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August 2012 Archives

Saving Money on Healthy Foods

Unfortunately medical bills is one of the most common reasons people file for bankruptcy. With approximately 70% of Americans living paycheck to paycheck, most of us are one medical catastrophe from being overwhelmed by medical bills. It is estimated that one in five American struggled with medical debt in 2011. The bottom line: Health care is expensive, so you need to take preventive measures to ensure you stay healthy. One of the best preventive measures is eating healthy foods, but how can you do that on a budget? Here are some tips.

I don't want or I am not eligible to file for bankruptcy. A new resource is available to help you.

In my Waco bankruptcy law office, I will frequently receive phone calls from people who do not want to file bankruptcy or who are not appropriate candidates for bankruptcy. Thankfully there are resources out there for people who are not filing bankruptcy but still need financial help. In fact, The Kehl Law Firm wants to make sure that you get the help you need even though we are not filing a bankruptcy for you. We have teamed up with Dave Ramsey to provide you with resources that will help you work through your situation. Dave is a leading authority on personal finance who has dedicated his life to helping millions of people restore financial hope.

Why you must make your Bankruptcy attorney your new best friend

I recently heard in a seminar that a good bankruptcy attorney learns more about their clients than any other type of attorney out there. Bankruptcy documents include everyone you owe money to, everything you own, your income for the last 6 months, a series of questions about your financial affairs that make some clients ask me "Why do they need to know that?", and various other items. It is because you have to disclose so much that I am such a big advocate for picking an attorney you feel comfortable with. If you are not comfortable talking to your bankruptcy attorney, you may make a mistake in the documents which could have serious consequences. One area that is frequently missed by clients and their bankruptcy attorney is potential and ongoing lawsuits. As stated above, in the bankruptcy documents you must list everything you own. If you have the right to sue someone (even if you have not actually sued that person or company yet), you own that right. It is an asset in your bankruptcy. Now clients have difficult with this idea. They believe that the things they own are tangible things they can touch like their car, chair, bed, etc. But you own potential lawsuits, retirement accounts, life insurance, and other intangible things. A good bankruptcy attorney must realize that clients tend to forget these types of items and try to set up safeguards to help clients disclose these items. I cannot tell you how many times in my years as a Waco bankruptcy attorney I have had a client tell me "Oh, that has nothing to do with my bankruptcy." The problem with that statement is that the "nothing" probably does have to do with your bankruptcy. The lawsuits and potential lawsuits is an area where I get into the most interesting conversations with my clients. I have spoken to clients about a wide variety of topics including car accidents, inheritance disputes, medical malpractice, employment discrimination, business disputes, and unfair debt collection practices, just to name a few. It is amazing what I learn about my clients and their lives. Now you might be asking why I am talking to my clients about these topics....am I just nosy? Hopefully not. I am asking these questions to help protect my clients' rights. If we fail to list these lawsuits or potential lawsuits in the bankruptcy, my clients will lose their rights to these lawsuits. To put it simply, you have to list any asset which includes any reason someone or a company might owe you money (i.e., lawsuits and potential lawsuits). Failure to list these assets is an admission in federal court that you don't own the asset. And amending your schedules after the fact will probably not help you. The 5th Circuit recently ruled on yet another case which demonstrates how important it is to have these conversations with your bankruptcy attorney even if you do not believe it has anything to do with your bankruptcy case. In Love v. Tyson Foods, Inc., No. 10-60106 (5th Cir. 4/4/12) (see http://www.ca5.uscourts.gov/opinions%5Cpub%5C10/10-60106-CV0.wpd.pdf), the Court held that the debtor failed to meet his burden of proof to show that his failure to list an asset (in this case a potential lawsuit) was inadvertent, so he lose his lawsuit. Here are the facts in a nutshell:

Helpful Budgeting Tips

Clients from my Waco bankruptcy law firm will tell you that I frequently tell them that I want referrals not repeat business. That means they need to learn the skills to regain control over their finances. The most important part of regaining control over your finances is a budget. Here are some budgeting tips:

  • If you are married, you need to do your budget with your spouse. It is important that both of you understand and agree as to how the money is being spent.

