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November 2011 Archives

Caregivers and Debt

Approximately 1/5 of Americans are providing unpaid care to a family member or friend. The sad fact is that while Americans are living longer, many elderly require help to survive. Assisted living is expensive. Trust me, I was just looking into it. In-home help isn't cheap either. So, most have to turn to family or friends for help. These family and friends typically provide help without pay.

My car has been repossessed! Can Bankruptcy help?

Maybe, but the timing of your bankruptcy and your behavior are critical. Once an individual filed for bankruptcy, the individual is protected by the automatic stay. The automatic stay prohibits any further collection activity against the individual. Furthermore, bankruptcy law prohibits anyone from controlling the property of the individual who filed bankruptcy.

Hope for homeowners who are struggling to make their house payments

Since tomorrow is Thanksgiving, I wanted to do a blog today about giving thanks and hope for the future. Because to me, bankruptcy really is hope....a fresh start....the beginning of a new life. Then I looked at the foreclosure list at McLennan County Clerk's foreclosure website,http://www.co.mclennan.tx.us/cclerk/foreclosure.aspx. On December 6, 2011 over 75 homes are scheduled to be foreclosed on in McLennan County alone. Then I read an article that states that foreclosures have doubled since 2010 (see http://www.totalbankruptcy.com/bankruptcy-news/news-section/home-foreclosure-rates-skyrocket-800983726.aspx) and it is hard to find that hope and reason for thanksgiving. There are too many negative stories and realities out there to find hope.

Debtors Beware! Bankruptcy Law may protect you but your OWN behavior may cost you!

If your vehicle has been repossessed and you file bankruptcy prior to it being sold at auction, the creditor must return the vehicle. Failure to return the vehicle is a violation of the automatic stay. However, in a recent decision out of Houston, Texas, the bankruptcy court looked at both the creditor and debtor's behavior. In this case, a debtor's vehicle was repossessed (but not sold at auction yet) prior to filing bankruptcy. The debtor filed for bankruptcy and his attorney demanded the vehicle be returned. The creditor refused. The debtor's attorney asked the bankruptcy court to order the return of the vehicle. The creditor still refused. Finally, the vehicle was returned. The debtor and his attorney asked for $25,000.00 in damages due to the delay in returning the vehicle. The bankruptcy court did find a violation of the automatic stay. However, the court stated that due to the Debtor's behavior prior to the repossession, it would only award approximately $7,000.00 in damages. The bankruptcy court stated:

 R.D. Affordable Foreign Auto Repair ("R.D. Auto") repossessed Jackson's automobile prior to bankruptcy. Jackson owed R.D. Auto money for services performed on the automobile. Ware, owner of R.D. Auto, went to extraordinary lengths to accommodate Jackson's precarious financial situation, but eventually repossessed the automobile for nonpayment. Jackson paid nothing on the amount owed for many months prior to bankruptcy, despite being employed. Simply put, Jackson took advantage of Ware's kindness and, understandably, Ware eventually became quite upset. This does not excuse Ware's refusal to turn over the automobile after Jackson filed for bankruptcy. Ware's violation of the automatic stay was egregious—at one point disregarding a court turnover order until a United States Marshall appeared to retrieve the automobile.

Property Taxes

If you are over 65 years old or disabled, then there is help if you don't have enough money to pay property taxes.

If You Can't Afford Your Home, Is Foreclosure Right for Your Family?

I was reading an article recently that predicted that there are so many families that cannot make their house payments that the foreclosure back log will last at least 3 years. In McLennan County, there were over 80 homes scheduled to be sold at a foreclosure sale in the month of November alone. In my Waco bankruptcy law office, I see many individuals who are behind on their home loans. I try to work with them to find the best solution for their family. While I have helped families in Waco and the surrounding areas save their homes through bankruptcy or loan modifications like the Home Affordable Modification Program (HAMP), other families have come to the difficult decision that they can rent cheaper than trying to continue to save their homes. If you can't afford your house payments or the hidden costs of owning a home, foreclosure may be the best option for you. Families across the nation are coming to the same decision about their homes.

How Long will it Take You to be Debt Free? Use a Credit Card Repayment Calculator!

Are you overwhelmed by credit card debt? Unable to sleep at night? Worried about checks bouncing? Drifting without a plan? You are not alone. The average American family owes approximately $15,799.00 in credit cards. So, if you are the typical American family and you want to be debt free, you need a plan.

