Posted by Robert Weed / in Virginia Bankruptcy, Weekly Posts / No comments yet

This time bankruptcy worked better than I hoped

John and Val filed a Chapter 7 bankruptcy with me in 2004.  A lot of their problem then was medical bills.

John’s health continued to decline.   When they came to see me in 2012, he was disabled.  He was confined to a wheel chair.  And they were back in debt.  No surprise.

But John wanted to “protect his credit” so they decided to do nothing.

After their 2004 bankruptcy, John’s health kept getting worse. No surprise they were in financial trouble again.

They came rushing back this month, December 2014.  They had gotten a trial loan mod–getting them a house payment they could afford

But, they hadn’t been able to make the loan mod trial payments!  Two reasons.  First, they had been taking pay day loans–and a car title loan!  And now were paying those instead of the mortgage!  (Why; well payday loans will call and threaten you, if you don’t pay them.) Second, Val had gotten garnished for back Home Owner Association dues.

So, they were back to the mortgage they couldn’t afford.  They now had a car payment they couldn’t pay.  And Vicky would have a new paycheck garnishment starting in two weeks.

This was a case for Chapter 13

I always look first at Chapter 7, but this was a case for Chapter 13.  I could use Chapter 13 to take the interest on the title loan from 240% down to 5%.  Saving nearly $325 a month. With John on social security disability, that $325 was lot of money.

Second, I thought there was a chance that the bankruptcy judge could undue their “default” on the trial mod payments.  (Force the mortgage company to accept the loan mod trial payments late, and then lock in the modification.)

The husband threatened to leave my office unless I could promise him this would work.  No promise: loan mods are voluntary.  I’ve never tried to force a bank to accept one.  His wife told him, what choice do we have?

Loan Mod Offer Comes in the Mail

Worked better than I hoped.  In less than two weeks, the mortgage company offered them the loan mod again.  Make three trial payments, and we’ll make it permanent. (I didn’t have to try to argue the judge had the power to bring back the defaulted mod.)

Now that Val is not being garnished, and they are not being bled by payday loans, they can make that payment. (And I didn’t have to try my long-shot argument in front of the judge..)

House saved; family saved.

Wew.  No guarantee this would work again.

Even at the last minute, for most people bankruptcy works

These folks would have saved enormous stress–and probably helped John’s health–if they had gone ahead with bankruptcy in 2012.  (They chose “protecting their credit”  instead of protecting their family.) But even at the last minute, for most people, bankruptcy works.

Posted by Robert Weed / in Virginia Bankruptcy, Virginia Chapter 7 Bankruptcy / 1 comment

Chapter 7 Bankruptcy Trustee Grabbing Alimony Payments

Esther is divorced, mother of two grade school children.  She and the kids are living on child support, alimony, and pulling money out of her retirement.  She has $10,000 left in her retirement.   Her most valuable possession is her paid for 2007 Honda Odyssey.  It has 148,000 miles.

Esther hasn’t worked in several years.  She had been a stay-at-home mom for most of the marriage. (Her retirement is from Sentara, so I’m guessing at one point she worked as a nurse.)

Esther filed Chapter 7 bankruptcy this spring in Norfolk, VA.  Her papers showed she had several unpaid medical bills.  Her largest credit card, less than $4000, was with Capital One.

The Chapter 7 trustee told the bankruptcy judge that he wanted her alimony.  Without the alimony, it’s hard to know how this family will make it.  The child support, without the alimony, is less than the rent.  The children will suffer.

The bankruptcy lawyers in Virginia, led by Darden Hutson and Daniel Press, are looking for members of the Virginia General Assembly to help moms like Esther.   We need a sponsor for a bill to clarify that spousal support cannot be taken away by the bankruptcy court.

Once we get a sponsor, the key man is Del. David Ablo (R-Springfield).

Delegate Dave Albo, with his wife, Rita, and adopted son, Ben.   Del Albo is Chairman of the Courts of Justice Committee in the Virginia House of Delegates.   He will have more say than any other one person, on whether  the legislature will help women and children, by telling the bankruptcy court to keep their hands off alimony and spousal support.

