http://www.npr.org/blogs/money/2009/05/our_favorite_recession_haiku.html

Picture this:  A creditor giving money to a debtor.

Sure, that’s about as likely as a slot machine giving you your money back.

Not so fast, though.  There actually is a realistic scenario where you, as a debtor, could expect a creditor to pay money to you after your filing bankruptcy in Las Vegas.  The scenario occurs when a creditor tries to collect money from an individual after the individual has filed for bankruptcy.  Because as soon as a bankruptcy petition is filed with the court, the debtor is provided a legal "force field" protecting him or her from collection efforts by creditors.

Mind you, one of the keys is having a lawyer who takes all steps to make sure that your creditors have been notified that the automatic stay is in effect.  But once they’re aware of your bankruptcy filing, a creditor is not allowed to make any attempt to collect money from you.  They can’t use a collection agency, they can’t call you, they can’t send you anything, they can’t tell someone to tell you something.  The only way they can contact you is by contacting your lawyer.

Well, actually, they can do all of these things if they really want.  But if they do, then you can just let the court know and the creditor will likely be subject to punitive damages.  The goal is to discourage creditors from contacting you directly and instead make sure that everything is resolved via the Court and the bankruptcy process.  Because if a creditor tries to collect money from you after you’ve filed for bankruptcy, they’re not just harming you, they’re harming other creditors as well.  And they’re harming the integrity of the bankruptcy process.

Despite the existence of punitive damages, however, many creditors do still try to collect from debtors after they have filed their case.  They’re counting on debtors being uninformed and unaware and frightened. 

But if you know the truth, that the bankruptcy process and the automatic stay are there for your protection, then you have power.  And you can turn that power into money for yourself.  Just tell the creditor thank you very much, save any information that could serve as evidence (e.g., the letter received, a phone record, perhaps a recording) and show it to your lawyer.

If the creditor was acting in violation of the automatic stay, then the Court can make the creditor pay money to you in the form of punitive damages.

This holds for any individual bankruptcy Las Vegas, whether Chapter 7 or Chapter 13 or even Chapter 11.  And that’s why it’s important to have good bankruptcy attorneys in Las Vegas on your side.

If you need Las Vegas bankruptcy help, get in touch with us for a free consultation to make sure you’re fully aware of all of your rights in the bankruptcy process.

Let’s say you are being sued for something, such as not making a payment on your credit card, your car or some other payment that you owe but are having trouble paying.

Maybe you’re thinking of filing for Chapter 7 or Chapter 13 bankruptcy in Las Vegas in the not-too-distant future.  And if so, maybe you’re tempted to think, "If I file for bankruptcy, I can get rid of these debts, so I really don’t need to worry about this lawsuit."

1. Do not ignore lawsuits.  Make sure you at least file answers to them so that the plaintiff cannot easily get a judgment against you.  And of course, always talk to a lawyer if possible.
2. If you think bankruptcy may be in your future, definitely talk to a bankruptcy lawyer to make sure you plan ahead and protect yourself as well as possible.

Our clients often want to know if they can keep their bankruptcy filing a secret.  We tell them that the only people who will know about their bankruptcy filing are their creditors, and certain court officers in the Las Vegas bankruptcy court.  If you prefer to keep your bankruptcy filing confidential, chances are you’ll be able to.

Still, it might be a good idea to discuss your bankruptcy filing with your family.  One reason is to prevent your relatives from transferring assets to you which could be included as part of your bankruptcy estate, and sold to collect money for your creditors. 

For example, your parents might transfer their home to you if they anticipate applying for Medicaid in order to pay their nursing home costs.  Since your parents will likely continue to live in their home until they make the move to a nursing home, they may not have even told you about the transfer.  If you file for bankruptcy, however, the bankruptcy trustee apppinted in your case might be able to sell the home in order to pay your creditors.  

Another reason to let your family know you’ve filed for bankruptcy is to manage their expectations about paying them back any loans you may owe them.  It’s natural for you to want to repay your family members before you file for bankruptcy, but it’s a bad idea. 

The reason we advise against repaying your family members before filing for bankruptcy is because bankruptcy laws aim to give equal treatment to all creditors with the same type of debt.  For example, you’ll be expected to repay your credit card company the same percentage on the unsecured debt you owe it, as you’ll repay your brother on the unsecured loan he gave you.  In fact, if you give favorable treatment to one of your creditors even before filing for bankruptcy, the bankruptcy trustee can sue that favored creditor to get the money back, so that it can be evenly distributed among all your creditors. This is called "avoiding a preference." 

