Holiday Spending

The holidays are upon us, and they a great time to catch up with family and friends, and recollect on the year before. This is a time to hopefully relax and enjoy some comforts of life. However, the holidays are also notorious for stress. And some of this stress is related to money and finances.

Americans spend large amounts of money during the holidays by traveling and purchasing gifts. When your finances are already stretched, this can lead to lots of stress. No one wants to think about bankruptcy this time of year. But, sometimes it is a growing necessity due to credit card debt, which can feel like a relentless wave. Interest makes the idea of minimum payments hopeless. No matter what you do, you end up in the same place every month.

If you were considering bankruptcy, the time after the holidays is a great time to seek out a free consultation.  Removing or reducing your financial burden is a great way to start the new year. If you feel like you can’t keep up with growing interest and debt burdens, contact us at 412-414-9366 to set up a free consultation to discuss your situation.

Bankruptcy is not always necessary, but getting some feedback on your situation for free never hurts. Over the past 15 years I have literally talked to thousands of people facing the stress of mounting debt. There is often a solution.

In the meantime, have a happy and safe holidays.

Married Couples In Bankruptcy

Married couples are not required to file joint bankruptcies. One individual alone may file. Of course, both can file together as well. A common question I get is “I want to file bankruptcy, but my spouse does not want to be involved. Do they have to be?”

While they are not required to file jointly with you, there is certain information about your non-filing spouse that needs to be disclosed. First, the court will look at both incomes in determining the means test and the ability to repay. Even if only one spouse is filing, entire household income is used in determining the ability to repay. This includes income for things such as Social Security, retirement, accounts, pensions, or self-employment. This information cannot be omitted. The court will also want to look at any joint tax returns. Total household income will always be important to determine.

A second thing the court will want to look at for a married couples is equity in a marital home. Even if only one spouse is filing, the home and its equity must still be exempted from your creditors. If the home is owned jointly in a marriage, the equity in that home is split in half for bankruptcy purposes. That amount must be exempted. This will go for other assets as well, such as second properties, rental properties, vehicles, or marital savings.

A final thing which will be important to discuss with your bankruptcy attorney is whether it makes more sense to file jointly to account for all debts. In a scenario where there are many joint debts, filing for only one spouse usually does not make much sense. If both spouses cannot be convinced to do so, they’re not required to. However, if they later to decide  to file on their own it will entail all new attorney and filing fees. It’s best to think long and hard whether or not filing jointly is the best way going forward.

If you and your spouse are considering whether or not to file bankruptcy, call us at 412-414-9366. I would be happy to set up a free consultation to discuss your situation and see if bankruptcy is an option for you.

Gambling Debt and Bankruptcy

People are increasingly calling me with gambling debt problems. It’s not a surprise, as online gambling and sports books have rapidly proliferated the last several years. Fortunately, bankruptcy can help with these debts. However, there are several additional issues that must be accounted for.

The first issue with gambling that is that you cannot have recent credit card usage to pay the debt, otherwise it may be considered “abuse” of the credit cards. This would allow the credit card and finance companies to object to the discharge of the debt, leaving you with the debt . It will be important to show a period of time between your last credit card usage for gambling and the filing of the bankruptcy, normally between 90 and 180 days.

Additionally, it may show clear intent if you enter a program to deal with the gambling issue, such as gamblers anonymous. Bankruptcy aside, this would be a good idea as gambling addiction is a serious addiction , that should be treated like all other addictions. Regardless, there will need to be time between your gambling losses in the filing of the bankruptcy.

The second main issue with gambling debts is that they tend to reoccur even after they’re discharged in bankruptcy. I have had several clients call not long after the Chapter 7 discharge who are in a similar predicament as they were before they filed. This is problematic because you can only file a Chapter 7 bankruptcy every eight years. Going back to my earlier thought, it really shows the importance of treating gambling as the addiction that it is and seeking help. In reality, bankruptcy is only temporary help with the problem. A longer term solution will require seeking the help of addiction specialists.

If you are facing gambling debts, contact us at 412-414-9366. I would be happy to discuss your situation, go through the details, and make sure that you qualify. It is a common problem faced by many Americans at the moment, so there is no need to judge yourself, or beat yourself up about it.

Beware of "Unsecured" Credit Union Loans

I have been speaking with a lot of potential clients who have taken out personal loans from credit unions, believing those loans to be unsecured when, in fact, they are secured by personal property. This can become very problematic in filing a bankruptcy.

These loans often seem attractive at the time because they allow people in a tight spot to consolidate several credit cards at a lower interest rate. However, do you need to be very careful when taking out any of these loans. Oftentimes, and especially when dealing with credit unions, it turns out these loans are secured by your personal property. That means if you fall behind or default on the loan, the credit union may be able to take your car or other personal property.

I have had a lot of potential clients who tell me that they are sure the loan is unsecured, until I have them get me a copy, and upon reading the loan document, see that it is secured by property. Clearview Federal Credit Union in particular will often secure a personal loan against a car loan that you have already taken out with them, and they will even secure personal loans with FUTURE car loans you haven’t even taken out!

These sneakily secured loans are a problem in bankruptcy, because unlike unsecured loans, they are not wiped out unless you are willing to turn in the secured property. For some clients this may be a car that doesn’t run and it isn’t a big deal. But I have had other clients with cars and campers and other personal property that they did not want to surrender. So, the loan ends up surviving the bankruptcy.

Be very careful in reading what you sign when you take out ANY loan, especially looking to see if any of your property is being used as a security against the debt. Regular banks, and not just credit unions, are capable of doing this as well, though most of what I see is either credit unions , or certain companies, like Mariner or Lendmark Financial.

Call us at 412-414-9366. If you want to discuss whether or not your personal loans will be discharged under bankruptcy. I would be happy to set up a free consultation to discuss your situation!

Funding Your Chapter 13 Bankruptcy

Chapter 13 bankruptcy plans require regular automatic payments to be made to the Chapter 13 bankruptcy Trustee. This can generally be done in one of two ways.

The first way is a wage attachment served directly on your employer and payroll department. A wage attachment motion will be filed in the Bankruptcy Court and signed by the bankruptcy judge. I would then take the signed order and serve it on your payroll department. In this case, payments will come directly from your paystub, before reaching your bank account, as a voluntary garnishment. If you change jobs, you will need to let your bankruptcy attorney know right away, so that a new wage attachment can be filed.  This method does not cost you any money. It is your responsibility, however, to make sure that the payments remit every paycheck.

The second method for funding your Chapter 13 bankruptcy plan is through a direct bank attachment. This is done through the website tfsbillpay.com . There is a nominal fee for the service, but it allows you to make payments directly from your bank account that are secured and easily trackable. Once again, it is your responsibility to make sure that the payments come out every month, or whatever frequency that you choose to make them. 

The method that you choose will depend on your circumstances and wishes. If you do not want to have your employer know about your case, the bank attachment is the best choice. Also, if you do not receive regular paystubs, or your income varies widely, the bank attachment is probably the best option.

If you wish to avoid any fees, or if you believe it is simplest for the money to come out before it hits your bank account, the wage detachment is the best option. You can discuss these options with your bankruptcy attorney in more detail. If you’re considering filing Chapter 13 bankruptcy and have any questions, feel free to reach out and set up a free consultation by calling me at 412-414-9366. I would be happy to discuss your situation and see if there is a good bankruptcy option for you.