Del. Albo is Chairman of the Courts of Justice Committee, in the Virginia House of Delegates.

His committee controls whether bills on bankruptcy exemptions go to a vote in the full House of Delegates.

Early in his career, Del. Ablo demonstrated his heart for children.  He served as a court-appointed guardian for neglected and abused children.

We hope that Dave Albo will show his heart for children this year by supporting our bill.

Update:  thank you Del Dave Albo!

Under Del Albo’s leadership, his committee approved this important law in an unanimous vote, January 28, 2015!

Update 2:  Passed and signed into law March 2015.

Gov. Terry McAuliffe signed into law this morning HB 2015, that fixed this problem, and protected single moms and their families.

Only one member of the 140 member Virginia General Assembly voted no.  Still, it could have gotten hung up at any point.  Three legislators deserve special thanks for their work.

Thanks go to Del Scott Surovell, who was our sponsor.

Del Dave Ablo, Chairman of the House Courts of Justice Committee.  He was the key guy.  He puts people above politics.

Sen. Mark Obenshain, Chairman of the Senate Courts of Justice Committee.

Thank you all.

Posted by Robert Weed / in Virginia Bankruptcy / No comments yet

Ocwen Back-Dates Loan Mod letters–according to NY Attorney General.

Here’s a PR photo of Ocwen President Ron Faris offering a loan mod to struggling home owners. The New York Attorney General charges that Ocwen back dates some mod paperwork, so consumers miss their deadlines.

One of the scary thing about applying for loan mods is the short deadlines you have to get them stuff–often things you’ve sent them twice before.

As a bankrutpcy lawyer, I’m often sent copies of those requests to send on to my clients–and sometimes the dates seemed a little odd.

I was still shocked when the Attorney General of New York says Ocwen is back-dating some of those letter:  maybe intentionally.

In spite of all the dishonesty that went into the housing crisis, I still tend to thing banks are usually run by honest people. I’m going to start looking at the dates on those letters I get more closely–and I hope they get what they deserve.

Posted by Robert Weed / in Virginia Bankruptcy /

Q:  “Why Do you Want All these Forms Filed Out for our Bankruptcy Consultation?”

A:  “Because you and I should not play Texas hold’em.”

I’ve never played Texas hold’em.  But I’ve seen it on TV.  Maybe you have, too.

Each players has their own cards–then the cards dealt in the middle face down are turned over as the game goes on.  Each player bets on his own cards, and what the hidden cards might be.

Don’t play Texas hold’em with your bankruptcy lawyer

A bankruptcy consultation–any lawyer consultation–can end up like Texas hold’em.  The client comes in, and says, “I didn’t bring any paperwork; I just want to ask one or two questions.”

Some cards are face up; some face down, and nobody has the full picture..

That’s what happens when there’s a bankruptcy consultation with partial information.

You don’t want “exciting” when you meet with your lawyer.

Texas hold’em makes for an exciting game, but you don’t want “exciting” from your lawyer.  You want calm, and maybe even boring.

That’s why I ask people to fill in my 37(!) page form and bring it with you for your bankruptcy consultation.

When we talk, I want all the cards face up.

When we talk, I want all the cards face up.  I want to tell you (it’s not always possible) exactly how I’ll handle your case and exactly how it will work.  When we’ve finished, I put it in writing.

Neither one of us want surprises.  The last thing you want is for your lawyer to say “why didn’t you tell me about ….”  And the last thing a lawyer wants to hear is, “because you didn’t ask….”

Posted by Robert Weed / in Virginia Bankruptcy / No comments yet

Food and clothing in the bankruptcy means test

One of my jobs as a bankruptcy lawyer is to make you look good on the bankruptcy means test.

The census shows that food here in Northern Virginia costs 107.9% of the national average.

