Legal Articles, Bankruptcy & Debt
Notice to creditors is critical to eliminate debts. Sending a notice to too old an address may not work.
If a creditor does not receive notice of a bankruptcy, their debt may not be eliminated by the bankruptcy case, even if the case is successful. If addresses are not quickly corrected, or a creditor added soon after filing, it may not be possible to add the creditor later. If an address is incorrect or outdated, the debt may not be eliminated. In one recent decision, the debtor sent a notice to an attorney that had represented the creditor four years earlier instead of to an address shown on the judgment to the creditor itself. While the debtor 'got away with it' in this particular case (though incurring substantial additional fees in the process), under very slightly different circumstances the debt would not have been eliminated.
Courts may disallow homestead exemption if property is put up for sale during case or within a year after
A number of states may limit whether a homestead remains exempt if the debtor has it for sale when the case is filed, or puts it up for sale between the filing and the date the case is completed, or, in some cases, if it is sold within a year after filing. If the home is sold during a case, it is often critical to put all funds in a segregated bank account where they are never mixed with any other funds, not to use any of the funds for anything other than purchase of a new homestead in the same state, and to use the funds within a reasonable time (which may be one year or less) to purchase a new home.
Means Test in chapter 13 and interest to unsecured creditors
The 2005 Bankruptcy Abuse and Consumer Protection Act added a new budget test, called the means test, to determine whether debtors can file chapter 7, and if they file chapter 13, how much needs to be paid to unsecured creditors. One ancillary issue arising from this test is whether interest needs to be paid to unsecured creditors when debtors are paying unsecured creditors in full during the plan but not paying the full amount shown as available in the means test. Courts give conflicting answers on this. One recent decision ruled no interest is required.
Consumer Debt Can Cause Stress, Depression, Divorce
Discussing numbers and statistics on the national scale is important, but if you have fallen heavily into debt, you may not feel like that information helps you out much in terms of your own financial distress.
Student Loan Debt Crisis Spans All Ages
Recent studies show that while younger generations and millennials are having a difficult time with the burden of student loans, so are other age groups like Gen X’ers and Baby Boomers. The student loan crisis is even making an impact on retirement plans.
How Long Will It Take My Court Judgment to Go Away?
The court judgment is a long-term order. In California, the creditor can continue their collections activities for up to ten years in trying to see the debt satisfied. After that, they can also renew the judgment with the court for another ten.
Student Loan Crisis: No Hope in Sight
With interest rates jumping, student loan borrowers are often stretched too thin, both mentally and financially. This is resulting in financial constraints that affect the economy at large, as they are unable to spend on large items like homes and cars.
Have Your Consumer Rights Been Violated Leading Up to A Collections Lawsuit?
Accumulating debt and escalating money problems are often accompanied by a sense of shame. Creditors and debt collectors are usually aware of any typical vulnerability debtors may have and will use that to their advantage.
Student Loan Servicers in Trouble: Navient May Experience Greater Leniency Than Expected
Sued by both the Justice Department and more recently the Consumer Financial Protection Bureau (CFPB), Navient administrators have said that they will fight back against these lawsuits.
No Process of Service: Will the Judge Dismiss My Case?
Generally, if the process server does not hand the summons directly to you or to someone of age who resides in the home with you, it should not be possible to have a default judgment granted against you.
