Are veterans benefits income under the Chapter 7 means test?

If you are a veteran, do your veterans' benefits count as "income" for purposes of qualifying for Chapter 7 bankruptcy relief? Your income affects your eligibility for Chapter 7 bankruptcy -- the higher your income, the more difficult it may be for you to pass the Chapter 7 "means test." Unfortunately, you must count your veterans' benefits as income when filing for Chapter 7 bankruptcy. However, if you are a disabled veteran, you may be exempt from the means test altogether.

Chapter 7 Income Requirements: The Means Test

In order to be eligible for Chapter 7 bankruptcy relief, you must meet certain income and expense requirements. If your monthly income is less than or equal to the median income in your state, you can file for Chapter 7 bankruptcy (assuming you meet other Chapter 7 eligibility requirements.) If your income is higher than the state median, you must pass the Chapter 7 means test, which looks at your disposable income after deducting certain expenses from your income.
The lower your income, the easier it is to qualify for Chapter 7 bankruptcy.

Veterans' Benefits Count As Income

Unfortunately, you must include any veterans’ benefits you receive when calculating your income for Chapter 7 bankruptcy. Veterans' benefits may include payments for healthcare, living expenses, and disability. In fact, for purposes of the means test you must include most types of income, other than Social Security Benefits, and in some states, unemployment compensation.

Exception to Means Test for Disabled Veterans

If you are a disabled veteran, you may not have to take the means test at all in order to qualify for Chapter 7 bankruptcy.

If you are a veteran, you are exempt from the means test if:

• you are considered “disabled,” as defined by bankruptcy law (see below), and
• you incurred the debt while on active duty or performing a homeland defense activity.

What Is the Definition of "Disabled"?

To qualify as disabled, a veteran must be either:

• rated by the Veterans Administration as at least 30% disabled, or
• discharged as a result of a disability incurred in the line of duty.

Visit us today!

www.markcarterlaw.com

Harassment from debt collectors, know your rights!

The Fair Debt Collection Practices Act was passed in 1977 to protect consumers from abusive debt collectors. Here's a closer look at the rules a third-party debt collector must follow when collecting a debt.

Contacting a debtor.
A collector may contact you in person, by mail, telephone, telegram or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Contacting a third party about your debt.
If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people but only to find out where you live, what your phone number is and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.

Giving written notice.
Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe, the name of the creditor to whom you owe the money and what action to take if you believe you do not owe the money.

When a consumer doesn't owe the money.

A collector may not contact you if within 30 days after you receive the written notice you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

No harassment
Debt collectors may not harass, oppress or abuse you or any third party they contact.

Debt collectors may not:

• Falsely imply that they are attorneys or government representatives.
• Falsely imply that you have committed a crime.
• Falsely represent that they operate or work for a credit bureau.
• Misrepresent the amount of your debt.
• Give false credit information about you to anyone, including a credit bureau.
• Send you anything that looks like an official document from a court or government agency when it is not.

Debt collectors may not state that:

• You will be arrested if you do not pay your debt.
• They will seize, garnish, attach or sell your property or wages unless the collection agency or creditor intends to do so and it is legal to do so.
• Actions, such as a lawsuit, will be taken against you when such action legally may not be taken or when they do not intend to take such action.

No unfair practices
A debt collector may not engage in unfair practices when they try to collect a debt from you.

Debt collectors may not:

• Collect any amount greater than your debt, unless your state law permits such a charge.
• Deposit a postdated check prematurely.
• Use deception to make you accept collect calls or pay for telegrams.
• Take or threaten to take your property unless this can be done legally.

Being Harassed?  Call me today!  I can stop the madness.  www.MarkCarterLaw.com

 

 

Medical Bankruptcy: A Growing Phenomenon

The problem of medical expenses in the U.S. economy has been gradually (and sometimes not so gradually) increasing over the past 50 years.
In recent years, that growth has accelerated to the point that in 2003, medical costs made up more than 15% of the U.S. Gross Domestic Product (GDP). If we continue as expected, that percentage could grow to approximately 33% by 2040.