The Military and the Means Test

 Happy Veterans Day! At The Kehl Law Firm, we appreciate all the servicemen and women who have helped keep us safe. Today I am going to talk about some of the ways Congress has decided to help make bankruptcy easier for our veterans and active military who are overwhelmed by debt in the United States and specifically in Central Texas. In 2005, Congress drastically changed the U.S. bankruptcy laws. One of the major changes is an income test called the means test that was added to the bankruptcy code. Basically, the test looks at the last 6 months of gross income for the household filing bankruptcy and compares the income for households the same size in the same county. If you have more income that households the same size in the same county, there is a presumption that you cannot file a Chapter 7 bankruptcy. As a bankruptcy lawyer in Waco and Killeen, the reality is that I have filed numerous Chapter 7 bankruptcies for Central Texas families who "make too much to file bankruptcy" and defeated the presumption. They all have Chapter 7 discharges now. However, there are two ways to help Veterans and Active duty military with the means test. First, the Means Test Does Not Apply to Disabled Veterans One way Congress has tried to help veterans is by stating that disabled veterans do not have to take the income test. If your disability is rated at least 30% and more than half of your debt was incurred while you were on active duty or performing a homeland defense activity, you don't have to take the means test. This means you get to file for Chapter 7 bankruptcy regardless of how much income you make. Second, being on active duty might overcome the presumption for the means test If you are not a veteran and your income is high enough to cause the presumption that you should not be allowed to file a Chapter 7 bankruptcy, you might still be able to file for a Chapter 7 bankruptcy if you can show a special circumstance in your case. Although "special circumstance" is not defined in bankruptcy law, Congress has cited as an example of a special circumstance, "a call or order to active duty in the Armed Forces." This means that if you have extra expenses because of your military service that wouldn't otherwise be counted for purposes of the means test, you may be able to overcome a presumption of abuse -- and be permitted to file for Chapter 7 bankruptcy. Our active military and veterans have gone above and beyond the call of duty to protect this great country. I am honored to be able to give back. If you are drowning in debt, let us help. We offer military discounts and will work with you to find the best solution for your individual circumstances. Call 254-633-2876 or email us at info@thekehllawfirm.com today for a FREE, no-obligation consultation to see what an experienced Central Texas bankruptcy attorney can do for you! We offer evening and Saturday appointments. Sign up for our Bankruptcy Information Mailing List.  This list is for those who have questions about bankruptcy as well as clients of The Kehl Law Firm, P.C.  Sign Up

The Military and Foreclosure Class Action Lawsuits

In honor of Veterans' Day 2011 this Friday, I have dedicated my blog to the military this week. Earlier this week, I discussed the Servicemembers' Civil Relief Act (SCRA) and the protections it offers our military and their families. The SCRA states when a member of our military is on active duty or was just recently been released from active duty, a lender may not foreclosure on a home, car, or other collateral without first obtaining a court order. This protection is significant here in Central Texas since most foreclosures on homes and repossessions of cars in Texas can happen by law without a court order. Please note that the SCRA does not state that the foreclosure or repossession cannot occur, but rather the lender must get a court order first. By obtaining a court order first, the foreclosure and repossession are delayed but not avoided. So, what are your remedies when the SCRA is violated and you lose your home or car because a court order was not obtained first? Unfortunately that is what is happening around the nation and people are starting to file class action lawsuits against the lenders. However, the remedies from these class action lawsuits are not always enough. I had a client in the Ft. Hood / Killeen area who was involved in one of the class action lawsuits and she received $200.00 in damages. See http://www.myguidon.com/index.php?option=com_content&task=view&id=13697&Itemid=39. There are numerous other wrongful foreclosure class actions popping up against Citimortgage (see http://consumerist.com/2011/07/lawsuit-alleges-citi-illegally-foreclosed-on-thousands-of-soldiers-homes.html) and JPMorgan (see http://news.firedoglake.com/2011/04/24/jpmorgan-settlement-continues-their-persistent-attention-to-just-one-type-of-foreclosure-fraud/). Violations are so rapid that one law firm is looking for people's stories regarding other mortgage companies which have not been sued yet. And the mortgage companies are not alone as defendants in these lawsuits. Ford has been sued regarding repossession of vehicles and interest rates. (see http://www.topclassactions.com/lawsuit-settlements/lawsuit-news/1400-servicemembers-file-scra-class-action-lawsuit-against-ford-). However, all of servicemen and women and their families lost their homes or cars due to falling behind on their payments. While the Servicemembers' Civil Relief Act was violated and they may get some damages for that, even if the SCRA was followed, the repossession or foreclosure might have still happened. The SCRA just delays it while a court order is obtained. If these individuals and their families filed for bankruptcy, they might have been able to save their homes and cars. And that is the real tragedy. If you are behind on your house or car payments, call 254-633-2876 today or email us at info@thekehllawfirm.com for a FREE, no-obligation consultation to see what your options are. Once a foreclosure or repossession happens, it may be too late. Don't wait. Sign up for our Bankruptcy Information Mailing List.  This list is for those who have questions about bankruptcy as well as clients of The Kehl Law Firm, P.C.  Sign Up 