Here in Northern Virginia, I claim an extra 5% on your food and clothing allowance.  The bankruptcy means test law talks about that 5% in 11 USC 707(b)(2)(A)(ii)(l).

That law says,  “if it is demonstrated that it is reasonable and necessary, the debtor’s monthly expenses may also include an additional allowance for food and clothing of up to 5 percent.”

Here in Northern Virginia, I always claim that 5%.

That’s because this is a high cost of living area.  I was challenged on it for the first time now in June 2014.  (That was the first challenge on that I had since that law was passed in 2005.)

It ended up we handled the case in a way that it didn’t matter.  But that challenge forced me to track down whether, and why, I say we live in a high cost of living area.

Here’s what a found from the 2010 census.  It shows that in the Washington DC/Arlington/Alexandria area, food is 107.9% of the national average.   (Housing costs, no surprise to anyone who lives here, are at 226% the national average!)

Based on that, I’m going to keep on claiming that extra 5% on the bankruptcy means test for food and clothing.

PS.  Suppose you live in an area which does NOT have high food costs, according to the census.  Could you claim the extra 5% allowance?  Your approach would have to be different than mine.  If you could show that somebody in the family has food allergies or medical needs for a special diet, maybe you could claim the extra 5% on the bankruptcy means test that way.

Posted by Robert Weed / in Chapter 13, Chapter 13 Bankruptcy, Virginia Bankruptcy / No comments yet

If you are in Chapter 13, the vehicle operating budget you are allowed will be too small.

That’s (almost) a mathematical certainty.   Here’s why.

The census bureau shows–no surprise–that people who are working spend on average double on transportation gasoline and maintenance than people who aren’t.    (For more, see this from the American Association of State Highway and Transportation Officials.)

If you are in chapter 13, you’re working.  Unless you telecommute, you’ve got to get to work and get there everyday.

Your Chapter 13 vehicle operating budget in Northern Virginia is $277 a month, for one car, $544 for two or more.   That amount is figured based on all cars–NOT just on all cars owned by people who have to get to work.  (That budget is in the the bankruptcy means test.  That’s a formula that says how much money you have to pay back on your debts, and what you are allowed to keep to live on.)

For most people in Chapter 13, when you get that $700 car repair bill, the money won’t be there.

There are more cars than jobs in America.

There are 250 million passenger vehicles.

There are only about 150 million Americans working or looking for work. )

So there are a hundred million cars in America that are NOT being used to get people to work.

If we recalculated that $277 by whether people work, we’d have $340 monthly for cars that take people to work;  $170 for cars that don’t.

If your car takes you to work, your Chapter 13 transportation budget will be $65 a month short every month.

If your car takes you to work, your Chapter 13 transportation budget will be $65 a month short, every month.  That’s $780 short each year.

To put it differently, if you use a tank and a half of gasoline a week, driving to work (plus whatever else you have to do), you have enough money left for insurance, but NO money for car repairs.

People with short commutes aren’t using a tank and a half.  But for many people in the outer suburbs, that’s low.

It cost me $1500 to get my Honda Civic through the safety inspection last month. My service rep said it was time to buy a new car.

A budget with no money for car repairs is ok, if you a driving a new car under warranty.  No money for car repairs is awful, if you’ve got a hundred thousand miles on your car.  And you have to get through a sixty month chapter 13 plan.

Car repairs don’t come on a regular schedule (well, you should change your oil every three months.)  At some point you need new brakes, new tires, a new transmission.  And you will need them now!

Maybe you’ve saved some money, but since the bankruptcy court is taking ALL your “projected disposable income,” saving is tough.

At that point, you’re choices are: skip the rent, stop eating for two months, walk to work.  None of those work every well.

Recently, I proposed a chapter 13 plan, with a higher transportation allowance,  each year of the five years, as the cars got older.  I pointed that the Supreme Court said we should project virtually certain changes in a chapter 13, when calculating how much you had to pay the chapter 13 trustee, and how much you could keep.