  • Determine how much income you have coming in. Gather paychecks and other sources of income. If your income fluctuates determine an average income over a period of time to help you do a budget going forward.

  • Gather all of your bills. You need to face your expenses each month if you are going to have a successful budget.

  • Create a list of monthly expenses. Include your mortgage payment, car payments, auto insurance, student loans, groceries, utilities, medical expenses, savings, tithing, clothing, gasoline, pet expenses, entertainment, auto repairs, everything. Even if you don't purchase something every month, you need to include it in the budget so you save for it every month to ensure you have the money available when you need it. Good examples of items which may cost quite a bit that we only purchase once a year or so includes back to school clothes, new tires for the vehicle, and Christmas presents. If you put aside some money in your budget for these items each month of the year, these expenses won't see so large when it gets to the month you need to spend the money. You know it is coming, so save a piece at a time for them.

  • Prioritize your expenses by listing the most important at the top. See my prior blog on which bills should I pay first for more information about prioritizing you bills. (See which bills should I pay first blog—should be August 3rd)

  • Allocate amounts for expenses. At first you want to overestimate your food budget. The food budget is the hardest to estimate and is typically a budget breaker. It will take you a few months of budgeting before you get this one accurate.

  • Draw a line when you run out of money. Anything below the line will either not be paid or will need to wait until the end of the month to see if there is enough money to pay them.

If you are constantly having bills below the line, you need to rethink your budget. I read a book once that stated a truth: if you can't stay on budget, you either need to increase your income or decrease expenses. The main character in the book was not willing to decrease expenses so she raised money by selling items around her home. You have to decide what is the most important. Making and sticking to a budget is difficult, but as you gain control over your finances instead of letting them control you, you will discover true freedom.

What is your Money Personality?

For today's blog, I wanted to have a little fun. So, I found an online quiz that would help me determine my money personality. You can take it too at http://www.moneyharmony.com/MHQuiz.html. It was interesting although I think I already knew I was the money personality type it confirmed I was. According to the quiz, there are five major types of money personalities: Hoarder, Spender, Money Monk, Avoider, and Amasser. Most people are a mixture of two or more of the categories listed above. What type are you and how can you use that knowledge about yourself to help improve your financial situation?

Bankruptcy Fact: Bankruptcy Stops Creditor Phone Calls and Collection Letters

As a Waco bankruptcy lawyer, I have so many potential clients who are at the end of their ropes due to collection calls and letters. After you file bankruptcy, you are protected against creditor phone calls and collection letters. The physical act of filing bankruptcy causes you to be protected by the automatic stay. Basically, the automatic stay is a bubble that prevents creditors from contacting you while you are in bankruptcy without first obtaining the court's permission. This bubble goes into effect the minute your case is filed and you obtain a bankruptcy case number assuming you have not had a failed bankruptcy in the 12 months prior to the bankruptcy being filed. If you have had prior failed cases, you need to talk to an experienced bankruptcy attorney to discuss what bankruptcy protection, if any, is available to you. The automatic stay effectively halts most collection attempts, including calls, letters, repossession of vehicles, foreclosure, lawsuits, wage garnishment, and other collection activity against the individual in bankruptcy while they are in bankruptcy. As I stated above, the automatic stay begins the minute you file bankruptcy (assuming you have not had prior failed bankruptcies cases in the same year as noted previously). This bubble is so powerfully that it protects you even if your creditors do not know about it yet. If creditors continue to willfully contact you while you are in bankruptcy, you may have grounds to seek damages in the bankruptcy court. There are some exceptions to the automatic stay. The most notable of these exception is the collection of child support. Are you being harassed by creditors? We can help! Call 254-633-2876 or email me at [email protected] today for a free, no-obligation consultation to explore your options! It is time to regain control over your finances. Let my family help yours!   Photo Credit:  ellyjonez

Government Programs Available to help you avoid Foreclosure

As foreclosures continue to rise, there are government programs available to help you. I tend to encourage clients to consult with an experienced bankruptcy attorney about filing for bankruptcy to halt the foreclosure and allow you some time to explore these programs. It is difficult to navigate these programs with the help of an experienced attorney. You can learn more about the government's programs at www.makinghomeaffordable.gov.