Medical Bills Are Often a Key Cause of Bankruptcy

People who've experienced an illness or injury and found themselves buried in bills (even if they have health insurance) may consider >filing bankruptcy as a way to get out of debt.
Although people tend to have a lot of questions about filing bankruptcy, bankruptcy was created to help people resolve overwhelming bills so they can move forward.

There are two main types of personal bankruptcy: Chapter 7 bankruptcy (debt discharge) and Chapter 13 bankruptcy (debt repayment plan).

Chapter 7 bankruptcy involves the debt discharge, which eliminates unsecured debts, which are debts not tied to property, such as medical bills, credit cards, utility bills and some personal loans.
A Chapter 13 bankruptcy filing is a little different, because it involves setting up the filer on an interest-free debt repayment plan. This is generally best for people who have unsecured debt and secured debt, which is debt tied to property, such as a mortgage, that they want to keep. Chapter 13 bankruptcy has helped millions stop foreclosure, repay their debts and stay in their homes.
When you or a loved one is injured or ill, what's important is focusing on getting better--not worrying about excessive medical bills.

Call us today!  We can help.  http://www.markcarterlaw.com

What Does It Mean to Have Judgment Filed Against You?

Are judgments considered secured debt? Or, are they only considered secured to the point of being a lien above and beyond any exemptions? Isn’t a judgment simply a finding by the court that you owe a debt? I am particularly interested in how judgments are dealt with in a chapter 13. I’m trying to avoid filing a 13 while I wait to see what happens with my income (up or down), and I could feasibly live through a few months of wage garnishments if necessary. However, if judgments themselves create a problem, maybe I should just file?

A judgment refers to a decision by a court that has been entered into the public record. Before a judgment can be issued, a lawsuit must be filed against you. If you do not file an answer to the lawsuit within the time period required by law (usually 20 to 30 days after service of the lawsuit on you), the plaintiff can ask the judge to issue a “default judgment.”

You can also negotiate a “consent judgment” with the plaintiff – in a collection case, a consent judgment usually includes payment terms. You can also file an Answer to the lawsuit and go to trial. The decision by the judge or jury – whether favorable or unfavorable – will be set out in a judgment.
If a judgment has been issued against you in a collection case, your creditor becomes a secured creditor instead of an unsecured creditor. Secured creditors have more rights than unsecured creditors. In most States, a judgment creditor can satisfy its judgment by garnishment against your bank account or your wages, although in some States (such as California), the judgment creditor must take additional steps to have the right to take your property away from you.  A judgment creditor can also place a lien against any real estate that you own in the public record. This lien will encumber your property and will need to be paid before you can sell your real property.

Every State has its own rules about how much a judgment creditor can seize from you at any one time and about the judgment creditor’s rights against real and personal property. In Georgia, where I practice, the process by which a judgment creditor can move against a judgment debtor is relatively fast and not particularly burdensome. In other States, the judgment creditor must expend time and money to secure its judgment. California bankruptcy lawyer Cathy Moran writes that judgment creditors must file additional court paperwork before it can excercise their rights against California judgment debtors.

In a Chapter 13 bankruptcy, a judgment creditor has the right to file a secured claim. Typically, secured claims are paid in full in a Chapter 13 and they are paid before unsecured creditors.
In some jurisdictions, debtors routinely file a motion in bankruptcy court to avoid the lien. This procedure varies depending on where you live.

A judgment will also appear on your credit report and can negatively affect your credit score.
I think it is dangerous to have one or more outstanding judgments pending against you. While bankruptcy is not always the best option, I think it would be wise to at least discuss your bankruptcy options and the potential dangers inherent in judgment collection with a qualified bankruptcy lawyer.
by Jonathan Ginsberg

Call us today!  