For most creditors, the bankruptcy trustee will examine whether you gave them any preferential treatment within the 90 days leading up to your bankruptcy filing.  With family members, however, the trustee will look at your transfers to them in the year before you filed for bankruptcy.  Therefore, a better idea than paying back your family members before your bankruptcy filing is to wait until after your bankruptcy to repay these debts.  Of course, you won’t be legally obligated to pay back any debts after your bankruptcy case is over, but the Bankruptcy Code allows you to make voluntary repayments. 

You may have heard recently about some legislation passed that will make it harder for credit card companies to employ a lot of their favorite tricks for taking advantage of their customers.  For example, they will no longer be allowed to raise your interest rate at will.  Or tack on various late fees that you didn’t even know existed.

However, the new protections could cause you to be affected in other ways, as a recent Washington Post column by personal finance columnist Michelle Singletary points out.

Specifically, don’t be surprised if you see credit card companies start re-instating annual fees.

The reason?  Well, first it helps to understand the 4 basic categories of credit card users, as identified by Demos, a non-partisan policy research and advocacy organization.  (This is also a good opportunity take a moment to consider which category you fall into.)

-Non-users, people who have credit cards but don’t use them.

-Convenience users, people who pay off their balance in full each month and don’t incur interest or fees.

-Revolvers, people who incur interest charges by paying the minimum each month, or an amount less than the full balance, so that they carry a balance.

-Late payers, people who don’t pay on the deadline or skip payments and, as a result, incur both late fees and interest charges.

If you’re a Non-User or a Convenience User, then perhaps you haven’t been paying annual fees.  But according to Demos’ research, the reason is that Non-Users and Convenience Users have essentially been subsidized by all the late fees and interest charges that credit companies have been making from the Revolvers and Late Payers.  Additionally, Demos’ research shows that the Revolvers and Late Payers tend to be lower or middle income, while Convenience Users and Non-Users tend to be middle and upper income. 

In other words, the credit card companies have been gouging people with less money to subsidize the services they provide to people with more money.  Once they’re no longer able to do this under the new regulations, don’t be surprised to see the annual fee come back on your credit card if you’re a Convenience User or a Non-User.

Hopefully you now have a little insight into how the credit card industry works and have also had a chance to contemplate the kind of credit card user you are.

If credit card debt has become a problem and you’re seeking a debt consolidation lawyer or a bankruptcy attorney in Las Vegas because you’re considering filing bankruptcy in Las Vegas, get in touch with us for a free consultation.
 

Nevada exemptions in bankruptcy

Nevada exempts a significant amount of property from Chapter 7 proceedings. You will be able to keep:

• Homestead equity up to $550,000
• 75% of gross earnings
• One vehicle with equity up to $15,000
• Books not to exceed $ 5,000 in value
• Family pictures and keepsakes
• Household goods not to exceed $12,000 in value
• Equipment and tools used in your farm not to exceed $4,500
• Mining cabin, equipment and tools not to exceed $4,500
• Office equipment, manuals, supplies and tools of your trade not to exceed $10,000
• $1,000 in any non-exempt property, money, stocks, bonds or other funds on deposit with a financial institution

A number of recent graduates have asked us about discharging their student loans in bankruptcy. 

Student loans are generally non-dischargeable in a bankruptcy.  This means that you cannot totally eliminate them, unless you can show the bankruptcy judge that your loan payments impose an "undue hardship" on you.   It is almost impossible to show this type of "undue hardship" unless, for example, you are physically unable to work, or your chances of obtaining any type of gainful employment in the future are non-existent.

Nonetheless, there are still benefits to filing bankruptcy if you are burdened with student loans:  

• You’ll be able to consolidate your student loan payments in a Chapter 13 bankruptcy.  You’ll submit a repayment plan of all your debts to the bankruptcy court, in which you’ll propose how much to repay your creditors, and over what period of time.  If the judge accepts your plan, your creditors will be also be forced to accept it.  It’s very possible that you’ll be able to lower your repayments, and repay the loan over a longer period of time. 
   
• In a Chapter 13 bankruptcy, you likely won’t need to pay interest, late fees or other penalties.  All your repayments will go towards the principal amount you owe on your loan.   If you and your lender disagree over what portion of the student loan constitutes principal and what constitutes other charges, you’ll be able to make an argument to the bankruptcy judge, who will then render a decision.

• Once you file for bankruptcy, your creditors, including your student loan officers, are prohibited from beginning or continuing collection actions against you.  This includes harassing you with phone calls and letters.

• If you file a Chapter 7, you won’t be able to adjust the terms of your student loans, but you will be able to free up your money to repay your student loans because you’ll be able to discharge other debts. 

For more information on this topic, or any other bankruptcy topic, call our offices at 702-880-5554.  If you are calling from within Nevada, you can also reach us at 1-800-LAWYERS.  Our lawyers are bankruptcy experts, and can offer you the bankruptcy services you need to get your financial life back on track.

