Across the nation, consumer bankruptcy filings have increased 14% from the same period one year ago. Over 770,000 consumers have filed bankruptcy during the first six months of 2010 – a rate of one in 150 households, according to data from the National Bankruptcy Research Center. The American Bankruptcy Institutes estimates that more than 1.6 million bankruptcy cases will be filed during 2010, the largest total since Congress enacted bankruptcy reform legislation in 2005.

Nevada is currently the state with the highest consumer bankruptcy rate followed by Georgia, California, Utah, and Tennessee. The lowest bankruptcy rates are in Alaska, the District of Columbia, and South Carolina, which have filing rates less than 40% of the national average. The national statistics also reveal that bankruptcy filers are choosing Chapter 7 (liquidation) over Chapter 13 (repayment plan). Only 27% of May 2010 consumer bankruptcy cases were filed under Chapter 13 cases, despite the attempt by Congress to encourage more Chapter 13 filings rather than Chapter 7. However, this chapter preference varies from state to state. Louisiana debtors filed Chapter 13 a whopping 61% of the time, but debtors in Iowa, New Mexico, and South Dakota all chose Chapter 13 less than 10% of the time.

The total number of bankruptcy cases has risen each year since 2005 when more than two million cases were filed. Many of these bankruptcy cases are husband and wife filings, also called joint filings. Researchers estimate that nearly one-third of all bankruptcy cases are joint husband and wife filings.

If you are in financial distress, you are not alone! The federal bankruptcy laws are meant to relieve the honest but unfortunate debtor of the stress of overwhelming debt. The bankruptcy process works and can provide you and your family with real relief. Don’t live your life in a debt prison. Free yourself through the power of the federal bankruptcy laws.

The United States Trustee Program is a component of the Department of Justice. The Trustee Program appoints and supervises local private trustees who administer Chapter 7 and 13 bankruptcy estates. One of the private trustee’s chief duties in Chapter 7 cases is to liquidate the debtor’s nonexempt assets and pay creditors with the proceeds. Similarly, in a Chapter 13 case the trustee must ensure that the debtor devotes all disposable income to debt repayment.

The trustee is not your friend, the judge, or your legal counsel. The trustee has no judicial power to make final decisions or issue orders regarding your bankruptcy case. While the private trustee is very skilled at bankruptcy law, the trustee is forbidden from giving the debtor legal advice. 

On occasion a debtor will contact the trustee’s office with questions concerning the bankruptcy case. This is always a bad idea and often results in a negative outcome. Direct debtor contact is uncommon, so the trustee will identify and remember a debtor that personally contacts his or her office. The case may have been a “routine” bankruptcy case for the trustee, but after the debtor contact the case is squarely on the trustee’s radar. The trustee will assume there is a problem with the bankruptcy and scrutinize the case.

During a lawsuit direct communication with represented litigants is generally prohibited. Many trustees are also licensed attorneys, but may communicate directly with you while performing the duties of bankruptcy trustee. If you call the trustee, he or she will likely speak with you. And why not? You may inadvertently disclose something that is better left unsaid. What seems like an innocent and expedient communication may turn into an issue that you are unable to predict. 

The bankruptcy trustee is not your friend. If you have questions concerning your bankruptcy, discuss your issues with your attorney. The attorneys at Haines and Krieger  can answer questions about bankruptcy and are experienced in dealing with the bankruptcy trustee. Let the attorneys at Haines and Krieger represent you and do not complicate your case by communicating directly with the bankruptcy trustee.  Contact us today for a free consultation.

Your bankruptcy attorney has many powerful to help you keep property while eliminating debt. One tool is lien avoidance, which is available to both Chapter 7 and Chapter 13 debtors. The general rule in bankruptcy is that debts secured by a lien must be paid or the property must be surrendered to the creditor. However, under certain circumstances, a lien can be legally avoided without losing the property.

The Bankruptcy Code identifies two different types of liens that may be avoided during bankruptcy: (1) a judicial lien; and (2) a non-possessory, non-purchase money security interest in household goods or tools of the trade. Furthermore, to qualify for avoidance the debtor must be able to apply a bankruptcy exemption (a legal allowance to the debtor to protect property from creditors) to the property securing the debt.

