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Bankruptcy Law Blog

Thursday, June 23, 2016

Beware of Payday Lenders


What is the government doing to rein in payday lenders?

The Consumer Finance Protection Bureau recently proposed new rules aimed at bringing payday lenders and other short-term credit providers under federal jurisdiction. Consumers who are strapped for money often use these lenders as a short-term fix, but invariably wind up with long-term problems and falling into debt traps. While these lenders are currently regulated by the states, borrowers are often the target of lending abuses.

"Too many borrowers seeking a short-term cash fix are saddled with loans they cannot afford and sink into long-term debt," said CFPB Director Richard Cordray.

What are Payday Loans?

Payday loans are small, short-term loans of about $350 that are supposed to be repaid when a consumer gets his or her paycheck.


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Tuesday, May 31, 2016

The Affect of Loans on Credit Ratings


How do loans affect your credit rating?

In understanding how your loans affect your credit rating, it is important to grasp the differences among various types of debt. Almost everyone in our society lives with some debt. Typically, even very wealthy people purposely carry some debt because they understand the value of being creditworthy and the financial advantages of paying off some things over a prolonged period of time. The rest of us usually become aware early in our lives that our credit rating will affect us when we attempt to make significant purchases, such as a car or a home, and that it is in our own best interests to maintain a good credit score.             

Types of Debt

Debt is characterized into two primary types: secured and unsecured.


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Monday, May 16, 2016

How to Stop a Wage Garnishment


Does filing Chapter 7 bankruptcy stop a wage garnishment?

Many individuals who find themselves unable to pay their debts face the potential of having their wages garnished. A wage garnishment is a court order directing an employer to withhold part of an employee's earnings and pay it directly to a creditor until the debt is paid off.

In Alabama, most creditors need to obtain a court judgment stating that you owe them money in order to obtain a wage garnishment. Moreover, if you lose a lawsuit and a money judgment is entered against you, the party that prevailed in the lawsuit can also garnish your wages. Your wages can be garnished without a judgment, however, for unpaid income taxes, court ordered child support, support arrearages, and defaulted student loans.


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Saturday, May 7, 2016

Law Student Allowed to Discharge Bar Study Loan


Can you be relieved of any education related loans in bankruptcy?

Student loan debt is a overwhelming problem in this country.  In fact, it has been calculated that the average person has approximately $28,950 in student loan debt to pay back to the government.  Those who pursue careers as professionals, such as physicians and lawyers, often have a much greater amount than that.  Some have hundreds of thousands of dollars in loans.  Unfortunately, student loan debts are generally considered nondischargeable in bankruptcy (with certain exceptions).


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Monday, April 25, 2016

Foreclosures Continue to Plague Calhoun County


Why do foreclosures remain stubbornly high is some parts of Alabama?

The so-called Great Recession of 2008 is slowly fading into the rearview mirror of the nation's psyche. In Alabama and across the nation, the financial crisis resulted in a number of homeowners losing their homes through foreclosure. While foreclosures in the state are not as widespread as they were during the height of the housing market collapse, some residents of Alabama still face the potential of losing their homes.

Foreclosures in Calhoun County

One particularly hard hit area continues to be Calhoun County, where home


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Wednesday, March 30, 2016

Credit Card Debt: An Embarrassment, But Not of Riches


Who holds the highest revolving debt in the United States?

Most of us are well aware that revolving debt, including credit card debt, home equity loans and personal lines of credit, has risen sharply in this country. For many of us, this is a very personal issue since our own revolving debt is frighteningly high. According to a study by ValuePenguin, a New York-based financial company, by December of 2015, revolving debt had risen to $936 billion, up from $930 billion the month before. Credit card debt has reached its highest peak since the 2009 recession.

Ferreting Out the True Statistics

The study showed that average households in the U.
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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.
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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.


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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?



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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 . . .


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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.”