial (and perhaps even emotional) life has become unmanageable, now is the time to take some serious steps toward economic stability.
Read more . . .


Monday, December 21, 2015

Obtaining a Small Business Loan After Personal Bankruptcy


Will my personal bankruptcy affect my ability to get a small business loan?

 

You have become overwhelmed by personal debt and are considering filing for Chapter 7 or Chapter 13 bankruptcy, but, you are concerned about whether personal bankruptcy will prevent you from obtaining a small business loan in the future. This is a legitimate concern, but it is important to remember that while bankruptcy might make things more difficult, it will not make securing a loan impossible. 

 There are a few things that will make it easier for you to get the financing you need for your small business.
Read more . . .


Sunday, November 29, 2015

Student Loans and Personal Bankruptcy


Are student loans dischargeable in personal bankruptcy?

Today,   many people are struggling to pay back student loans while also struggling with other types of debt, such as credit card payments or medical bills.  This overwhelming financial burden can cause a person to seek out bankruptcy as a means of relief only to be told that they cannot discharge his or her student loan debt. 

Generally, the bankruptcy cannot free you of student loan debt, but there are limited circumstances where student loan debt can be discharged. 



Read more . . .


Monday, November 23, 2015

What Happens When a Co-Signer Files for Bankruptcy?

I recently co-signed on the loan for my son’s vehicle, and he recently filed for bankruptcy. Should I be worried?

Co-signing a promissory note can be a helpful and productive way to assist a friend or family member in obtaining a much-needed vehicle or personal loan – however, this benevolent decision can ultimately lead to possible financial woes for both parties in the event a bankruptcy occurs. Under the terms of the promissory note, a co-signor is responsible for repayment of the debt if the primarily borrower is unable or unwilling to continue paying –often the case when a debtor declares bankruptcy.

Co-signor liability in the event of a bankruptcy is determined based on the type of bankruptcy filed by the original debtor, which is limited to Chapter 7 or Chapter 13. In a Chapter 7 proceeding, an automatic stay is issued to halt any collection efforts by creditors. However, creditors may still pursue a co-signor, notwithstanding a discharge against the original borrower. To insulate a co-signor against liability in this instance, a borrower could reaffirm the debt or pay it off completely.

On the other hand, Chapter 13 proceedings offer greater protection to the co-signor. The court will initiate a “co-debtor stay” to insulate co-borrowers from liability and collection efforts during the proceedings. However, the court may eventually lift the co-debtor stay in the event the borrower fails to repay the debt under the repayment plan, or the creditor can show it will face “irreparable harm” if the stay remains in place.

In any event, there are options available to help co-signors avoid the fallout of a bankruptcy proceeding by the original borrower, and a bankruptcy attorney can help explain the available options for borrowers in this predicament.


Saturday, October 31, 2015

Avoiding Post-Bankruptcy Lending Scams

I just went through consumer bankruptcy, and seem to receive solicitations for loans and credit cards almost daily. Is this a scam?

It is no secret that the bankruptcy process will temporary impact the petitioner’s credit rating and eligibility for new financing. In the long-run, however, bankruptcy can significantly reduce outstanding debts and liens, leading to an overall brighter financial future. Recent filers should be warned, however, that unscrupulous lenders will take very opportunity to exploit bankruptcy petitioners, primarily due to the presumption that these individuals are “desperate” for credit and will accept virtually any interest rate offered. As experienced bankruptcy practitioners, we encourage you to maintain your newfound freedom from the grips of debt, and to hone your skills in spotting a lending scam before it can ever hit home.

Signs of a Scam

Scammers in any industry rely on the psychological vulnerabilities of their targets. Scams against the elderly, for example, often rely on the notion that elderly individuals live alone, need someone to talk to, and can be easily persuaded into anything with a casual, friendly conversation.

Unfortunately, the same is true with post-bankruptcy lending scams. In the weeks and months following the bankruptcy process, some debtors may feel hopeless and out of control of their financial futures. Using this to their advantage, scammers will entice borrowers to restart the debt cycle by entering into wildly unfavorable – and sometimes illegal – credit agreements, often with unthinkable interest rates and skewed repayment terms.

Other signs of trouble include unsolicited, relentless offers over the telephone or through the mail. In addition, loans and credit products promising to improve one’s credit score are generally correlated to unfavorable repayment terms targeting those in “desperate need” of financing – again, relying on the psychology of vulnerability.

The best bet? Stay on the straight and narrow, avoid pursuing new debts, and if an offer seems too good to be true, it almost always is.

If you are considering personal bankruptcy or have questions about how the process will impact your credit rating, please contact Padgett & Robertson today: 251-342-0264.


Friday, October 30, 2015

Basics of Chapter 7 Bankruptcy

What is Chapter 7 Bankruptcy and how does it work?

If you are overwhelmed by debt, you might be considering bankruptcy as a way out.  Chapter 7 bankruptcy can provide you with a fresh start if you are eligible. Our attorneys regularly determine if clients are eligible and assist them in the Chapter 7 bankruptcy process from inception to conclusion.

In order to be eligible for Chapter 7 bankruptcy, you must pass the means test.  This means that your income must be lower than the median monthly income in your state.  There are a number of exceptions to this rule under which you might also be able to qualify. 

If you pass the means test or fall into one of the exceptions, the Chapter 7 process requires that all of your assets be sold and that the proceeds from those assets be used to pay creditors in a specified manner. The process begins by filing a Chapter 7 bankruptcy petition with the bankruptcy court. 

As a debtor, you must disclose all of your financial information, including a detailed list of your assets and liabilities as well as your income and expenses. At this point, the automatic stay kicks in. The automatic stay stops most collection efforts by creditors.  Within 40 days of the submission, the court appointed bankruptcy trustee must hold a meeting of creditors. You must be present at this meeting, where the trustee and any creditors who attend will question you under oath. The trustee has 10 days from this meeting to decide whether to accept the case or find it to be abuse.

If the case is accepted, all of your assets, except exempt property, will be liquidated and used to pay your creditors. After the bankruptcy, all of your debts will be discharged, giving the debtor the fresh start you were looking for.  There are some debts that are non-dischargeable, such as tax debts and child support payments. You will still be responsible for these, even after the bankruptcy process has been completed.

The attorneys at Padgett and Robertson have extensive experience representing individuals in Chapter 7 bankruptcy cases.  If you are in the Mobile area contact us today at (251) 342-0264 for a free consultation. 


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Padgett and Robertson assist clients with Bankruptcy, Personal Bankruptcy, Consumer Bankruptcy, Chapter 7 Bankruptcy, Chapter 13 Bankruptcy and The New Bankruptcy Law in Mobile, Alabama and throughout southern Alabama. Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”



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Alabama State Bar Association Regulations require the following: "No representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers." 11 U.S.C. 528 of the U.S. Bankruptcy Code requires the following: "We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.”