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North Texas Has Above Average Consumer Debt

Tue, 07 Sep 2010 05:00:08 +0000

Debt is an issue that affects most of America, and North Texas is no different. The residents of North Texas, including the Dallas and Fort Worth, are amongst the United States’ leaders in low credit scores and average consumer debt. According to Experian, Dallas is second only to Seattle in average amount of consumer debt amongst the 20 largest metropolitan areas in the U.S.

Experian released a report in March of 2010, stating that Americans had an average of $24,775 in debt and residents of the Dallas area had an average of $26,599 in debt — excluding mortgage debt.

Residents of the Dallas area also had below average credit scores, with a VantageScore of 719. This ties the residents of the Miami-Fort Lauderdale area for the lowest VantageScore among the 20 largest metropolitan areas in the U.S. The nation, on average, has a VantageScore of 749.

Even though many residents of the Dallas area are carrying heavy debt, there may be help available through Chapter 7 or Chapter 13 bankruptcy.

Chapter 7 bankruptcy is designed to give a debtor a fresh start by discharging most debt. In a Chapter 7 bankruptcy, the debtor is allowed to keep “exempt” property, which is much more than just a car for each driver and a home.

To qualify to file for Chapter 7 bankruptcy, a debtor must pass a “means test.” The means test is a formula designed to limit Chapter 7 bankruptcy to those who have no means of paying their debts. If a debtor cannot pass the means test, Chapter 13 bankruptcy may be the option.

Chapter 13 Bankruptcy

Often called the “wage earners’ bankruptcy,” Chapter 13 bankruptcy, offers debtors a chance to rearrange their debts into one monthly payment to be paid over three to five years. Once the repayment period is up, the remaining debt is discharged.

Much like Chapter 7 bankruptcy, Chapter 13 bankruptcy allows the debtor to keep their exempt property, including their home. If a home is in foreclosure, filing for Chapter 13 bankruptcy will stop the foreclosure and allow the debtor an opportunity to catch-up on past due payments over the life of the repayment plan.

It is very rare that the debtor under either chapter would lose any property or asset, unless they just wanted to surrender it to avoid having to pay for it to the secured creditor.

Discuss Your Options with an Attorney

Bankruptcy may be an option for you if you are carrying a large debt load. An experienced bankruptcy attorney can evaluate your situation and help you decide whether bankruptcy is in your best interests. For questions or for more information, contact a skilled bankruptcy attorney.

Article provided by Pelley Law Office, L.L.P.
Visit us at pelleylaw.com

North Texas Has Above Average Consumer Debt is a post from: Chapter 7 Bankruptcy Information

Contractor filing Chap 7, won Small Claims case for his working without a license, against the law in CA.?

Fri, 20 Aug 2010 17:00:10 +0000

Is he allowed to have my judgment dismissed even though I won due to his committing fraud, and breaking 3 laws in the process? Also, after I won based on the merits of the case, he tossed hundreds of nails in my driveway and threw a gallon of white paint on my fence and gate. Then the guy had the nerve to file an appeal. At the appeal, the judge increased the judgment because of his (nail and paint) actions plus the fact that he found that he performed the work without a license, (actually he did it under the license of a person who had already died, which I didn’t know during the first case, it only came up in preparation for the appeal).I received a notice yesterday that he has filed for Chapter 7 bankruptcy. I understand that in bankruptcy you can have money you owe dismissed or discharged, but when you break the law in the way he did, is that also allowed to be discharged as well? That seems to be unfair that someone could willingly violate the law and then just have the judgment discharged. Any help would be appreciated. Thanks

Contractor filing Chap 7, won Small Claims case for his working without a license, against the law in CA.? is a post from: Chapter 7 Bankruptcy Information

Forgive and Forget? Decoding Bankruptcy Debt Forgiveness Rul

Tue, 03 Aug 2010 17:01:04 +0000

January 1, 2010

By Maxine Magri, CPA

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, signed by President Bush on April 20, 2005, had two main objectives: reduce the number of debt categories that could be discharged and force more debtors to file Chapter 13 bankruptcy rather than Chapter 7.

