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10

Apr 2020

Announcement: Bankruptcy Hearings: Now Telephonic

Posted by / in Virginia Bankruptcy, Weekly Posts /

The Alexandria Bankruptcy Court Trustee Hearings are now by Telephone.

Bankruptcy Trustee hearings are now telephonic. That’s the policy of the Alexandria VA bankruptcy court, effective April 9, 2020. (Richmond and Norfolk, too.)

woman calling into bankruptcy hearing

Instead of a location, your hearing notice will have a phone number to call.

People who file bankruptcy are required by law to “appear” in front of the bankruptcy trustee to answer questions.  (For most people, the questions are, “Did you go over these papers when you signed them, and is everything you put there true?”) Those hearings by law are between four and six weeks after we send your papers to the court.

Starting now, you and I will appear by phone.

The trustee does about a dozen hearings per hour; and everybody will call in the same phone number. So you and I will be listening in on the hearings for every other person that hour. (This is the same as it would be if we were all sitting in the hearing room together.)

Mute your phone. When you call in, don’t say “Am I on? Am I on?” You’re on an open mic to the whole room. If you talk when it’s not your turn, you are interrupting the bankruptcy trustee. (You don’t want the trustee to be grumpy when it’s your turn.)

The trustee is supposed to check your ID and social security number. On the phone there’s no way they can match your picture. But having an ID that matches the name on the bankruptcy papers at least proves something. So take a picture, or scan, of your ID and social security card.  Email to vanessa@robertweed.com.

We Will Talk Privately Before and After

You and I will have a call-in the Saturday before scheduled time. To go over what’s going to happen. And make sure you are ready to call in.

On the day of, I’ll email you about ten minutes before; to make sure you are there; and cover any last minute jitters.  Afterwards, I send an email wrap-up. And set a time for a call later in the day to handle any follow up questions you have, or action items that came out of the hearing. Those calls will only be between us.

I’ll be looking at my email during the hearing, so if you want to whisper me a question, do it by email.  Use robertrossweed@gmail.com.  That’s the email I’ll be watching. (It gets to me 45 second quicker than robertweed@robertweed.com.)

Here are documents you should get 

The Notice of a Bankruptcy case comes to you in the mail about a week after the papers go in.  It tells when when your telephonic “appearance” is. It’s also a notice to the people you owe money to that they are required to leave you alone.  And that anybody who is garnishing you has to stop. 

Your Order to debtor  tells you that you are required to show up for the telephonic appearance.  And that if somebody dies and leave you money in the next six months, the bankruptcy trustee can come and get it. You get this in the mail with the Notice of a Bankruptcy Case.

Here’s stuff you need to look at before your telephonic bankruptcy hearing

The Bankruptcy information sheet is a form I’m required to give you.  Congress really wants you to know you have four choices under the bankruptcy law.  Chapter 12 is only for farmers (and fishermen.) I’ve never done a farmer. Chapter 11 is for people like Donald Trump. I’ve never done Donald Trump. Chapter 13 is a payment plan through the court. Chapter 13 can get you five years to catch up your house or pay off your taxes, You can also be forced into Chapter 13 if you are making too much money to get approved for Chapter 7.

Chapter 7 says ‘sorry I can’t pay these debts.’ For most people that’s what we want.

This Hearing Info is from me. It explains that you need to get us bank statements that cover the date your bankruptcy was filed.  For ALL your bank accounts including the ones “I never use.” It also lists the questions they usually ask.

Finally here’s my 15 minute video

Ignore the parts about where to go and where to park–these are telephonic bankruptcy hearings, remember.  But the other stuff is still right.  PS Actually one other correction. We use Moneysharp.org for the required class.  (The video mentions Hummingbird. They stopped covering Virginia.)

PS   The telephonic policy has been extended. Telephonic continues until 60 days AFTER the President announces the emergency is over.  That could be a long time.  

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07

Sep 2019

Announcement: What to Expect at Your Bankruptcy Hearing

Posted by / in Blog, Virginia Bankruptcy, Weekly Posts /

What to Expect at Your Bankruptcy Hearing

For most people, your only bankruptcy hearing is what’s called the “meeting of creditors.”  (We almost never actually have creditors show up. We can also call it your “trustee hearing.”)