Bankruptcy Myth: I will never recover from bankruptcy

Potential clients are always telling me in a matter of fact voice that they know they will never be able to buy a car or a house again after filing for bankruptcy. Wrong. What happens to your credit after bankruptcy is up to you. Rebuilding your credit after bankruptcy requires responsibility, discipline, patience, and budgeting skills, but it is possible. Most of my clients report an improved credit score approximately a year after bankruptcy which helps them get their life on track.

Florida Bankruptcy Court Rules that Bankruptcy Trustee May Not Waive Debtor's Defenses to Foreclosure Actions

When you filed for bankruptcy protection, the bankruptcy trustee steps into your shoes regarding your rights including lawsuits. In Florida, a woman was sued by her mortgage company, Wells Fargo, seeking to foreclose on her home. She raised various defenses to the foreclosure action and counterclaimed the mortgage company in the foreclosure lawsuit. Approximately one year later, the woman filed for a Chapter 7 Bankruptcy. Her counterclaim was an asset in her bankruptcy and claimed by the bankruptcy trustee. The bankruptcy trustee settled with Wells Fargo allowing the foreclosure to proceed if Wells Fargo paid the bankruptcy estate $10,000.00 which would be paid to the woman's creditors. In the settlement, the bankruptcy trustee dismissed the counterclaim and waived the foreclosure defenses. However, the Bankruptcy Court for the Southern District of Florida disagreed and would not approve the settlement agreement. See In re Larkin, 468 B.R. 431 (Bankr. S.D. Fla. 2012).

Online Payday lenders seeking Less Oversight

  Apparently this week, I am talking about payday loans in my blog. Each month I see more and more potential clients in my bankruptcy office drowning in payday loans. Including an increase in online payday loans. Online payday loans now account for approximately 35% of payday loans. By 2016, it is predicted that online payday loans will make up 62% of the total payday loan market. However, last month a Bloomberg story reported that online payday lenders are dramatically increasing their lobbing effects in DC to undermine current state regulations placed on them. As we talk about online payday lenders and fairness that they are requesting, keep two things in mind:

Payday Loans: How much do they really cost?

When I first started as a bankruptcy lawyer in Waco, Temple, Killeen, and the surrounding areas, I would rarely see a payday loan. However, as the economy continues to decline, more and more clients are taking out payday loans as an attempt to supplement their income. They will take out a loan to cover an expense and then renew or take out more loans to pay back the original loan and the cycle begins. Before taking out a payday loan you need to consider the following facts.

Want to make a Complaint with the Government Against a Credit Card Company?

The Consumer Financial Protection Bureau, a government agency, has launched a website that allows you to post grievances against credit card companies.  The website will eventually take complaints against mortgages, student loans, auto loans, and banking issues.  The complaints against credit cards will be made public in the hopes to improve transparency and efficiency.  According to the website, when a consumer files a complaint, the complaint will be forwarded to the company.  The company will have 15 days to respond.  The Consumer Financial Protection Bureau hopes to have the majority of complaints resolved within 60 days. Are you struggling with credit cards?  Call 254-633-2876 today for a free, no-obligation consultation with experienced staff.  Let my family help yours!