Chapter 7 is a liquidation in which a business goes out of business, while Chapter 13 allows individuals in the United States to undergo a financial reorganization supervised by a federal bankruptcy court, requiring one monthly payment to a trustee who distributes the same according to bankruptcy rules.

Terms to become familiar with in bankruptcy include nondischargeable debt (debt that cannot be eliminated through bankruptcy), dischargeable debt (debt the debtor does not have to pay) and protected assets. Protected assets can be excluded or exempted.

Chapter 7 bankruptcy offers immediate, complete relief of many oppressive debts, and could eliminate unsecured debt, credit cards, payday loans and medical bills. Chapter 7 bankruptcy cannot be used by debtors who earn more than the median income in their states and who can repay at least $100 a month for five years. Because there is little or no nonexempt property in most Chapter 7 cases, there may be an actual liquidation of the debtor’s assets. These cases are called “no asset cases.” The debtor receives a discharge just a few months after the petition is filed.

Commercial enterprises that desire to continue operations will often file for bankruptcy under Chapter 11, in which the debtor can terminate burdensome contracts and leases, recover assets and change operations in order to return to profitability. The debtor generally goes through a period of consolidation and emerges with a reduced debt loan and a reorganized business.

Tax debt

Is bankruptcy an option for the client who owes back taxes? For Chapter 13 bankruptcy, the debtor must have filed all taxes for the four-year period prior to filing the bankruptcy petition.

There are five rules that must all be satisfied to discharge income taxes in either Chapter 7 or Chapter 13 bankruptcy. The rules apply to both federal and state taxes, and the most common infraction that keeps an individual from qualifying is the failure to file the tax return. The tax rules can be found in 11 USC Section 507 and section 523. The five items are as follows:

The most recent due date for filing the return is more than three years old.
The tax return was filed more than two years ago.
The assessment is more than 240 days old.
The tax return must not have been fraudulent.
The taxpayer must not have been guilty of a willful attempt to defeat or evade the tax.

The law specifically states that back taxes related to nonfiled or late filed returns cannot be discharged. Nondischargeable taxes include federal, state and local taxes that became due within three years of filing for bankruptcy, and also include trust fund taxes. Additionally, trust fund taxes include employees’ withholding and employers’ share of Social Security and Medicare taxes.

The age of the debt does not matter. Nondischargeable debt includes loans the debtor borrows to pay the nondischargeable taxes, and penalties and interest associated with the taxes are nondischargeable. Although, in some cases, Chapter 13 penalties are dischargeable to the same extent as any general unsecured debt.1

Even though the taxes, interest and penalties are discharged, the tax liability has often been secured with a filed tax lien — and the basic rule is that a properly filed tax lien survives bankruptcy.1

Forgive and Forget? Decoding Bankruptcy Debt Forgiveness Rul is a post from: Chapter 7 Bankruptcy Information

Chapter 7 Bankruptcy – Timothy J. Larsen Bankruptcy Law Blog on …

Mon, 02 Aug 2010 17:00:20 +0000

Under the Federal Bankruptcy Code, there are several types of bankruptcy. The most common form of bankruptcy is Chapter 7 bankruptcy, which is generally the simplest and quickest form of bankruptcy. Chapter 7 bankruptcy is available to individuals, married couples, corporations, and partnerships.

Chapter 7 bankruptcy is often the choice for personal bankruptcy. It cancels debts and is also called liquidation bankruptcy or straight bankruptcy. Under Chapter 7 bankruptcy, a trustee appointed by the bankruptcy court may sell off or liquidate some of the property or assets of a debtor for the benefit of creditors.