Visit www.MarkCarterLaw.com

Bankruptcy and Divorce

All too often money problems lead to divorce.  So it’s normal that a bankruptcy (or two) will be part of the picture.

Should you file bankruptcy first, or wait until the divorce is filed or concluded?  A good question.  The answer depends entirely on where you live and what issues need to be resolved.

A married couple, even if they aren’t living together, can file  together.  After the divorce, they can no longer do that, so two cases might need to be filed. Thus, you can save a filing fee if you file before the divorce. But, and this is a big but, you can’t expect to maintain a Chapter 13 bankruptcy if you are divorced.  So, it’s best to talk to a competent bankruptcy attorney and be completely honest about the domestic situation before filing.  And, you might find that the attorney, upon learning that a split up is imminent, won’t represent both of you, because of the potential conflict of interest.

Additionally, if you are still living together, the income of both spouses, at least to some extent, will need to be included in the calculation of the means test to determine if a Chapter 7  is a viable alternative. So, if the combined income is too much, it might be better to wait until you have separated before filing.

Generally, there are three things that get sorted out in a divorce: property division; child custody; and spousal and child support.   The automatic stay in bankruptcy will stop any property division but won’t stop the determination of child custody or the payment of  support.  Thus, if you file for bankruptcy before the property is fully divided up, that process will go on hold for a while.  Since the determination of property rights includes the payment of debts, the bankruptcy will often help resolve some of those issues.

If your marriage is breaking up, it might be nice to clean up your debts too and get a true fresh start.

Bankruptcy Law Network

Call us today!  

Visit www.MarkCarterLaw.com

Wage Garnishment Must Stop After a Bankruptcy Case is Filed; You Might Even be Able to Get Money Back

Bankruptcy Stops Wage Garnishment

The minute a bankruptcy cases filed,an injunction called the automatic stay is issued, which prohibits creditors from trying to collect on debts that were included in the bankruptcy. The Ninth Circuit Court of Appeals has called the automatic stay “one of the most important protections in bankruptcy law.” The automatic stay is self-executing, effective upon the filing of the bankruptcy case and requires that all collection calls, lawsuits and garnishments must stop immediately. Creditors who continue with collection efforts face stiff fines and penalties from the bankruptcy court. Section 362(k) of the Bankruptcy Code provides:

An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.

Reference National Bankruptcy Forum

Visit us at http://www.markcarterlaw.com today for debt relief

Can I be Denied a Job Because of Bankruptcy?

The Answer May Hinge on Whether Your Employer is Public or Private

I Need to File Bankruptcy, But I’m Worried About My Job…Can I Get Fired?

If you have a job, need to file bankruptcy, and are worried about getting fired because of it, you probably shouldn’t be. The bankruptcy code prevents employers from firing you just because you have filed for bankruptcy. However, if you are a job seeker, need to file bankruptcy, and are worried about being denied a job, you might have cause for concern. Under the current state of the law, a private employer can deny you a job if you are currently in or have filed for bankruptcy, whereas a public employer cannot. Section 525(a) of the Bankruptcy Code provides:

a governmental unit may not . . . deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title [Title 11] or a bankrupt or a debtor under the Bankruptcy Act 

Notice that section 525(a) applies only to public employers. The behavior of private employers is governed by section 525(b) which prohibits discrimination based on bankruptcy, but does not contain the language of 525(a) which addresses denying employment to a debtor based on a bankruptcy filing. The bankruptcy code has this to say about discrimination by private employers:

No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt

Reference National Bankruptcy Forum

Visit us at http://www.markcarterlaw.com today!

5 Ways to Deal With Financial Stress

1. Exercise
It may strike some as a bit strange that exercise would be first on the list. However, it’s really a simple equation: exercise relieves stress. Things always look brighter after a good workout. According to the Mayo Clinic, an exercise routine helps to increase the production of your brain’s feel-good neurotransmitters, called endorphins. Any exercise that gets your heart rate going will do: yoga, squash, tennis, running, basketball etc. Regular exercise can increase self-confidence and lower the symptoms associated with mild depression and anxiety. Exercise also can improve your sleep, which is often disrupted by stress; ever stay up at night wondering how you’ll pay the bills?