Here’s a video that explains where to go, best places to park, what to bring and what questions you’ll be asked.

I’ll be there as your lawyer, but you can review this video to know what to expect.

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06

Sep 2020

Virginia Homestead Exemption too low to protect this Widow.

Posted by / in Virginia Bankruptcy, Weekly Posts /

Told a Widow this Week, She’ll Lose her House because of COVID and Business Debts

I had a heart-breaking call this week with a widow, who lost her small shop in the COVID depression.

Small business

Widow lost her small shop in the COVID depression. The Virginia homestead exemption is too small to protect her house.

She has about $65,000 in business debts and no way to pay them. 

If she tries to file Chapter 7 bankruptcy here in Virginia, the bankruptcy trustee will sell her house to pay those debts. Virginia law protects real estate that belongs to a married couple–but she’s a widow.

Bankruptcy is set up by the Federal Government, but each state sets its own rule on how much real estate equity you can protect. (That’s called your homestead exemption.) Thanks to the new majority in the Virginia General Assembly, you can protect $30,000.00 in equity. (Up from $5,000.00. The Virginia homestead exemption had been the lowest in the country.)

This widow has a little over $100,000.00 in equity, so the Virginia homestead exemption isn’t enough for her. She may need to sell the house to get cash to survive, because she lost her business, and isn’t social security age yet.

I like to say I can help almost everyone who contacts me; but I can’t help her.

PS Virginia Homestead Exemption is still near the bottom

While Virginia increased our homestead exemption from $5,000.00 to $30,000.00, it’s still near the bottom of the fifty states. You can protect 100 acres of Texas, 160 acres of Florida.  You could own the entire District of Columbia. Just this week California increased their homestead exemption from $75,000 to $300,000, in the rural counties. And up to $600,000 in in the urban areas.

Here’s a slightly outdated breakdown of the homestead exemption of all fifty states.

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30

Aug 2020

Why You Should (Sometimes) Ask for Arbitration

Posted by / in Before Bankruptcy, Weekly Posts /

Why You Should (Sometimes) Before Bankruptcy Ask for Arbitration

The fine print in your credit card agreement likely gives you–and the credit card company–the right to ask for arbitration.  You can guess that the fine print isn’t in there to help the consumer, but sometimes before bankruptcy you can use arbitration for your benefit.

How Can Arbitration Before Bankruptcy Help You?

Suppose you might need a little more time before you are ready to file bankruptcy. If there’s a warrant-in-debt, and you obviously do NOT want to get garnished. You can ask for a trial and a bill of particulars. Then, for your grounds of defense, you can ask for arbitration. Asking for arbitration can get you another month or more to get ready to file bankruptcy.

Stalling for time is not the idea of arbitration. But since the credit card companies put it in their agreement for their reasons, you have the right to use arbitration before bankruptcy for your reasons.

What should be the Purpose of Arbitration?

The idea of arbitration to to handle things that judges aren’t good at. For example, baseball salaries.

Baseball salary arbitration

Baseball players through their union and the owners have agreed to salary arbitration

Baseball players, through their union, have salary arbitration.  If there’s a pay dispute between the player and the club, a panel of arbitrators decide what the salary should be. There’s no reason for judges to be involved, that’s now what judges do.

A second advantage to both the club, and the players, is that the process is secret. Suppose a baseball club says, “we don’t want to pay what Joe is asking, because he can’t hit the low fastball.” It’s bad enough that the player hears his club bad-mouthing him. It would be even worse to read it in the sports page.

Is Credit Card Arbitration is Anything Like Baseball Arbitration?

The good reasons why arbitration makes sense for baseball salaries does NOT apply to credit card arbitration. If you get sued on a credit card, that’s the kind of thing judges decide all day long. Do you owe the debt? Who do you owe it to? Have they done something wrong trying to collect it? Deciding these things is what judges do.

So why do the credit card companies put arbitration in their fine print agreements? As long as consumers don’t fight back, the credit card companies like judges.  But suppose there’s a problem. Suppose the credit card company–or debt collector–has done something dirty. Then they want to keep it secret.