I argued that is was “virtually certain” that over five years the cars would get older.  Nope, said Bankruptcy Judge Robert Mayer–the cars will be older but who knows if they need repairs.   (Huh?  I thought everybody knew that.)

If you have to go into Chapter 13, and you have a long commute, how can you avoid certain failure of your chapter 13 plan?  What can you do when your car needs major repairs?

Here are some ideas.

1.  Have four thousand dollars for car repairs already set aside when you go into Chapter 13

2.  Get the boss give you a company car.

3.  Make sure you are driving a new car, with a strong warranty, before you file.

4.  Move closer to work.

5.  Ask the bankruptcy court for permission to buy a brand new car–and then see if someone will finance you while you are still in bankruptcy.  (Alexandria Chapter 13 Trustee Thomas Gorman recently told the Fourth Circuit Court of Appeals that buying a new car in chapter 13 is easy and painless. Brief 5-23-2014   To me, it looks a little harder.)

Here’s my last idea–keep track of all your transportation expenses–gasoline, car repair, insurance, tolls, parking–every year and ask your lawyer to submit them to get a reduction in your Chapter 13 payment.  Each year, here in Alexandria VA, Chapter 13 Trustee Thomas Gorman demands to see your tax returns to see if he can squeeze you for more money.  Maybe you and your lawyer should look at your transportation costs, and annually ask to pay less.

PS  Here’s a good article by Heather McGivern, a Michigan Bankruptcy Lawyer, that talked about this problem in 2011.  She says there are many people who drive to see their bankruptcy lawyer in car that probably won’t last much longer.  And there are many people about to file bankruptcy who need to go out and buy a newer car.  And that some people say your lawyer cannot tell you that.

PPS   I’ve got a hundred thousand miles on my Honda Civic, and it cost me $1500 last month to get it through the safety inspection.  My service rep at the Honda dealer told me it needs new shocks and struts but I should “buy a new car rather than spend any more money on this one.”

Posted by Robert Weed / in Chapter 13, Virginia Bankruptcy / No comments yet

Sometimes a dismissed Chapter 13 is all your need.

Chuck and Inez came to see me today about Chapter 7 bankruptcy.

After Chapter 13 saved their house form foreclosure, I didn’t want Chuck and Inez to have it sold by a Chapter 7 trustee.

I had put Inez in a Chapter 13 in December 2011 when their house was days away form foreclosure.   The Chapter 13 was dismissed six weeks later.

BUT, that short Chapter 13 had stopped the foreclose, landed their loan mod application on a different desk, and they got approved for first and second mortgage loan mods by the end of 2012.

They also had three big credit cards that were late–and they came to see me today about what to do with those.  Do nothing, I said.  Because of the very limited homestead protection in Virginia, a Chapter 7 bankruptcy trustee would take and sell your house to pay for the cards.

Since they haven’t bothered you  in nearly two years–and were a couple years behind in 2011–doing nothing is your best plan.

I brag a little that my Chapter 13 dismissal rate is among the lowest here in Northern VA.   But sometimes a Chapter 13 dismissal is all the help you need.

Posted by Robert Weed / in Virginia Bankruptcy /

Private Student Loans + Bankruptcy Reform = Unemployment

Chuck told me today that he can’t buy a house because of his private student loans.  Fed Chairman Janet Yellen says he’s not alone–and that student loan debt is holding back jobs and the economic recovery.

Federal Reserve Chairman Janet Yellen says student loans may be holding down the housing recovery.

In her testimony to Congress yesterday, Fed Chairman Janet Yellen said student loan debt may be holding down recovery in the housing industry.  You can read about her comments here, in the Washington Examiner.

Just today I talked to a guy who how can’t buy a house because of student loans.  Chuck had low income for a couple years after grad school.  Now he’s doing OK.  His Federal student loans worked with him while his income was low.  But his private student loan put him in default.

He’s made monthly payments for two years on the private loans, but they still report him ad delinquent–so he can’t get approved to buy a house.  (The Federal loans have always been current.)