Clear as mud, right?

Let’s make it a little clearer: first, judicial liens are judgments and garnishments caused by a court order or judicial process. If your property is subject to a debt imposed by a court order, it may be possible to avoid the lien during bankruptcy. Statutory liens, like tax liens, are not avoidable in Chapter 7, but may be avoidable in Chapter 13.

Second, a non-possessory, non-purchase money security interest is simply a lien that you gave a creditor against property that you owned prior to incurring the debt and did not acquire using money from the creditor. A typical example is a personal bank loan secured by your television and/or other household items.

Finally, to qualify for lien avoidance, the debtor must be able to apply a legal exemption to the property. For instance, if you own a television worth $500 used as collateral for a $1,000 personal loan, you may be able to apply a legal exemption to protect the television and avoid the lien against it. Once the lien is avoided, the status of the debt changes from secured to unsecured and is likely discharged at the end of the bankruptcy case.

Additionally, if the legal exemption does not protect all of the value of the property, the lien may be reduced to the extent the lien secures the property. Using the above example, if the television is worth $500, but the debtor is only able to exempt $250 of its value, the creditor’s lien would be reduced in value from $1,000 to $250 (the amount of non-exempt equity in the television).

To avoid a lien the debtor’s attorney files a motion with the bankruptcy court alleging that the creditor’s lien is impairing the debtor’s exemption. Typically these motions are uncontested and are granted without hearing.

It is important that you provide your bankruptcy attorney with documentation for all of your loans. The attorneys at Haines and Krieger can avoid certain liens during the bankruptcy that will safeguard your property after your bankruptcy discharge.  Contact us today to discuss your options with a free consultation.

The federal bankruptcy laws promise a fresh financial start for the honest but unfortunate debtor. Bankruptcy balances the interests of the debtor to obtain his fresh start and the interests of the creditor to see that the debtor pays whatever he can afford. In some circumstances the debtor can complicate his bankruptcy case before he files.

Mistake #1: Paying an Insider Creditor

The bankruptcy laws attempt to ensure that all creditors receive fair treatment during the bankruptcy process. One concern is that the debtor will pay loans to family or friends before filing bankruptcy, and therefore deprive other creditors from receiving payment. Family, friends, business partners, and other creditors who have close relationships with the debtor are called “insider creditors” and transfers to insider creditors can be avoided by the bankruptcy trustee if the transfer occurred within one year before the bankruptcy filing. For instance, if you gave your mother $1,000 from your income tax refund as payment for a debt, and then filed bankruptcy two months later, the bankruptcy trustee can sue your mother to recover the $1,000. To make matters worse, often the debtor could have protected the cash money during the bankruptcy and paid the debt without difficulty after the case was filed.

Mistake #2: Incurring Debt After Deciding to File

Some people decide to charge up credit cards or take payday loans just before filing bankruptcy. If you have decided to file bankruptcy, do not incur additional debt. Taking loans with no intention to repay the creditor could be fraud. It could also be a criminal act.

Mistake #3: Transferring Property

Some people fear that they will lose property when they file bankruptcy. Some will give away or sell property to avoid losing it. In most cases your bankruptcy attorney can protect your property and you will not lose anything. However, once you have transferred an item it is no longer eligible for legal protections. For instance, a car worth $2,000 is likely entirely protected from turnover during your bankruptcy. If you transfer title of this vehicle to your brother before the bankruptcy, the trustee can avoid the transfer, take the car, and sell it to pay your creditors.

Mistake #4: Cashing out Retirement

Most retirement accounts are entirely protected during bankruptcy. Unfortunately, some people are unaware of these broad protections and cash out their retirement savings out of fear that it will be taken during the bankruptcy. Sometimes the money is spent to pay off loans which can create preference issues. In other cases the debtor converts an exempt asset (retirement funds) to a non-exempt asset (e.g. a paid off car).

Mistake #5: Failing to Be Honest

This is the worst mistake of all because the bankruptcy laws do not protect a dishonest debtor. Failure to truthfully list all of your assets, debts, income and expenses is grounds for dismissal of your case, or you may have to answer allegations of bankruptcy fraud (a federal crime).