NBC News Investigates 500 Complaints Filed in 90 Days Against One Debt Collector

In 2010, Hollywood Video filed bankruptcy and closed its doors across the nation. Like every person or company who filed for bankruptcy protection, Hollywood Video had to list its assets. The only real asset it had was unpaid fees. So, the bankruptcy trustee began attempts to collect those fees using debt collection companies. However, two years later, the list of complaints against the debt collection companies on Hollywood Video's behalf continue to pile up. Currently NBC News is investigating 500 complaints filed against Universal Fidelity, one of those debt collection agencies, in the past 90 days. The list of complaints includes bullying, threatening to ruin credit, and additional fees. What makes these allegations more alarming (but perhaps typical from the complaints I hear from my Waco bankruptcy clients) is the sheer number of complaints and the fact that employees of the St. Louis Better Business Bureau report, "It seems pretty clear a lot of people are receiving these notices who do not owe this money." These complaints against Universal Fidelity are not the first set of complaints to trouble Hollywood Video's bankruptcy. In 2011, complaints piled up against National Credit Solutions for trying to collect debts allegedly owed to Hollywood Video. So many complaints that the bankruptcy trustee reached a settlement with all 50 states' attorneys generals to dramatically alert their collection tactics. Specially, the trustee promised to stop threatening to report the alleged debts owed to Hollywood Video on credit reports. The debt collection agencies put a notice on the employee's computers reminding them not to threaten credit reports and the complaints died down. Until the last few months when a new wave of complaints are coming in. The St. Louis Better Business Bureau issued a BBB Alert last month. Many people receiving these debt collection phone calls are just paying the alleged debts even though they don't owe them to stop the harassment and make sure their credit stays good. For more information on this story, see http://redtape.nbcnews.com/_news/2012/08/08/13167682-zombie-debt-collections-hollywood-video-is-dead-but-bills-still-haunt-consumers?lite. Do you have old debts on your credit report that you need to clean up? Call today at 254-633-2876 or email us at [email protected] for a free, no-obligation consultation to explore your options. Let my family help yours!

Dave Ramsey on iHeartRadio

Dave Ramsey has a wonderful radio station which unfortunately people in Waco, Texas and the surrounding areas were unable to listen to. Now you can listen to his station online or with a free app using iHeartRadio. Give it a try. The Kehl Law Firm proudly uses Dave Ramsey's Debtor Education as the second require class in a bankruptcy.  We include the DVD version in our bankruptcy quotes. Drowning in debt? Break the cycle. Call 254-633-2876 or email at [email protected] TODAY for a FREE, no-obligation consultation with experienced staff. Let my family help yours!   Photo by JMazzolaa

Minnesota Attorney General Settled with Accretive Health, a Medical Debt Collector, for $2.5 Million

Overwhelming medical debt is one of the primary reasons that people file for bankruptcy. Recently the Minnesota attorney general settled with Accretive Health, one of the nation's largest medical debt collectors, over claims that Accretive had aggressively collected debt from hospital patients. These claims included allegations that Accretive was obtaining payments from patients in emergency rooms and from their hospital bedsides in violation of federal laws which requires hospitals to provide emergency care regardless of whether the patient can pay for the services. Accretive has agreed to pay almost $2.5 million and to withdraw from doing business in Minnesota for six years although they may come back with the attorney general's permission after two years. (See http://www.nytimes.com/2012/07/31/business/medical-debt-collector-to-pay-2-5-million-settlement.html). Accretive denies any wrongdoing. Overwhelmed with medical debt? Call 254-633-2876 or email me at [email protected] today for a FREE, no-obligation consultation to explore your options with experienced staff. Let my family help yours.   Photo Credit:  Images_of_Money

