Bankruptcy

Many people assume that filing for bankruptcy will mean losing everything they own. They envision the government holding a giant yard sale with all the proceeds going to creditors and nothing left over for the person who filed. 

Maybe that’s what bankruptcy looks like in old-timey movies, but modern-day bankruptcy is different. Most Alabamians who file for bankruptcy are able to hold on to their house, a car, and lots of personal belongings. 

How? 

Debtors Read more . . .

The Boy Scouts of America organization is making some big changes. The 108-year-old organization is dealing with declining membership numbers and allegations of sexual abuse. The organization is under so much pressure it is reportedly considering Read more . . .

It’s the end of an era. Sears has filed for bankruptcy. For those of us of a certain age, this is nothing short of a tragedy. But like with all bankruptcies, there is a silver lining. 

Although it was based in Illinois, Sears was beloved by Alabamians and other across the South because it would deliver anything and everything right to your door.
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Did you ever have that dream where you show up at school only to realize there is a big test that day and you didn’t study for it? Some psychologists say this is your brain reminding you not to forget something important that is coming up in your waking life. Others say it is your brain’s way of saying you regret something. Freud probably thought it had something to do with being in love with your mother.

Whatever it means, it’s terrible. Forgetting about or feeling unprepared for a test is not a good feeling.
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One of the hardest things to deal with after a loved ones dies is the fact that life goes on without them. Even though they are no longer at your side, you still get telemarketers calling for them, Facebook notifications when they are tagged in a photo, and mail addressed to them. Many widows and widowers even get bills for the end of life care their spouse received addressed to the deceased spouse. It’s like rubbing salt in an open wound, and it is also the source of a lot of anxiety.

Just who is responsible for medical debt that accrued at the end of a loved one’s life? The answer to this question is every lawyer’s favorite answer: it depends. Whether a surviving spouse is responsible for paying for a deceased spouse’s end-of-life medical care depends on how the debt is structured and whether the deceased spouse’s estate has enough money in it to cover all its costs.

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The average Alabama resident has $7,105 in credit card debt. This is a significant chunk of change, which is probably why credit card debt is one of the number one reasons people file for bankruptcy.

Unlike many other kinds of debt, credit card debt can be fully discharged, or wiped out, through the bankruptcy process. Most people who are struggling to pay off credit card debt prefer to file under Chapter 7 rather than Chapter 13 of the bankruptcy code because they want their credit card debts forgiven.

Forgive and Forget or Pay it Back?

Whether your credit card debt can be forgiven typically depends on what chapter of the bankruptcy code you file under.

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One of the first things you will have to do if you decide to file for bankruptcy is make a list of all of your debts and assets. Sounds simple, right? For most people it is. But every once in awhile we work with a client whose unique assets present something of a challenge. Sometimes, we even help clients discover assets they didn’t even know they had.

Antiques & Collectables

Thanks to television shows like Antiques Roadshow on PBS and American Pickers on the History Channel, people are starting to realize that things they have lying around the house may be more valuable than expected. That box of old toys in the attic might contain a hidden gem, and the old car out back that hasn’t run in decades may be rusty gold.

We help clients who think they might have antiques or collectables that are worth a significant amount of money get their items appraised and sell them to pay off debts.

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During the Great Recession many people delayed going into the workforce during the bad economy by staying in school. Others went back to school because their job was eliminated or it was clear there was no path for advancement. Now, more and more clients are asking us what they can do to get rid of their student loan debt. Unfortunately, the answer is not much. But that may be changing.

According to the experts, the typical graduating senior has about $30,000 to $35,000 of student debt. That is a substantial sum, but it is actually people with less debt that are struggling the most. People who take on student debt, but do not finish a degree are at the greatest risk of defaulting on their loans and declaring bankruptcy.

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The internet has given rise to many online services purporting to help you be your own lawyer. They market themselves as a good low cost or even free option so long as you are willing to roll up your sleeves and put forth a little effort. Seem too good to be true? Unfortunately, they often are when it comes to filing for bankruptcy.

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The biggest downside to filing for bankruptcy is that it can make it hard to get access to credit in the future. This may not sound like a bad thing since going into debt is what pushed you toward bankruptcy, but it makes it difficult to pay for large purchases most people can’t purchase outright. Imagine never being able to finance a car, buy a house, or apply for student loans again.

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Abraham Lincoln once said, “I don't think much of a man who is not wiser today than he was yesterday.” With this mindset, Old Abe would be quite impressed by people who have gone through bankruptcy. It is not a passive process, but an active learning experience. It’s part School of Hard Knocks and part legally-mandated training.

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