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26

May 2012

Before bankruptcy: How to put Mom on your car title as lien holder

Posted by / in Before Bankruptcy / 14 comments

Before bankruptcy, sometimes you need to borrow money from Mom.  You might want to borrow that money and put her on your car title.

Now Congress made it illegal for me, a bankruptcy lawyer, to advise you to borrow money.  But the Supreme Court said it’s legal for me to tell you that it’s legal for you to do it.  (You may have to read that twice.)

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27

Jun 2011

Jewelry, my forms and your bankruptcy

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Last fall, Judge Robert Mayer, our bankruptcy judge in Alexandria, tossed out the bankruptcy of a guy for lying on his forms about the value of jewelry.  This was a guy who owed a lot–upwards of $300,000–and he’s now stuck.

This was an extreme case–the guy had spent way over $100,000 on jewelry within two years of the bankruptcy.   (This is one reason I like the specific Experian report I want you to get.  experian.com/reportaccess.  That report gives me your balance history going back two years.  So if you put $100,000 on a jewelry credit cards–I’d know.)

Valuing jewelry at 2 cents on the dollar got this bankruptcy thrown out. About 12 cents on the dollar would not.

He valued it at about $2000.  Now Judge Mayer said the used value of jewelry is certainly not what you paid–but it’s a lot more than two cents on the dollar.

Judge Mayer said the guy knew about what it was worth.  About 12 cents on the dollar.  How did he know?  Because right before he filled in his bankruptcy forms, he had sold some of it.  (That’s one of the many reasons I ask you on my forms what you have given away or sold in the last two years.  And why its a good idea for you to answer that question.)   He lied to the court about selling stuff too.

If this guy had put down the jewelry was worth $10,000, instead of $2000, his bankruptcy probably would have been approved.  (And told the court he had sold some of it.)  That was a mistake that cost him any chance he will ever have of getting out of debt and back to good credit.

How should you value your jewelry?  One way Judge Mayer says, is to take it to a pawn shop or look on Ebay for similar stuff.   Another way would be to take 15% of the retail price.  That should be an amount that Judge Mayer will be happy with.  And unless you spent $100,000 on it, it should be an amount we can protect.

This guy had a very complicated situation; sometimes people with complicated situations want to come in and talk, instead of filling in my forms, and then coming in to talk.   The forms are important.

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14

May 2011

Before bankruptcy: Do debt collectors tell the truth?

Posted by / in Before Bankruptcy / 2 comments

Before I became a bankruptcy lawyer, I thought that successful companies were generally pretty honest.  I would have guessed they were more honest than most people–otherwise why were they so successful.  Or at least, they’d be honest because they had more to lose.

Virginia Bankruptcy lawyer Robert Weed

Before I became a bankruptcy lawyer, I thought big companies were honest.

Now I know better.  I can’t compare the honesty of the average company, with the honesty of the average person.  But I do know that being big and successful does not make a company honest.

Check out this article in the Wall Street Journal about the debt collector, Portfolio Recovery, and a lady named Martha Kunkle.

When a debt buyer sues a consumer on a charged off debt, they have to prove the amount of they debt.  And they have to prove that they now own the debt.

Portfolio Recovery is one of the biggest and most profitable debt buyers in America.  Their website tells you they have been often named one of the best, and fastest growing, small businesses in America.  They sue thousands of people every year.  And up through 2008, they did it thousands of times based on sworn statements by Martha Kunkle.

Sworn statements by Martha Kunkle that she carefully checked the records; sworn statements by Martha Kunkle that she knew the amount of the debt; sworn statements that she knew who had the legal right to collect that debt.  There was a big problem with that.  Martha Kunkle died in 1995!

This problem did not originate with Portfolio.  The people signing Ms Kunkle’s name were employees of Washington Mutual–and one of them was Ms Kunkle’s daughter.

Still multiple people, with very different handwriting, were signing a name that didn’t belong to any of them.  And Portfolio, without any investigation at all, was suing people based on those fraudulent signatures.

Lots of people file bankruptcy because they are being hounded by debt collectors.  (And for most of those people, filing bankruptcy is the smart thing to do. )

But, if you start to feel bad about having to file bankruptcy, remember this.  As long as you put your own name on your bankruptcy court papers, you are more honest than a lot of those debt collectors.

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