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13

Apr 2012

Replacing your lost social security card before bankruptcy

Posted by / in Virginia Bankruptcy / 3 comments

Replacing your lost social security card before bankruptcy

At your bankruptcy hearing, you are supposed to show your bankruptcy trustee a picture ID and evidence of your social security number. The best way to prove your social security number is with your social security card.  However, a W-2 will also work.  (At the bankruptcy court here in Alexandria, VA, your own tax form is NOT good enough. And your passport does NOT have your social security number on it.)

For self employed people, there may be no W-2.  So what to do?

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22

Feb 2012

After bankruptcy: Keep watching your credit report

Posted by / in Virginia Bankruptcy / 70 comments

Ken and Mary filed bankruptcy with me three and a half years ago.  They had built back to a credit score in the high six hundreds.

Until last week.  Last week, Bank of America “updated” their credit report, replacing “bankruptcy” in 2008 with foreclosure, January 2012.  Ken first noticed this on Experian, but when I had him check, it also showed up on Trans Union and Equifax.  That wrecked their good credit.

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02

Jan 2012

Bankruptcy and real estate taxes: Counties are desperate

Posted by / in Virginia Bankruptcy / 6 comments

Bankruptcy and real estate taxes:  Counties are desperate

 

Filing bankruptcy gets rid of most of your debts; but it does not necessarily get rid of most of your problems.

For some people, real estate that they already moved out of is a problem.  Filing bankruptcy does not mean the bankruptcy court takes over your house.

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26

Oct 2011

Do I need to file business bankruptcy?

Posted by / in Virginia Bankruptcy / 2 comments

Do I need to file business bankruptcy?

A lot of people who think they need to file business bankruptcy really don’t.   They often need to do a personal bankruptcy, instead.  And they need to just dissolve their LLC or S corporation.  Does this apply to you?

You probably don’t like to hear from me that you need to file a personal bankruptcy.  After all, Donald Trump has been through three or four business bankruptcies and NEVER filed a personal bankruptcy.  Why?

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24

Sep 2011

Before bankruptcy: three reasons to change banks

Posted by / in Virginia Bankruptcy / 72 comments

Before bankruptcy:  three reasons to change banks

When people talk to me about filing bankruptcy, I often tell them to change banks.

Here are three reasons.

1.   If you have money in a bank you owe money to: change banks.  A bank is allowed to pay themselves for money you owe them.  If you have money in Bank of America and you have a mortgage, or equity loan or signature line with them, they can grab your money to pay themselves.

Credit Unions are especially quick.  And credit unions can also offset credit cards, too.  (Banks are not allowed to do that.)  As a precaution, get your money out of any bank you owe money to.

Virginia Bankruptcy Lawyer Robert Weed

“Before you file bankruptcy, here are three reasons to change banks.”

2.  If you have money in Wells Fargo: change banks.  Even if you don’t owe them any money, Wells Fargo will freeze your bank account when they hear about the bankruptcy.  They think bankruptcy law requires them to do this–even though no other bank thinks that way.  (Henry Sommer, former president of the National Association of Consumer Bankruptcy Attorneys, jokes that maybe they just do it to collect bounced check fees.)

Whatever the reason, close your account at  Wells Fargo.

3.  If you are in danger of garnishment: change banks.

Do you have a warrant-in-debt or other court paper?  Once a creditor has a judgment against you, they can garnish your bank account.

How do they know where you bank?  They will look at the last check you wrote them–maybe a year or more ago–and they will hit that bank.  So, make sure when they do that, you don’t have any account there any more.  (Just getting a different account number at the same bank doesn’t work. )

Where should you go?  I like to tell people the universe is full of banks.  As long as you don’t owe them any money, and it’s not Wells Fargo, and you haven’t banked there before, any bank will do.

(Some people are afraid as soon as they open a new bank account, everyone will know.  That’s not true.  This is still America.  Your private business is still, mostly, private.)

Some people’s credit is so bad they have trouble opening a new account.  If you are worried about that, try TD Bank.  They will open an account for people who can’t get one anywhere else.  (People also tell me they really like TD.)

Another place is Woodforest Bank.   You can find them in the big Walmarts in Manassas and Fredericksburg.

Here’s one thing you should not do.

Don’t put your money in someone else’s bank account.  That is not allowed.  If you put your money in someone else’s name, you can lose your bankruptcy discharge.  When your bankruptcy is over, the court would tell everybody you owe money to, that it’s open season on you again.   Don’t do that.

While we’re talking about bank accounts, close your orphan accounts.  You know, those accounts that still have $5.00 in them from when you used to bank there, where you used to live.  Close them.

When we go to the bankruptcy court together, you have to turn in account statements for all your accounts.  You don’t want to be fumbling around with six accounts when you only really need one.  You also don’t want to get sent home from court to look for that last account statement on the account you never use.  Close them!  You’ll save yourself (and me and the bankruptcy court) a lot of headaches if you take my advice on that.