They put arbitration in their agreements, so they can take your case to a secret place, if they want to. In arbitration, you lose the right to appeal. You have fewer rights to get evidence. And you can’t join with other consumers who have been done dirty in a class action. That’s why the credit card companies are arbitration in their fine print agreements.

Why is Credit Card Arbitration Allowed?

If you had me on the Supreme Court, I’d allow arbitration for baseball players. Because it’s in the union contract. I wouldn’t allow arbitration on credit cards, because you have a constitutional right to a trial by jury. That’s the Seventh Amendment, which gives American the right to a trial by jury in disputes of over $10.00. The actual Supreme Court has said that doesn’t apply to you. Because when you used the credit card, you agreed to the arbitration.

Government can’t take away your constitutional rights, based on some fine print you never even read. But big companies apparently can.

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16

Aug 2020

$45,000 garnishment from a $3,500 29% interest loan

Posted by / in Weekly Posts /

At 29% interest adds up fast

A $3500 loan at 29% grows to a $11,000 judgment and then a $45,000 garnishment.

A $3500 loan at 29% interest grows to a $45,000 garnishment.

How fast does at debt at 29% interest add up? For Wilson a $3500 loan grew to a $45,000 garnishment in ten years.

Wilson borrowed $3500 from a Finance Company in 2004.  He took out that loan to pay off some collections and raise his credit score.  The interest rate, which no one should agree to, was 29%.  With four years of interest and late fees, Wilson owed $11,997.17 when the Finance Company got a judgment against him in May 1, 2008.

Prince William court records show Wilson got hit with twelve garnishments between 2008 and 2013. But they only collected $1134.79.  Wilson figured out he couldn’t be garnished working at a restaurant, because he got paid cash tips. So he was safe working for restaurants.

For five years, the Finance Company gave up. But during those five years, the debt kept growing.  It kept growing at 29% interest. Then, in September 2018, when they tried to hit him again, the Finance Company’s garnishment had grown to $45,582.82. Fifteen years after taking out a $3500 loan (five years after getting a judgment for 11,991.17) Wilson owed $45,582.82!

At long last, Wilson decided enough was enough. Wilson came to see me and filed bankruptcy in January 2020.

It’s now, finally, safe for Wilson to take a job with a steady paycheck–instead of working for cash tips–and not have to worry about getting garnished.

After Bankruptcy: Better Credit on His Next Car

As a bonus, in a couple years, Wilson will be able to get a car loan at a decent interest rate. His last car loan, with the judgment showing on his credit, had been at 22.9%. In a couple years, he’ll be able to get a car loan at 4%.  The difference between 22.9% and 4% on a $20,000 car is $185 a month: $13,200 total over a six year car loan.

What the lesson?

Judgments do NOT go away.  If you are getting a judgment against you for a finance company loan or a credit card, the time to file bankruptcy is now.

 

 

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13

Aug 2020

In Chapter 13, Don’t Bounce Your Checks!

Posted by / in Blog, Virginia Bankruptcy, Weekly Posts /

In Chapter 13, Don’t Bounce Your Checks!

Please don’t bounce your checks, when paying the Chapter 13 Trustee.

At least here in Northern Virginia, after two bounced checks, they require you to start sending money orders.  Money orders are expensive, hard to get during the pandemic, and even harder to trace if they are lost in the mail.

It’s better to be a couple weeks late in your payment than to bounce checks. So please, don’t bounce your payment checks.

bounced check

Do NOT bounce your check to the Chapter 13 Trustee

Reminder: Here’s the Chapter 13 Mailing Address

There’s a bank in Memphis that handles the payments for most of the bankruptcy courts in the country. (They have different PO Boxes for the different Chapter 13 trustees.)

Here’s the payment address for Thomas Gorman, the Chapter 13 Trustee in Alexandria VA.

 

                                               Thomas Gorman, Trustee
                                               P.O. Box 1553 
                                               Memphis, TN 38101-1553

Be sure to put your case number on your check. Otherwise it could go into  the account of another person with a similar name. And don’t bounce your checks.

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NORTHERN VIRGINIA BANKRUPTCY LAW OFFICES