Bankruptcy trustees are on Facebook too

May 11, 2013

You may want to think twice before you post that picture sitting in your friend’s Ferrari, if you intend to file for bankruptcy. It is not unusual for trustee to view your posts on Facebook or other social networking sites.

Bankruptcy trustees are paid a commission based upon on the assets that they recover. In this age of technology trustees are becoming increasingly more sophisticated in their search for hidden assets. Do not be surprised if the photos you post on Facebook of your vacation or posing with your grandmother’s diamond ring come back to haunt you if you file for bankruptcy.

Why do I have to list everything I own?

March 11, 2013

I have been asked this question by several new clients recently. So I guess it’s time to re-visit this topic.

When a person files for bankruptcy there are limits to what they can keep. Those limits are fairly generous and it is rare that a client will lose an asset they had hoped to keep.

In order to know which assets can be protected and which assets may exceed the limits, a person must list everything they own. It is highly unlikely (but not impossible) that someone will visit your house to view your property. If you conceal property or try to give it away so that they don’t have to list it, that could cause huge problems for the case and could even result in criminal prosecution.

If you have more assets than can be protected, good lawyers can often employ strategies to help you keep the items. So you are better off to be honest with your lawyer than to try to hide things.

Can I keep a credit card through bankruptcy?

October 13, 2012

Despite dire financial circumstances, some people have a very difficult time letting go of the false sense of security that having a credit card provides. Clients often ask me if it is possible to keep just one card.

The answer is, probably not. Generally credit card issuers subscribe to electronic notification services that alert them when a cardholder has filed for bankruptcy. Whether or not you owe a balance on the card, chances are that the credit card company will shut off access to the account, regardless of your desire to maintain a relationship with that company. This can happen without any notice to you.

You don’t want to find yourself at the gas pump with an empty tank of gas and no cash in your wallet, only to realize that the gas card can no longer be used.

I have even had clients use the last of their savings (without telling me) to pay off a credit card in hopes of being able to continue to use the card after bankruptcy. These people are often very disappointed to learn that their account has been closed anyway.

Most people will begin to receive credit card offers within weeks of receiving their bankruptcy discharge. What most people don’t realize is that credit card companies are very anxious to lure bankrupt debtors back into the world of high-cost credit.

While having one credit card can be beneficial to rebuilding credit, having a savings account to rely on for emergencies is a far better road to take. If you cannot afford to save, you cannot afford the high fees these credit card companies will charge.

The Bankruptcy Alphabet: “F” is for “Free Consultation”

May 16, 2012

I offer a free consultation for consumers who want to learn whether or not bankruptcy may be the right choice for them. Why do I do this? It is simple. Bankruptcy isn’t the right option for everyone. Most people who are filing for bankruptcy have very little money and are reluctant to spend it on something they aren’t sure about.

My job is not to “sell” you a bankruptcy, but to make sure that bankruptcy will resolve your debt problems. During the free consultation I evaluate all aspects of a person’s finances. Those include:

• assets
• debts
• income
• expenses
• lawsuits
• foreclosure/repossession issues
• tax issues

It is also important for me to understand a person’s financial goals, so that I can assess whether I can tailor a Chapter 7 or Chapter 13 bankruptcy to meet those goals. Something I find very helpful is when potential clients bring a list of questions to the appointment. We go through those questions one-by-one. That way I know I have addressed all of their questions and concerns, so that they can make an informed decision.

What is a Chapter 7 bankruptcy?

January 9, 2012

A chapter 7 bankruptcy is often referred to as a “straight bankruptcy” or a “liquidation bankruptcy”. In a chapter 7 bankruptcy someone is  usually able to discharge credit card debt, medical bills, old utility bills, etc. A common myth about Chapter 7 bankruptcy is that a bankruptcy trustee will sell all of your property. That is not true. Consumers are able to keep property which is classified as exempt. It is important to consult a lawyer to ensure that your property is exempt, and your alternatives to dealing with unexempt property.

A Chapter 7 banruptcy generally lasts 3 – 4 months. Most people emerge debt-free and retain most or all of their assets.

One important thing to remember about a Chapter 7 bankruptcy is that once it is filed, there is no right to dismiss it. So if a trustee discovers unexempt property after the case is filed, that property may be sold and the proceeds used to repay some or all of your debt. This is why it is critical to obtain proper legal representation BEFORE filing a Chapter 7 case.