Another Ordinary Family of an Olympian has Financial Troubles

Early today I posted a about Natalie Hawkins, the mother of the Olympic gold medal winner Gabby Douglas, who filed for bankruptcy earlier this year. I commented how refreshing it is to see a face to the bankruptcy debtor. So many people believe that individuals and families who file for bankruptcy are dead beats who run up credit cards balances and then file for bankruptcy when the bill comes due. (See yesterday's blog about defeating stereotypes at http://thekehllawfirm.com/what-kind-of-person-files-for-bankruptcy-defeating-the-stereotypes/). It is refreshing to hear from Ms. Hawkins that "I'm not even embarrassed" as she reported to the New York Times (see http://parenting.blogs.nytimes.com/2012/08/08/olympic-bankruptcies-for-ordinary-families/) Yet another set of parents of an Olympic athlete are struggling to pay their bills as well. The mother and father of swimmer Ryan Lochte are facing a foreclosure on a home they have in Florida. And the summer Olympics are not alone with bankruptcies. Dorothy Hamill the former queen of figure skating and an Olympic gold medal winner who filed bankruptcy back in 1994. It is important to put a face to the financial struggles of American families. The bottom line is that financial problems can happen to anyone. With most American's living paycheck to paycheck, it is easy to see how you could be the next victim. Hopefully more people who are struggling will speak up and continue breaking the stereotypes. You are not alone if you are struggling with your bills. Talk about your problems with experienced staff to explore your options. Call 254-633-2876 or email me at [email protected] TODAY for a FREE, no-obligation consultation. Let my family help yours!

Bankruptcy is Everywhere Even the Olympics

Gabby Douglas won two gold metals this week in London for individual all-around and team competition in gymnastics this week which is an amazing accomplishment for the 16 year old. She must be on top of the world. However, even Gabby has been affected by bankruptcy on a personal level. This past January her mother filed for bankruptcy. (See http://www.eonline.com/news/335929/golden-gal-gabby-douglas-opens-up-about-mom-s-bankruptcy-father-s-abandonment) She reports that her mother has struggled to raise her children as a single mom. I am proud of Gabby for her Olympic wins and her courage to admit her mother's struggles. So many of my bankruptcy clients here in Waco, Texas are single moms and dads who are struggling to make ends meet. They want to provide the best for their children and they are embarrassed to admit that they are filing for bankruptcy. However, part of being a parent is making tough decisions and they know that bankruptcy is the right decision for their family. And that takes courage. If there is more month at the end of your money, we might be able to help. Call today at 254-633-2876 to email us at [email protected] for a FREE, no-obligation consultation. Let my family help yours. Photo Credit: Department for Communities and Local Government

What kind of person files for bankruptcy? Defeating the Stereotypes

One of the difficult aspects of being a bankruptcy attorney in Waco, Texas is defeating the stereotypes of what kind of person files for bankruptcy. When I am out in the community and I am introduced as a bankruptcy attorney, people back away and say, "Well, I hope I never need you." The problem is that most people have an unrealistic view of the person who files for bankruptcy. They believe that people who file for bankruptcy are deadbeats who purposefully or irresponsibly ran up credit cards with lavish vacations to exotic lands, expensive jewelry, and big screen TVs in all of their rooms. Then they file bankruptcy without a second thought and keep all the awesome stuff they purchased to the detriment of the rest of us. How selfish and irresponsible! The reality is much, much different. My typical client is someone who is overwhelmed and can't pay their bills due to something out of their control. They are struggling and bankruptcy is the last thing they want to do. The majority of my clients fall into one of three categories:

Bankruptcy Myth: Bankruptcy Results in Losing Everything

I see potential clients on a regular basis who are terrified that they will lose everything if they file bankruptcy.  They have gone online and read horror stories about trustees selling assets.  What you get to keep in a bankruptcy is determined by the state you live in.  (It is slightly more complicated than that, so you should consult with an experienced bankruptcy attorney in your area).  Where I practice bankruptcy law in Waco, Texas, my clients rarely lose anything and, if they do, I tend to know at the first free consultation that there is an issue and talk to the potential client about it up front.  Here in Texas, we have extremely liberal laws about what you can keep in a bankruptcy.  You may want to reread that sentence again because it is one of the few sentences you will ever see in your life that says liberal and Texas together.  Most of my clients have a home, a couple of cars, items in their home, bank accounts, retirement accounts, and life insurance.  Typically all of those items are protected.  I have filed bankruptcy for people with approximately $10,000.00 in the bank who were able to keep all of it.  Other clients have keep business equipment and rental properties.  An experienced bankruptcy attorney can help you keep the assets you are entitled to keep and warn you of the risks to assets which may not be protected under the law.  If you are drowning in debt and worried about losing your assets, you need to consult an experienced attorney today.  Call 254-633-2876 or email me at [email protected] today for a free, no-obligation consultation.  Let my family help yours! Photo Credit:  gr8dnes