Before 2005, bankruptcy could clean up private student loans–now it can’t. One of the purposes of bankruptcy is to help people get back to good credit–so they can buy the things that other people make–and create jobs that benefit everybody.    

When Congress made bankruptcy harder and more expensive, they forgot about that.  And all of us are paying a price for that in today’s jobless economic recovery.

Posted by Robert Weed / in Virginia Bankruptcy / No comments yet

Madison did research on the bankruptcy means test.  Then she emails me for help.

I replied to Madison that I hope that I can.

Madison was afraid their family of three had too much income under the bankruptcy means test.

Last year I was able to get almost 130 families approved for Chapter 7 bankruptcy, even though they were over the bankruptcy means test cut off.  That was thirty percent of my cases.  And more than any other law firm in Northern Virginia.

Each case is different.  That’s why we go over our thirty seven page consultation form when you and I first meet.

We need a lot of information in order to really understand the best way to handle your case.

I talk to people almost every month who have been told by other lawyers that they have to file Chapter 13, because of the bankruptcy means test.   And after our detailed consultation, we can see there’s Chapter 7 eligibility.

Posted by Robert Weed / in Blog, Virginia Bankruptcy / No comments yet

Looking for a top-rated bankruptcy lawyer in Herndon, VA?

Let’s stop the phone calls ASAP and clear the debt.  You can eliminate the stress and take control of your life again.

I’m Herndon Bankruptcy Lawyer Robert Weed. You’ll like our friendly service with a smile.

For twenty years, I served people in Herndon from my bankruptcy lawyer office in Sterling, VA. I moved my Sterling office to Herndon June 15, 2018.

My new Herndon bankruptcy lawyer office is 13800 Coppermine Rd, Herndon, VA 20171.

My new Herndon Bankruptcy Lawyer Office is at 13800 Coppermine Rd, Herndon.

It Costs a Lot to Live Around Here

I’ve helped people file bankruptcy in Herndon since 1993.  I’ve talked to nearly a thousand people in Herndon and Reston about their financial problems.

I know why even people with strong incomes can need a “a new opportunity in life and a clear field for future effort.”  (That’s what the Supreme Court says is the purpose of bankruptcy.) It costs a lot to live here.

The high cost of living is one reason the number of Hendon bankruptcy filings totals two thousand total since 2007.

Children are expensive.  The average family size in Herndon is bigger than the rest of Fairfax county. The tech economy in Herndon has been hurt by budget uncertainties. All those factors explain why more of your Herndon neighbors have filed bankruptcy than you might expect.

The purpose of bankruptcy is to help you

Another reason the Herndon bankruptcy rate is high.  People in high income communities have something to lose!  The purpose of bankruptcy is to help you–there’s a reason Donald Trump’s businesses have been in Chapter 11 four times. (Donald Trump said that bankruptcy laws “do a great job”.)

Many people mistakenly think the bankruptcy is some kind of punishment.  Actually, bankruptcy is a tool to protect what you have.

Bankruptcy gives you a new start in five ways. The creditors can’t call or bill you; they can’t send you court papers. Your credit score will go up. You’ll sleep better. You’ll be smarter.

One reason I like being a bankruptcy lawyer:  I can help nearly everyone who comes to see me.

I can help nearly everyone who comes to see me.

The 2005 Bankruptcy Reform Was Designed to be Hard on High Income People

It can be tough for higher income people to get approved for a Chapter 7 bankruptcy.  The 2005 bankruptcy reform law tries to push all families over the median income into Chapter 13 payment plans.  (As of April 2019, the median income in Virginia is $91,781 for a family of three; $105,261 for a family of four.)  A majority of the families in Herndon are over that Virginia median income.  But few, when they get into financial trouble, could actually afford a five year Chapter 13 payment plan.  (Most Chapter 13 plans fail.) Five of the twelve highest income counties in America are in Northern Virginia.  I serve those counties.