Payday Loans and the Military

In my experience as a Waco Bankruptcy Attorney, payday lenders are the worse people you can owe money to. Interest and penalties can run up to 800% and many individuals complain that they just can't seem to pay them off. I have received numerous frantic calls from clients worried because a payday lender has threatened to put them in jail or told the client that I was lying and bankruptcy laws can't help them. I have yet to see a client go to jail due to a payday loan or a payday that isn't covered by the bankruptcy laws. Since my bankruptcy office is so close to Ft. Hood and Killeen, I see payday lenders prey on our military servicemen and women all the time and it is a tragedy. A few years ago, Congress passed a law making it more difficult for payday lenders to make loans to our military personal, but it is still happening especially on the internet. Just try googling payday loans and military. I learned about some companies that will give special discounts to the military. The law prohibited interest rates of more than 36% to military personal and their families. It also limits the payday lenders ability to ask for a post-dated check or banking information. Furthermore, the law prohibits:

Security Clearance and Bankruptcy

Are you overwhelmed by debt but scared to file bankruptcy because of fear that you might lose your security clearance? The reality is that filing bankruptcy might be the best thing you can do for your security clearance. Who is more likely to sell state secrets for money or accept a bribe--the person with large amounts of unpaid debt or the person who wiped out their debt by filing bankruptcy? The reality is that high credit card balances are more likely to hurt your record than a bankruptcy. Filing bankruptcy won't, by itself, affect your security clearance. However, the circumstances surrounding your decision might. If you file bankruptcy every few years to wipe out your excessive credit cards, your security clearance could be affected, not by the bankruptcies per se, but due to your continued history of poor judgment with regards to money. On the other hand, if you are transferred and your home is going to foreclosure, filing bankruptcy may be a smart decision to avoid tax consequences and possible lawsuits due to the foreclosure. In other words, each case is looked at individually and losing your security clearance due to filing bankruptcy is not a guarantee. In fact, it rarely happens. As a bankruptcy attorney near Ft. Hood and Killeen, I have filed bankruptcy for many Ft. Hood soldiers, civil employees, and contractors who have retained their security clearance. Many of them asked for letters to their commanding officers explaining that they are filing bankruptcy. They want these letters to demonstrate that they are dealing with the problem to help their security clearance. They want to show their commanding officers that they are not sticking their heads in the sand. It is important to show that you are dealing with your debts before losing your security clearance, because, once you have lost it, it may be difficult to get it back and even filing bankruptcy may not help you. I know of one case where the individual had already lost his security clearance due to excessive debt. He attempted to file bankruptcy to regain his security clearance and was denied. He did not lose his security clearance due to the bankruptcy. He lost it because he had excessive debt and was not dealing with the problem. Maybe that is the lesson. It is better to deal with your debt problem to reduce the likelihood that you are a security risk. Even various branches of the military have stated that filing bankruptcy does not automatically mean you will lose your security clearance and might even help it. The Air Force Academy's website specially addresses security clearance. See http://www.usafa.edu/superintendent/ja/bankruptcy.cfm?catname=JA.

Protection for the Military from Creditors: Servicemembers' Civil Relief Act

Since Friday is Veterans Day 2011, I thought in tribute to our military I would do some blogs this week about bankruptcy and our military. It is impossible to thank our military and their families enough for the service they provide. It is unfortunate that the military are targeted by so many predatory creditors. Having an office so close to Ft. Hood, I have helped many active military and veterans and their families find relief from creditor harassment and lawsuits under the Bankruptcy code and the Servicemembers' Civil Relief Act (SCRA).

A New Hope for Relief From Student Loans?

In my bankruptcy practice, I frequently get asked if bankruptcy can help with student loans. Unfortunately, in Waco, Texas bankruptcy isn't really a viable option to help with student loans. However, there may be a new hope. Last week, President Obama proposed a new plan to help alleviate the burden of student loans.  This new proposal helps but it is a far cry from a plan that will fix the student loan industry.

Debt Collection FAQs

Are you behind in paying your bills? Is the phone ringing off the wall? Are you afraid to go to the mailbox? Does your credit report continue to have old charged off debt reappearing even though you have disputed them? If this sounds like you, read on because you may be having problems with a debt collector.

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