The bankruptcy alphabet continues with G is for Gumshoe. Why gumshoe? Because you will need to investigate all areas of your finances to gather the information and documents needed to file. Read more to learn about different methods used to find out what you need. 
     H is for Homeowner's Association Dues. Read this article to see what happens to your homeowner's association dues if you file for bankruptcy.
     I is for Income talks about the different income that must be disclosed and where in the bankruptcy you disclose it. 
     If you wonder whether to file bankruptcy with or without your spouse read J is for Joint Filing. This article discusses married couples filing jointly and filing separately.
     K is for 401K warns of the dangers of borrowing from 401K plans and answers the question of whether you can file bankputcy with a 401K plan. 
     L is for Lift the Stay explains what it means to lift the stay. When can you expect someone to bring a motion to lift the stay? Who will attempt to lift the stay and what can you do about it?
     Each article has a list of other bankruptcy attorneys contributions to the Bankruptcy Alphabet and contains a wealth of information.
Image credit: Leo Reynolds


Bankruptcy A to Z


Bankruptcy Alphabet Begins

_    This month I've started a series of articles called Bankruptcy A to Z. Each post will explore bankruptcy from the perspective of a different character of the alphabet for each post.

   A starts with Bankruptcy Assets, B is for Beware of Those Credit Card Offers, and C is for Chapter 7 in bankruptcy.

Bankruptcy D is for Disclose. E is for Equity and F is for Fresh Start.

The series continues on through the alphabet and my goal is to complete it by the last day of November. I'm a little behind so we'll see what happens.

Some of the articles will be short and some will be longer. There will be links to other articles on the same letter by other attorneys. I hope you find some useful information. 
If you are considering bankruptcy, you are advised to move any accounts you may have with Wells Fargo to another institution.

It doesn’t matter if you owe them money or not! It doesn’t matter that you have never bounced a check and never borrowed any money from them.  If you file bankruptcy the corporate policy is to freeze your accounts.

For at least a month you will not have access to your money, your ATM card will not work and any checks that are outstanding will be returned. Eventually the accounts can be unfrozen but meanwhile you won’t be able to pay the mortgage or buy food.

Don’t forget – move your money from Wells Fargo (and Wachovia) to another bank or credit union where you don’t have any loans, lines of credit or credit cards.

When asked what assets they have, most people think of real estate and money.  Those are assets but not the only ones.  All personal property is an asset.  It doesn’t matter what the value is.  Some assets have zero or little dollar value, like that t-shirt or your old shoes.  

Many clients have told me, “I have no assets!”  Yet I’ve never seen one walking around in the buff.  At the very least you have the clothing on your back.  You probably also have a bed and dishes.  You may have a bicycle, a motorcycle or an automobile.  These are all assets.  Your kitchen appliances, musical instruments, the pictures on the wall, the security deposit your landlord has, a cemetery plot, that stuff in the storage locker or your parent’s garage, an upcoming tax refund—all assets.

Full disclosure is required if you file for relief under the bankruptcy code.  In exchange for discharging most if not all of your debts you must fully disclose ALL your financials including your assets.  So think on it.  What do you have that you didn’t think was an asset?

The New York Times published an article titled The New Poor - Peddling Relief, Firms Put Debtors in Deeper Hole by Peter S. Goodman.  Please click on the title to read this article if you are considering calling a debt settlement agency or credit services company.  You must do research. 

We have had a number of responsible clients use these services to make payment arrangements thinking they were being honorable and would eliminate their debts through a repayment plan.  One couple spent $5,000 only to have the company go out of business without paying the creditors a dime.  Others made payments and even had some interest charges reduced but ended up filing for bankruptcy relief when an unhappy credit card company sued them. 

Many hard working families have hoped to pay their debts through debt settlement agencies but it just didn’t work for them.  Often there is too much debt and it is simply overwhelming - they seek bankruptcy relief after spending money that could have been used for food or medicine.  Be very wary of any agency that tells you to cut your food budget or seek cheaper or less medical care.  

California has only one approved and registered credit services organization that we know of.  It is called the Consumer Credit Counseling Service of San Francisco.  Be sure the name matches exactly as there are many close variations out there with no affliation.  Explore all your options carefully and be realistic about your ability to pay.  Even if a credit card or other company is willing to settle your debt at a reduced amount will you be able to pay it?

Credit services and debt consolidation is a growth industry with rising allegations of unfair practices. According to the National Association of Attorneys General, since 2004 at least 21 states have brought a minimum of 128 enforcement actions against debt relief companies.  According to the Federal Trade Commission, between 2007 and 2009, states’ consumer complaints more than doubled.  “Consumers rarely emerge from debt settlement programs with their credit card balances eliminated, these critics say, and many wind up worse off, with severely damaged credit, ceaseless threats from collection agents and lawsuits from creditors.”  (Goodman, The New Poor - Peddling Relief, Firms Put Debtors in Deeper Hole, N.Y. Times (Jun. 19, 2010) p. A1).