I get more over-median income families approved for chapter 7 bankruptcy than any other lawyer in Northern Virginia. 

I’m a full time Bankruptcy Lawyer

My bookshelf in my Herndon office. Assembled it myself when I hoped we’d have in-person consultations soon.

Bankruptcy is all I do.  I know it’s hard to talk to someone about your financial situation.  But I can tell you–you’ll like our friendly service with a smile.

Adlo and Linda of Herndon VA said this:

There are no words to express our gratitude for the care, attention and expertise…above and beyond to help us with my husband’s bankruptcy and walking us through the whole process with patience and understanding. We are a senior couple and not very technical…God Bless You

Alicia of Herndon VA said:

Didn’t know what to expect

I got patience, a judgement-free environment, and so much education.

Melanie, of Herndon VA:

The process was easier that I thought, Mr. Weed was very good at explaining everything. Would definitely recommend.

You can read more of my over 885 five-star reviews, here.    When you read what they say, you can see the smiles.

Herndon bankruptcy rate–one family of every nine since 2007

Herndon is located in western Fairfax County.  Fairfax is the third highest income county in America, (Loudoun is first) and Herndon has higher income that the county average. In the thirteen years since the housing crisis in 2007, about one out of every nine families in Herndon filed bankruptcy. Are you surprised?  I’m not.

“I love being a Herndon bankruptcy lawyer, because I can help almost everyone I see.”

Herndon Bankruptcy Lawyer Q&A

Question:  Where are the bankruptcy hearings for people who file bankruptcy in Herndon. Are they in Fairfax Courthouse?

Answer: The bankruptcy hearings are NOT in Fairfax, or Herndon. The Bankruptcy Court is a Federal Court. The bankruptcy court in Alexandria, VA. covers all of Northern Virginia.  If you want to know more about what happens at the bankruptcy hearings, I have more info here.  

Question:  Why does they say bankruptcy gives people a fresh start?

Answer: The “”fresh start”comes from the Supreme Court in 1934. In the famous case of Local Loan v Hunt, the Supreme Court said “One of the primary purposes of the Bankruptcy Act is to relieve the honest debtor from the weight of oppressive indebtedness, and permit him to start afresh…”

Thanks for viewing my Herndon Virginia Bankruptcy information website.

Question:  Does where I live affect my bankruptcy eligibility?

Answer:  For high income people–over 60,925 for family of one; $110,000 for family of 4–you have to show your income eligibility on the “means test” budget. And for that means test budget, your rent allowance depends on what county you live in.  

People who live in Loudoun or Fairfax are allowed to budget around $400 a month more for a one-person family compared to people in Prince William.  And $500 a month more for a four person family.

What does that mean?  Some people living in Gainesville or Manassas who cannot get approved for a Chapter 7 bankruptcy, can get approved, living in Sterling or Herndon.

Question:  Can bankruptcy help with my student loans

Answer:  Right now, there is very little that bankruptcy can do to help your student loans.

But that’s likely to change; possibly very soon.

The Democratic Party platform this year promises to change the bankruptcy law, so that student loans are just another debt.  The Republicans didn’t have a platform at all.  After a new President is inaugurated in January 2020, that could happen quickly. It may happen quickly if the Democrats also elect a comfortable majority in the US Senate.  If Republicans keep control, or it’s closely divided, it might be a long struggle.  

Question:  Can I file bankruptcy and leave my spouse out of it?

Answer:  Yes, married people are allowed to leave one spouse out of the bankruptcy. But you are required to do a whole family budget.

Question:  Is my bankruptcy hearing at the Fairfax Court House?  

Answer:  The bankruptcy court is a federal court. The bankruptcy court for Herndon, all of Fairfax County, and all of Northern Virginia is in Alexandria.  During the covid emergency, you don’t go to the courthouse at all. The hearings are by telephone. 

Read Our Bankruptcy Lawyer Reviews! More than 800 Five-Star Reviews from People Like You

In my Herndon VA law office at 13800 Coppermine Rd, Suite 183.