If you are experiencing financial difficulty and are considering bankruptcy, discuss your case with an experienced bankruptcy attorney. The bankruptcy attorneys at Haines and Krieger can advise you on the best actions to take before bankruptcy and how to avoid common mistakes. Contact us today for a free consultation and use the federal bankruptcy laws to protect your property in Las Vegas.

There are generally two types of “bad checks.” The first type is the kind that is “payable on demand” meaning that it is expected that the bank will honor the check when it is presented. This is the most common type of bad check. When you write a check that the recipient believes is “payable on demand,” and the check is returned for Non-Sufficient Funds (NSF), you may have committed a criminal act. Depending on the amount of the bad check written, a person can be prosecuted for a misdemeanor or a felony. Even if you later make payment on the check there may be criminal charges or substantial fees and/or fines.

A NSF “payable on demand” check is not dischargeable in bankruptcy and bankruptcy will not exonerate you of a criminal act. The bankruptcy automatic stay does not apply to stop criminal prosecutions. Likewise, any debt to the victim of the bad check is now considered criminal restitution, also not dischargeable in bankruptcy. Any restitution, costs, and fines are not discharged by the bankruptcy.

While criminal prosecution of a bad check case is not affected by your bankruptcy, private collection is stopped by your bankruptcy. Any civil legal action concerning a bad check must stop, and any civil garnishment or other collection action must cease.

The second type of bad check is the post-dated check. These checks include payday loans and other checks that are essentially promises to pay in the future. You and the receiver are aware that the check is not presently negotiable. The bank will not pay the check because you don’t presently have the money in your account.

With a few narrow exceptions, being unable to pay a post-dated check is not a criminal act. However, it may be a crime to write a post-dated check that you intend to include in your bankruptcy. Typically the recipient of the post-dated check would have to file an adversary case with the bankruptcy court and prove that you committed fraud in writing the check with no intention to ever pay it.

If you have outstanding bad checks and are considering bankruptcy, discuss your situation with an experienced bankruptcy attorney. The attorneys at Haines and Krieger can advise you on the best way to deal with a bad check during your bankruptcy.  Contact us today for a free consultation.

Examining your options is important for anyone experiencing debt problems. If you are considering bankruptcy or debt settlement to resolve your financial difficulties, investigate the consequences of each process before making your decision. Below is some information about debt settlement companies and bankruptcy that you may not know:

Debt Settlement: The debt settlement process will harm your credit for years. Creditors will report your delinquent account until it is paid. Your report may identify settled accounts as paid less than 100%, which also adversely affects your credit score. 

Bankruptcy: Any debt included in a bankruptcy appears on your credit report as discharged with a zero balance from the date you filed your bankruptcy case. Bankruptcy stops adverse reporting so your credit report can improve. 

Debt Settlement: The typical debt settlement account will resolve your debt with a lump sum payment of between 20% and 80% of the debt.

Bankruptcy: In most bankruptcy cases you pay nothing to unsecured creditors.

Debt Settlement: Any settled debt will have tax consequences and you may have to pay the IRS. 

Bankruptcy: There is no tax liability for a debt discharged in bankruptcy.

Debt Settlement: You may be sued while you or your representative is attempting to settle your debt.   

Bankruptcy: All lawsuits are prohibited during your bankruptcy case.

Debt Settlement:  Some debt settlement companies are disreputable and the process is even illegal in some states.

Bankruptcy: The bankruptcy process is authorized by the United States Constitution and its laws are written by Congress. Only licensed attorneys admitted to practice in the federal courts are able to represent bankruptcy debtors.

Debt Settlement: The debt settlement process can take more than a year. The general rule is: the longer you don’t pay, the better the settlement. Creditors are reluctant to accept less than full payment unless they believe that you may file bankruptcy.

Bankruptcy: The typical chapter 7 bankruptcy case takes less than six months.

If you are struggling with debt in Nevada, investigate your options and speak with one of the experienced Las Vegas bankruptcy attorneys at Haines and Krieger. The federal bankruptcy law is a powerful tool to eliminate your debt problem and put you on the road to financial recovery.  Contact Haines and Krieger for a free Las Vegas bankruptcy consultation.