Articles Posted in Bankruptcy Pre-Planning

Stop – if you are thinking of filing bankruptcy – do not do any of these transactions until you have spoken with me. Waiting a few days will not matter. “Better to be safe than sorry.”  There is a right way to do things before you file bankruptcy, but there are also a whole lot of wrong ways to do things. Some actions could get you into a lot of trouble.  Put it on hold and let me give you the information you need to understand your options.

  • Don’t pay back money you owe to family members.
  • Don’t pay your friends back money you owe them.

Cheap Lawyers are everywhere, but you may not be able to afford them.

You can see a lot of lawyers bragging about being the cheapest. Search on the web and you will see ads for “Cheap Bankruptcy Attorney,” “Low Fee Bankruptcy.”

We all know that quality and cheap don’t go together. If we buy cheap we know it will cost us more in the long run. You get what you pay for. This is no surprise. We expect it and make buying decisions knowing what will happen. When it comes to hiring a lawyer, hiring the cheapest is not the way to go. The risks are just too great.

Your Debts, My Debts and Our Debts.

Married and struggling with money problems? Thinking about filing bankruptcy? You know married couples can file bankruptcy together, they do it all the time. In most cases it’s better for them if they do. But, what if your spouse doesn’t want to file or has very little debt? Did you know you can file by yourself? There are many situations that arise when it makes more sense for just one of you to file by yourself. In some cases, you both need to file, but you each may need to file a different type of bankruptcy.

Question 1. “What debt are we trying to get rid of?”



retirment optionsMany people believe they will lose their retirement money if they file for bankruptcy.  This is not true.  Many clients meet with me and state that they “cashed out their retirement and are ready to file bankruptcy.” This is not necessary.  Retirement accounts and pension plans are fully protected in bankruptcy.  There are federal and Mississippi laws that protect your retirement money when you file bankruptcy.  This includes accounts like 401(k), IRA, Roth IRA, SEP, 403(b), Keoghs, profit-sharing plans, and defined-benefit plans.  Any ERISA Qualified Retirement Account is protected.  In most cases, every penny you have in your retirement account is fully protected, regardless of the amount.  But traditional IRAs and Roth IRAs are only protected up to a total amount of about $1.2 million.

Even if your retirement account is not ERISA-qualified, it will still be protected in bankruptcy by both federal and state law.  Any retirement account that is exempt from taxation under the Internal Revenue Code is also fully protected by other federal laws.  Leave your retirement money alone.  Let it work for you over the long term and don’t worry about losing it if you need to file bankruptcy.

rental propertyThinking about walking away from your rental property? You are not alone. Over 11 million people are upside down on the house they live in. The same conditions affect your investment property. To make things worse, when tenants can’t pay their rent, you must still come up with the monthly note. Being a landlord is hard work when times are good. Tenants who can’t pay or empty rental homes will jeopardize your own home and financial security.  Filing bankruptcy allows you to give the property back to the mortgage company without having to pay for the property.

Here are some things to consider before you file bankruptcy so you don’t make a mistake that could get you in trouble or cost you a discharge.

1. Talk to a bankruptcy attorney sooner rather than later.  Find out right now how bankruptcy can benefit you.  Most people who file should have been in to see a bankruptcy lawyer six months to a year before they made the appointment. Instead they struggled and fought to survive, draining all their savings and retirement, doing everything they could to keep from getting information that could have led to their financial recovery and a new life.

2. Don’t use your credit cards. Some credit card charges may have to be paid if they are made right before you file.

Bankruptcy Courts use “replacement value” when determining the value of your assets. Replacement value is defined in the Bankruptcy Code as the price that a retail merchant would charge for property of the same kind, considering the age and condition of the property at the time its value is determined.

This is not the cost to replace the item with a new one or what you could sell the item for; it is the cost that a retailer would sell the used item for in the condition it’s in now.

In cases such as used clothing, furniture, computers, TV, etc. it would be the value of the items if you had a yard sale or placed them on eBay.

No.  Just because you are filing for bankruptcy, it does not mean you will automatically Keep your assetslose everything you own.  You are entitled to claim “exemptions”, which are things that creditors cannot take from you.  You must be honest with the Court and include a list of all your assets.  To keep your assets, you must list them.

You can expect problems with your case and can lose your property if you do not list it or you are not completely honest about what you own.  You must list everything you own, have in your possession, will own in the future, or might have an interest in now or in the future. For example, property you would inherit from a parent in the future, the $5 in your wallet, the car or house that is “owned by the bank”, and your baseball card collection.  Everything means everything.

It includes things that you are making payments on (cars, real estate, furniture); things you own with someone else (including your spouse); things that have your name on the title or deed as the legal owner (even if you do not have possession of it); things that you are holding for someone else (college account for your child); things that you may not think have a lot of value (household goods and clothing); and claims you might have against someone else such as a claim for injuries in an auto accident.

Mississippi is leading when it comes to mortgage delinquencies. In October 2011, there were more homeowners in Mississippi behind on house notes than in any other state of the union.

The Mortgage Bankers Association reported that there are 4.2 million homeowners across the nation more than 90 days late on their house note or are already in foreclosurStop foreclosuree status. Is this the indication of us being on the road to recovery that the media would us believe?

The fact is that mortgage service companies are not willing to provide modifications to help homeowners and as a result, foreclosures continue to rise. If you want to save your house, you cannot wait until the last minute, thinking a modification will come through.  Get your documents together and meet with a lawyer now that handles bankruptcy and foreclosure defense to learn what options you have available.  Get the information now  – before you need it.  Be prepared.  Plan ahead.  Think about it – what good is buying car insurance after the wreck? I continually meet with people that come in after the foreclosure sale date is set trying to figure out what they can do. In most cases we can still help and save the house, but it would have benefited the people so much more to have met with me as soon as their payments started falling behind.  Timing matters – and knowing your options is worth it’s weight in gold.  If you’re online, researching foreclosure because you’re worried about losing your home, the time is NOW to speak with someone. The most important thing is to save the home. There are options – the longer you wait, the less options there may be.