2. Prayer/Mediation/Mindful Living
Regardless of religious affiliation, a back to basics spiritual approach can help cope with stress. Take the time to focus on your breath. Ask yourself: of all my problems, what problem am I confronting NOW. Although it can be difficult, try not to immerse yourself in too many scenarios about the future. Deal only with what is on your plate, one day at a time. As Mark Twain famously said: ”I am an old man and have known a great many troubles, but most of them never happened.”


3. Full Disclosure
A routine bankruptcy case is stressful enough, believe me, you don’t want to see a “problem” case. For the debtor, bankruptcy is all about their debt. However, it is important to keep in mind that the Court and trustee are more concerned with assets. This post is intended to aid in relieving stress, so I won’t go through the parade of horribles that will ensue if your schedules are filed sans assets. Just follow one rule: tell your bankruptcy attorney about everything you own, you’ll be glad you did.

4. Don’t Go Through it Alone
One very common source of stress for bankruptcy debtors is shame. Many feel that bankruptcy represents failure. This simply isn’t true. Bankruptcy is a legal, ethical and entirely legitimate process which allows for a fresh start. Taking advantage of bankruptcy under the right circumstances is nothing to be ashamed of. To the contrary, it’s a sophisticated move, utilized often by multinational corporations and celebrities. Discussing your concerns with a close friend or family member will allow for an outlet to all the pressure that is building inside of you. Let it out! Worrying about what other people think should be last on your menu of concerns during a financial crisis.

5. Develop a Plan of Attack for Life After Bankruptcy
This is a big one. Putting together a plan of attack for your life after bankruptcy will be important, not only to relieve stress, but to thrive in your new debt free life.  Identify the circumstances that led to bankruptcy, and if possible, take steps to remedy them. Rebuilding credit will be a key, start by taking a look at the articles in the Related Posts section below. Knowing that you have mapped out the beginnings of a comeback will allow you to sleep better at night.

Lastly, try to remember that, while the bankruptcy process is not easy or fun, it has helped millions of people in this country get out from under impossible debt. Talk to a good bankruptcy attorney, disclose all of your assets, breathe, exercise, plan and you’ll get by……with a little help from your friends. Good luck!

Reference Bankruptcy Forum

Visit us at http://www.markcarterlaw.com for help today!

How Long Does it Take to File Chapter 7?

Typically, a Chapter 7 bankruptcy case is relatively quick to complete. Your bankruptcy case could be completed and discharged within 3-6 months of filing bankruptcy.

However, there are some important dates that can affect your right to file a case and obtain the relief available. The following filing timeline illustrates the relevant dates in the typical Chapter 7 bankruptcy case. We can help you see what details may affect your case.

Visit us today!  www.markcarterlaw.com

Can You Keep Your Car If You File Bankruptcy?

Many people who file for bankruptcy and own a car are allowed to keep it during and after their case, especially if it is used for getting to and from work.

If you are behind on car payments, you may be able to use bankruptcy laws to keep your vehicle in your possession.

Both types of personal bankruptcy address cars, car loans and vehicles you own outright:

• The automatic stay in bankruptcy is designed to stop repossession. In most cases, this goes into effect right after you officially file for bankruptcy.
• Chapter 7 bankruptcy exemptions may protect your car from a forced sale.
• Filing for bankruptcy under a Chapter 13 may allow you to repay your car loan at a more affordable rate so that you don't lose your car to collectors.

Buying a house after filing bankruptcy

When can I buy a house after filing bankruptcy? As a bankruptcy attorney, many of my clients are concerned that once they file bankruptcy they wont be able to buy a house. Or at least they wont be able to do so for the ten years a Chapter 7 bankruptcy stays on their credit report.