Which bills should I pay when I don't have enough money to pay them all?

So many clients come into my bankruptcy office stating that they just don't have enough money left over at the end of the month to pay all of their bills. Some of them are at risk of losing their home and cars to repossession and foreclosure because they are paying the payday loan companies who are calling and harassing them. I always tell them to make a budget every month putting the bills in order that you need to pay them. Here is the way I would order my bills from the most important to the least important:

Elderly Americans and Foreclosure

It is the American Dream. Someday we will all retire and live the good life in our golden years. Trust me, this is the dream that I cling to when I have to work 6 days a week most weeks and eat at my desk in between clients. However, for many of our older Americans this dream has become a nightmare as they are facing losing their homes to foreclosure. With foreclosures up 60% in major cities nationwide, it seems like everyone is being continuing to be hit hard in the mortgage crisis with no immediate end in sight and the elderly are not exempt. A recent AARP study found that our elderly are at a higher risk for foreclosure. (See http://www.aarp.org/content/dam/aarp/research/public_policy_institute/cons_prot/2012/nightmare-on-main-street-AARP-ppi-cons-prot.pdf?utm_source=Consider+Chapter+13&utm_campaign=44ea02d871-Monday_Update_0716127_15_2012&utm_medium=email). More than 1.5 million homeowners nationwide age 50 and older lost their homes to foreclosure from 2007 until 2011 just is a horrible number. I will say in my bankruptcy practice in Waco, Texas, I have helped quite a few grandparents in recent months save their homes from foreclosure and get them back on track to getting current on their mortgages. Specifically, the AARP found:

Capital One will pay $12 Million to Servicemembers due to Violations of the Servicemembers Civil Relief Act

Last week it was announced that Capital One will pay approximately $12 million in a settlement with the Justice Department over violations of the Servicemembers Civil Relief Act (SCRA). (For more information about the Servicemembers Civil Relief Act see my previous blog on the topic at http://thekehllawfirm.com/protection-for-military-from-creditors-servicemembers-civil-relief-act/) Among the alleged violations were wrongful foreclosures, improper repossession of vehicles, wrongful court judgments, and improper denials of the six percent interest rate that the SCRA guarantees service members on some credit cards and car loans. (see http://www.businessweek.com/news/2012-07-26/capital-one-to-pay-12-million-over-military-lending-claims?utm_source=Consider+Chapter+13&utm_campaign=44ea02d871-Monday_Update_0716127_15_2012&utm_medium=email). Approximately $7 million of the approximately $12 million on damages will go towards wrongful foreclosure violations with the remaining $5 million going into a fund to compensate servicemembers who did not receive the appropriate amount of SCRA benefits on their credit card accounts, motor vehicle finance loans, and consumer loans. The Justice Department acknowledged that Capital One participated fully in the investigation and settlement. Capital One is just one of the company that the Justice Department is investigating for potential violations of the Servicemembers Civil Relief Act. Bank of America and the Justice Department reached a $20 million settlement last year. JPMorgan Chase, Citigroup, and Wells Fargo are currently under investigation. Are you struggling to pay your bills? Come explore your options with experienced staff. Call 254-633-2876 or email me at [email protected] today for a FREE, no-obligation consultation. Let my family help yours. Photo Credit:  316th ESC

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