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31

Jul 2011

Your bankruptcy forms: budget the buzzards

Posted by / in Virginia Bankruptcy / 1 comment

You see them eating along side the interstate, and wonder how they dodge the on-rushing traffic.  That’s the “buzzard” — formally known as the North American turkey vulture.

For bankruptcy, budget the buzzards.

Last week a buzzard hit my car, snapped my antenna, and added $300 to my car repair budget. On your bankruptcy budget, be sure to "budget the buzzards."

One didn’t dodge the traffic on Friday.  It took off the wrong way from the median, slamming into the windshield of the car in the left lane, ricocheting along the side of my car, snapping off my radio antenna.

Getting a new antenna will cost me–I’m guessing–maybe $300.  That $300 car repair is now part of next month’s budget.

This is not the only unexpected repair I’ve had this year from critters.  In March, my rear lights went out.  Fuse?  No.  Apparently a raccoon had acquired a taste for rubber and road salt, and had gnawed my wires.  That’s was $600.

What does that have to do with bankruptcy?

To get your bankruptcy approved, we have to do a budget (two actually) that shows the court why you can’t afford to pay.  And maybe half the people I see start with a transportation budget that is way too low.  Like two or three hundred dollars a month too low.

So, I’m telling you, when you fill in your forms, “budget the buzzards.”  There are plenty of unscheduled things that can go wrong with your car–and a lot of them will.

You are supposed tell the bankruptcy court how much transportation costs, based on a monthly average.  People have a pretty good idea what they are spending on gas–because we all buy gasoline every week.

But lots of people come in way too low on repairs and maintenance.  Last month you didn’t spend anything on maintenance–maybe you were driving with a check engine light, but knew it would cost too much to check.

So you guess maybe twenty or thirty bucks a month on car maintenance.  That’s not right.

Even if you are not averaging $100 a month on critter repairs, like me this year, you can expect to take gravel in your windshield, or a nail in your tire.

If you are lucky enough to avoid all that, your brakes will still wear out, you may need new belts and hoses, you are probably way overdue for new shocks and struts, and you may have major repairs when it’s time for the emissions inspection.

So, please do not write down $25 per month.  You haven’t budgeted the buzzards.

Claiming only $25 a month for maintenance and repairs sets up a big problem getting getting the bankruptcy approved.  The Justice Department lawyers can ask for your bankruptcy to be thrown out based on “totality of the circumstances.”  This “totality of the circumstances” test is found in Section 707(b)(3)(B) of the bankruptcy code.  If one of your circumstances is that you claim you have $350 left over each month, they are going to ask for your bankruptcy to be thrown out.

Suppose you get that totality of the circumstances objection. Then, in addition telling me what your transportation actually costs, we have to file new bankruptcy papers and maybe make an extra trip to the bankruptcy courthouse together, for you to explain it to the judge.  Who wants to go through all that?

People tell me, “I don’t want the bankruptcy court to think I’m wasting money.”  That’s true, you don’t.  But you also don’t want to tell them you have money left over when you are actually living paycheck to paycheck.

So, budget the buzzards.

(Oh, and did you know, more than a million Americans every year have car accidents with a deer?)

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09

Jul 2011

I filed bankruptcy and they are still calling! When do we sue?

Posted by / in Virginia Bankruptcy / 66 comments

When you file bankruptcy, your creditors are required to leave you alone.

Section 362 of the bankruptcy law automatically tells them to stop any action or act to collect a debt from you.  They can’t call, they can’t send bills, they can’t take you to court.

But what if they don’t stop?  Should we remind them nicely?  Or just sue?

Here are the rules I worked out after handling twelve thousand bankruptcy cases.

Virginia bankruptcy lawyer Robert Weed

When a creditor keeps calling after your bankruptcy is filed, here are my rules on when we should sue.

First, we give everyone a pass for the first two weeks.  It takes a while for the court to send them a notice of the bankruptcy, for the post office to deliver it, and for them to update their records.  Two weeks seems fair for all that.

Second, we only sue if you are mad.  Suppose they call, and you tell them to stop; and they stop.  If your feeling is “no harm, no foul,” then that’s fine.  If you are upset or angry–maybe based on your history with this same creditor–then I’m upset, too.

Third, we give the benefit of the doubt to small outfits, especially doctors.  If a doctor’s office keeps billing you, they should get two warnings before we bring them in front of a judge.  Maybe they are doing it on purpose, but I believe in giving a break to little guys.

Fourth, we’ll forgive one honest mistake.  Let’s say American Express calls and demands payment three weeks into the bankruptcy.   You tell them to stop and they stop.  Maybe they lost the notice the court sent them about you.  They probably get a thousand bankruptcy notices–every day!   A handful of those get lost in the mail; and another handful might get lost in shuffle.  We all make mistakes.

Fifth, we get mad when people lie to you.  Instead of saying, oops, sorry our mistake, sometimes they come out with a lie.

Here are some lies we’ve heard in the last few months.

“Your lawyer filed the wrong kind of bankruptcy.”

“Bankruptcy doesn’t cover interest on this debt.”