Truth is that many lenders shy away from lending money to people who have recently sought the protection of bankruptcy. But that actually doesn’t last very long. My clients find that after a year to a year and a half, the credit industry is back knocking at their doors with credit card offers, home loan offers, etc.

Recently, a client called 3 months after the bankruptcy filing and before her case was even closed, wanting to know if there was any reason she shouldnt accept the credit card offer she had just received!

Mortgage lenders generally look at three things to determine legibility to get a home loan: FICO score, regular income level, and the percentage of the purchase price you are able to put down. After filing bankruptcy, your FICO score will take a dip. Often that is caused by late payments more than the actual bankruptcy filing. Generally, with no overdue payments anymore, the FICO score comes back pretty quickly  a year or so.

The regular income level is based on your job and how long youve had it. Its easier to get a loan if youve been working in one place for a while on a steady income. The loan committee used to also take a close look at the amount your payments on the house will be in relation to your total income.
Thus, it used to be that you couldn’t get a loan if more than 30% of your income was going to go to the house payment. (Relaxing that standard so loans were given out based on 50 or even 60% on ones income level was one of the contributing factors to the mortgage crisis we are currently facing.)
Finally, the amount you can put down towards the purchase of the house makes a big difference. The higher the percentage of down payment, the more protection for the bank. (Allowing minimal or no down payments and relying on appreciation were also factors that led to our current mortgage crisis.)
So, what does this mean? If you want to buy a house after filing bankruptcy, you can. If may be you will need to wait a year or two until your income and expenses stabilize and until you can sock a few dollars away for a down payment, but thats probably a sound economic policy anyway.

Visit http://www.markcarterlaw.com today! 

Courtesy Bankruptcy Law Network

Rebuilding your credit after Bankruptcy

Don't despair if you have wrecked credit after filing for bankruptcy––you can take measures to rebuild it. Here's how to get your finances together, whether you've filed bankruptcy or you just need help stabilizing your money.

1. Open a new checking and savings account. If you do not already have both a checking and a savings account, open one of each at a local bank or credit union. 
2. Get a secured credit card. Once you have a little money put away, you can put some of it toward a secured credit card. A secured card functions essentially like a debit card in that you pay the bank the money beforehand, but your payments should be reported to all three major credit bureaus and go toward pumping up your credit score.
3. Get a retail or gas credit card. When you're back on track with a secured card, you can try applying for a retail or gas credit card.
4. Pay off your balance every month. You might have heard that carrying a balance is great for your credit score, but that's not necessarily true. Especially if you have bad credit, the credit bureaus want to see that you're capable of paying off the balance as often as necessary. Only buy what you can afford at the end of the month.
   
   
5. Get copies of your credit report from all three major bureaus. You can get one report a year from each bureau for free. Figure out where you are now, and where you'd like to be in two years. This can help you evaluate how drastically you need to restructure your finances.
   
6. Pay your bills on time. If you tend to be late paying your bills and incur late fees, now's the time to stop. Draw up a calendar with all of your due dates (or enter it into your phone), and check it religiously. Make sure the money is ready ahead of time, and try to mail payments or do online transfers a day or two ahead of the deadline
   
7. Dispute incorrect information on your credit reports. Make sure you follow up with any reporting agency who lists incorrect information on your credit report or who continues to allow discharged debt to appear on the report. To dispute incorrect information on your credit report listed by the bureaus listed above, you can use the online dispute form on Equifax, the credit maintenance services page on Experian, and the dispute section under the personal services category on TransUnion.
   
   
8. Budget for essentials. Sit down and figure out how much money you absolutely must spend every month. Try to be as strict as possible when it comes to differentiating between needs and wants––for instance, you might want unlimited texting but you don't need it to live. Once you know how much money you need to live, you can start figuring out how to leverage the rest of it toward rebuilding your credit. 
9. Use your remaining money to rebuild your credit. Whatever you have left over after you pay your living expenses can be used to rebuild your credit and purchase items that aren't absolutely necessary (such as entertainment, gifts, etc.)