Let’s hope Bankruptcy Judge Redfield T. Baum is a hockey fan.  He’s presiding over the Chapter 11 bankruptcy case filed on behalf of the Phoenix Coyotes by their owner, Jerry Moyes.   

The case has been hotly – and extensively – contested since it was filed less than three weeks ago.  In fact, the bankruptcy judge had to chastise the parties for filing legal pleadings consisting of 600-700 pages to make their point.  In other words, "Lawyers – GET THE JUMP!"

Moyes received the first roughing, after the NHL insisted that he had no right to file a bankruptcy case for the Coyotes.  Apparently, after the team lost an estimated $300 million since 2001, Moyes signed away his ownership rights last November in exchange for money from the NHL to pay the Coyotes’ bills. 

Also on the forward line against the sale is the city of Glendale, which spent $183 million to build the arena in which the Coyotes play.  Not surprisingly, Glendale filed a massive brief in the bankruptcy court to block the team from going anywhere, saying that the Coyotes signed a 30-year lease to play in the arena.

In an effort to try and freeze the puck, Judge Baum instructed the NHL and Moyes to mediate their differences, although commentators have agreed that H-E-double hockey sticks will likely freeze over before the two parties reach a resolution.  We’re waiting for the line brawl that will likely take place at the bankruptcy court hearing set for June 22.  Watch your chicklets! 

In a recent blog post, we advised against hiring a debt settlement company, based on the unscrupulous practices employed by many of them.

The New York attorney general, Andrew Cuomo, apparently agrees with us. This week, Mr. Cuomo charged two debt settlement companies with fraud, and sent subpoenas to another 15 of these companies in an effort to uncover their shady tactics. 

The two companies sued are denying any wrongdoing.  One of them enrolled 18,000 customers in its debt settlement program, but settled the debts of less than 2,000 customers.  Incidentally, the company earned $17 million in fees.  The other company enrolled close to 2,000 customers in its debt settlement program, but only settled the debts of 64 customers – 27 of which ended up paying more than they originally owed because they had to pay the debt settlement company’s fees. The lawsuit complaints are filled with descriptions of how customers were misled into paying fees for debt settlement services that were never rendered.  Not only did these customers’ phones continue to ring off the hook with angry creditors, their credit scores plummeted as well.

The lawsuits also includes a list of "helpful" suggestions for raising money that the debt settlement companies offered their customers.  You be the judge of whether these suggestions really are, in fact, helpful:

• Refinance your home
• Get a second mortgage
• Baby-sit
• Sell your plasma (blood, not TV)
• As for a raise
• Get off the station before your usual stop and walk
• Cut down your drinking
• Drink tap water
• Buy frozen

What’s your verdict?  Would you be willing to pay a 15% fee of all your debt to receive advice like this? 

This post is just a friendly reminder to beware of credit counseling services as well as debt settlement companies.

Why bring this up today?  Because last week the credit counseling industry launched another contrived attempt to persuade people that it’s a good idea to use a their services.

A press release was put out by an organization called the National Bankruptcy Research Center announcing the results of a Credit Counseling Value Study.  They say the study indicates that, "Consumers who received pre-bankruptcy counseling exhibited significantly improved credit profiles in as little as two years in comparison to consumers who did not receive pre-bankruptcy counseling."

The problem is that the study was created by the credit counseling industry.  The other parties to the press release are the Money Management International Financial Education Foundation along with Experian, a credit scoring company (i.e., one of the companies responsible for your credit history).

With a couple click-thrus, it’s clear that the National Bankruptcy Research Center and the Money Management International Financial Education Foundation are just front organizations for the credit counseling industry. 

Yet, on Credit.com, a site created by the credit counseling industry to convey a "helpful" image, a blog post makes a point of echoing the research findings as if they’re set in stone.  The findings, however, are not set in stone.  They’re simply part of a strategy to make their services look more beneficial than they really are.

The reality is that most credit counseling services charge high fees and cannot reduce your debt load.  Their model is only applicable to people with credit card debt, and they get fees from the banks based on the amount of money they get you to pay to the banks.  Frequently people end up with higher debt loads after working with a credit counseling service.  And credit counseling services have no legal authority to help you file for bankruptcy.

If you need bankruptcy information in Las Vegas, the best approach is always to find good bankruptcy attorneys in Las Vegas.  A bankruptcy lawyer can advise you as to all of your options, whether you need credit counseling, a debt consolidation lawyer, avoiding foreclosure or help figuring out whether to file for bankruptcy.

Lawyers have to be licensed by the state bar association, so they can be held accountable for unethical actions or wrongdoing.  And a good bankruptcy lawyer always offers a free initial consultation.

If you’re facing difficult decisions and not sure where to turn, find a bankruptcy lawyer with a good reputation and with whom you feel comfortable.  That’s always the best option for figuring out all of your options.