“You filed personal bankruptcy and this is a business debt.”

If they try to hand you a line, we go after them.  We sue every time.  We want it to be expensive for companies who train their collection departments to be quick with a lie.

Sixth, we always go after debt collectors.  Not the original creditor, now, but debt collectors like NCO, LVNV, Midland, or Zwicker.  Why?

Because of the Fair Debt Collection Practices Act.   Collectors had a history of being bad, so in 1978 Congress put them under a double check requirement.   In order to excuse a mistake, they first have to show it was an honest mistake; then they have to show they specifically tried to prevent that exact mistake.

So, first they have to show they honestly didn’t get the notice from the bankruptcy court.  Second, they have to show that they ran their own double check anyway to see if you filed bankruptcy before they called you.

Of course, they never really do that.  So we always sue.

Finally, we always sue people who don’t deserve the benefit of the doubt.

There’s one giant credit union based in Northern Virginia that never gets the benefit of the doubt from me.  Before bankruptcy, they skate right up to the edge of the law, and get away with it.

Code of Virginia § 18.2-429 makes it a class 3 misdemeanor to cause someone’s phone to ring with the “intent to annoy.”  This credit union calls people with the intent to annoy.

If your ex called you four or five times a day after you told them not to call, he (or she) would get prosecuted.  This credit union is not going to get prosecuted–even though they do the same thing.

But once the bankruptcy is in place, I go after them for the slightest slip-up.  Every time.  They don’t act like a respectable business;  I don’t treat them like one.

PS  Click here for our litigation intake form if you are one of my bankruptcy clients, and a creditor is still harassing you.  Get us the info, so we can get after them right away.

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05

Jul 2011

After bankruptcy: USAA may cancel your car insurance

Posted by / in Virginia Bankruptcy / 57 comments

When you file bankruptcy, most banks don’t take it personally.  USAA does.

If you file bankruptcy on USAA, they will cancel your car insurance.

So if you file bankruptcy on a debt to USAA, they may cancel your membership.  (The small print on their website tells you that you are not really a member of anything.)

Although they are a bank, USAA acts like a credit union.  (You can file bankruptcy an a credit card with Citibank, for example, and still bank with them.  But if you file bankruptcy on a credit card with a credit union, they will close all your accounts and fire you as a customer.)

Eligibility to have their car insurance is limited to service members, veterans and their families.  If you default on, or file bankruptcy on, one of their loans, they can send you a letter notifying you they will cancel your insurance.

People I know who bank or have insurance with USAA, really love them.  So losing that relationship because of bankruptcy, can be emotional.

On the other hand, the world is full of banks.  And there are plenty of places you can get car insurance, too.

So.  If you owe maybe $500 on their credit cards and you want to stay with them,  pay the $500.  Before you file your bankruptcy.  But if you owe $5000, that’s another $5000 you are saving when you file bankruptcy.

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02

Jul 2011

Virginia Bankruptcy Lawyer Endorses Chap Petersen for Senate

Posted by / in Virginia Bankruptcy / 2 comments

Filing bankruptcy got easier in Virginia on July 1.  The exemption for cars increased to six thousand dollars.  Sen. Chap Petersen helped change that law.

That’s why I’m endorsing State Senator Chap Petersen, Democrat of Fairfax.

Sen Chap Peterson

Sen Chap Peterson, Democrat of Fairfax, helped people knocked down by the recession to get back up.

Bankruptcy is set up by the Federal government.  But each state sets its own rules on what you are allowed to keep.   Your “exemptions” are what you can keep.

Before, Virginia law allowed people to keep a paid for car worth only two thousand dollars.  (Virginia also has a cash exemption–called a “homestead”–of five thousand dollars.  People filing bankruptcy used that “homestead” to keep their car.)

An exemption for a six thousand dollar car is more realistic.

Senator Chap Petersen is one of three legislators who helped the most.  He’s the only one who has an opponent in the November 2011 elections.  (Virginia holds state elections in the odd years.)  The others who helped were Del. Mark Cole, Republican of Fredericksburg.   And Del. Dave Albo, Republican of Springfield.

Sen. Chap Petersen represents Vienna, Fairfax and part of Centreville north of I-66.

Please look at this map.  If you live there, please vote for Sen. Chap Petersen, November 8, 2011.

Do bankruptcy exemptions matter to everybody?  Even people who never have to file bankruptcy?  I think so.   Let me explain.

The purpose of bankruptcy is to allow people knocked down by life to get back up.

Imagine someone who has lost their job–because of the recession or whatever reason.  And then lost their house.   All that’s left is money to put down a deposit on an apartment–and a paid-for Chevy Malibu.   Should the bankruptcy court take and sell the Chevy?  How is that person supposed to  get a new job and get to work?

If the person can’t get to a new job, then what?

The purpose of bankruptcy exemptions is to leave people with enough to start over.

That’s why the Virginia General Assembly increased the car exemption in 2011.  And that’s why all of us owe thanks to Del Dave Albo, Del Mark Cole, and Sen. Chap Petersen.

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