Most Chapter 7 in Salt Lake City entails no-asset cases in which the filing party has no non-exempt property for the trustee to sell. There are strict income requirements to be eligible to file for Chapter 7 bankruptcy in Salt Lake City

Chapter 7 Bankruptcy – Timothy J. Larsen Bankruptcy Law Blog on … is a post from: Chapter 7 Bankruptcy Information

Baxter & Baxter, LLP | Portland Oregon Bankruptcy : By Hiring Gulf …

Sun, 01 Aug 2010 05:00:11 +0000

Baxter & Baxter, LLP | Portland Oregon Bankruptcy : By Hiring Gulf … is a post from: Chapter 7 Bankruptcy Information

Christian Consumer Credit Counseling Useful Information

Sun, 25 Jul 2010 05:00:13 +0000

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Christian Consumer Credit Counseling Useful Information is a post from: Chapter 7 Bankruptcy Information

Non-Dischargable Debts, Norfolk, Virginia Beach, Hampton Roa

Tue, 13 Jul 2010 17:00:38 +0000

Most debts are eliminated, or “discharged”, through a Chapter 7 Bankruptcy. However, there are some types of debts that cannot be discharged through bankruptcy. These debts are described as “non-dischargeable”, which means that after you file bankruptcy, and your case is over, you will still owe these debts.

Student Loans and Educational Based Debt: Loans for “educational benefits” cannot be discharged through a bankruptcy, unless you can show that they cause you an “undue hardship.” This includes loans for tuition, books, room, board, etc. (11 U.S.C. 523(a)(3)), it DOES NOT include simple unpaid tuition or fees. Unfortunately, the definition of “undue hardship” is insurmountable so that student loans should be considered “non-dischargeable”.
Child Support and Alimony: Child support and alimony cannot be discharged through the filing of a bankruptcy. (11 U.S.C. 523(a)(5)). It is, however, possible to obtain to catch up aid child support or alimony through a chapter 13 filing.
Taxes: Taxes will not be discharged by filing a Chapter 7 Bankruptcy unless: (1) they are income taxes (or taxes measured by gross receipts); (2) they are over three years old; (3) they were filed on time (meaning before April 15th of that tax year, unless an extension was given); and (4) they must be accurate (this means that the IRS did not later find errors or omissions in the return).
You can still discharge some tax debts if you filed your returns late, but more than 2 years prior to the bankruptcy, if all the other elements described above are met (11 U.S.C. 523(a)(1)).
Marital/Divorce Debts: Any debt that was incurred through a divorce decree “to a spouse” will not be dischargeable through a Chapter 7. There is currently great disagreement as what exactly “to a spouse” means. Generally, any debt awarded through a divorce decree can no longer be discharged in bankruptcy, regardless of whether the ex-spouse objects to the bankruptcy or not. (11 U.S.C. 523 (a)(15)).
Court Imposed Restitution: Any money owed to the Court or victim of a crime is not dischargeable. (11 U.S.C. 523(a)(7) and 11 U.S.C. 3613).
Court Fees: Debts owed to a court are also not dischargeable in a Chapter 7 Bankruptcy. (11 U.S.C. 523(a)(17)).
Fraud/Theft: Debts incurred in the commission of a fraudulent act will not be discharged if the creditor objects and files the appropriate claim. This includes debts incurred through larceny and embezzlement, but also includes credit card debts based upon a false credit application. (11 U.S.C. 523 (a)(2) & (4)).
Eve of Bankruptcy Credit Card Debt: If you buy luxury goods on a credit card within 90 days of filing a bankruptcy of more than $550, or cash advances of $825 within 70 days of filing a bankruptcy, the Judge may presume that you did not intend to repay the debt when you incurred it because you expected to file bankruptcy and those debts will be deemed non-dischargeable.
Intentional Torts: Debts arising from intentional acts to injure a person or their property, or resulting from drunk driving accidents are not dischargeable. (11 U.S.C. 523 (a)(6)). These acts include battery and assault.
Debts Not Previously Discharged in Other Bankruptcies: Debts that were included in a previous bankruptcy that was dismissed due to fraud. (11 U.S.C. 523 (a)(9) & (10)).

CONCLUSION

These are the major categories of debts that are “non-dischargeable” in bankruptcy. If you are in debt and would like to find out what your legal options are, please give us a call at 757-627-8365.

Non-Dischargable Debts, Norfolk, Virginia Beach, Hampton Roa is a post from: Chapter 7 Bankruptcy Information