Debt Collectors Calling?

Bankruptcy's Automatic Stay

When a person files for bankruptcy, they usually receive immediate protection from creditors through a special court order known as the bankruptcy automatic stay.
This means creditors must stop collection efforts.

The Stay is Designed to STOP Debt Collectors

The automatic stay in bankruptcy was designed to:

• HALT foreclosure
• STOP repossession
• SILENCE creditors
• STOP many lawsuits & wage garnishments

Sound like the kind of help you need? Ask a bankruptcy lawyer if filing bankruptcy and could help you.

http://www.markcarterlaw.com

Buying a Car After Bankruptcy

While bankruptcy offers an opportunity for many consumers in debt to start their financial lives anew, it may result in temporary financial uncertainty. After filing for bankruptcy, some people wonder how cautious they need to be in their future purchasing decisions.

One of the primary sources of concern for post-bankruptcy consumers is how to go about purchasing a car. The bankruptcy process may have freed them of their debts, but life after a bankruptcy may follow a different script.

To buy a car after filing, you'll likely need to take care of your credit. But the good news is that, with time, many people are able to build their credit up to higher levels than before their filing.
To get answers on how bankruptcy may affect your debt and about life after bankruptcy, speak with a us for free!

http://www.markcarterlaw.com

What do I have to do first if I am considering bankruptcy?

In April 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act officially amended the U.S. Bankruptcy Code and is now recognized as the uniform federal law that governs all bankruptcy cases. Today, you must take each of the following steps to officially file a bankruptcy claim:

• Choose and file for a specific type of bankruptcy. There are two types of bankruptcy for individuals or personal bankruptcy — Chapter 7, where your assets are sold off to pay creditors, and Chapter 13, where you can develop an interest-free repayment plan. You must apply for one type or the other, and your eligibility for each is based on your reported income when you file.
• Arrange for official credit counseling. New laws require that you must work with a licensed counselor for the bankruptcy filing to be legitimate.
• Attend a meeting of your creditors. In almost all personal bankruptcy cases, this is the only official proceeding you must attend. Informally called a "341 meeting" (named after section 341 of the Bankruptcy Code), it's designed for you to meet directly with your creditors so you can answer specific questions about your overall debts and property. This meeting usually takes place 20 to 40 days after you file the claim.

Call us for more information!  Visit our site at http://www.markcarterlaw.com

What are Bankruptcy Exemptions?

Bankruptcy Exemptions

What are bankruptcy exemptions? Exemptions specify property a debtor can keep in a Chapter 7 case outside reach of creditors and bankruptcy trustee, or how much a debtor must pay creditors in Chapter 13.

In Washington, debtors may either use the state's exemptions or the federal bankruptcy exemptions in the Bankruptcy Code. However, debtors cannot pick favorites from each list and combine or mix exemptions. If debtors opt to use the state's exemptions, they can use applicable federal non-bankruptcy exemptions, though.

Washington's state exemptions encompass homesteads, personal property, insurance, pensions, public benefits, tools of trade and wages, as well as miscellaneous categories. There are residency rules for state exemptions. They mandate you reside in the state for a required term. You usually have to live continuously in the state for two years before filing bankruptcy. There are also limits on homestead exemptions for property acquired less than four four years prior to bankruptcy.

Disclaimer

This article provides a brief, general introduction to filing for bankruptcy. You should contact a our office for legal advice regarding your case.

Mark A. Carter Law Office
2414 Main St. P.O. Box 61505
Vancouver, WA 98666
E -mail: banko341@netscape.net
 Phone: 360.694.8955
Fax: 360.695.5032
Get Directions

http://www.markcarterlaw.com