A couple of events made the news in the last week or so that are relevant to Bankruptcy or financial matters. In this prior post, we discussed the mostly made-up story about the man who was supposedly arrested just because he was late on his student loans. Another story that did not get as much attention was about rapper Curtis Jackson, more commonly known as 50 Cent. It seems that 50 had financial difficulties and filed a Chapter 11 Bankruptcy petition in July 2015 (which does not mean you should). After apparently representing in the case he was short on cash, 50 posted the picture to the right, and several others showing a lot of cash, on his Instagram account. This came to the attention of the Judge, who hauled 50 into court for an explanation. The story apparently continues, as 50 posted more pictures of stacks of cash after the hearing. You might not have stacks of cash, or street cred to maintain, but you might wonder if anyone will be browsing your social media accounts to see what property you have or where you are going on vacation? Maybe… Continue Reading
Will I Be Arrested For Not Paying My Student Loans?
In th
e last few days, a lot of attention has been given to a story about a man in Texas arrested by U.S. Marshals because he did not make his student loan payments, or was in default. The story originated out of the Fox 26 station in Houston. The problem is, the story is not true. Yes, Paul Aker was in default and, yes, he was arrested by U.S. Marshalls. What the reporter chose to leave out of the story were a few other details that were freely available online on the Court docket. After Aker failed to respond to a lawsuit, a judgment was entered. After attempts were made to get him to show up to a post-judgment deposition, the Court entered two orders compelling him to appear or face possible arrest. This is common for the failure to comply with post-judgment discovery or respond to Court orders. When Aker still did not respond or appear, the Marshals went to his house to serve the warrant (which is one of their responsibilities). According to the Marshals, Aker then said he had a gun and the Marshals on site called for additional help. Aker apparently admits he mentioned getting his gun, using the excuse that he did not know who was at his door (although Marshals are generally in a uniform or jacket, and identify themselves). He apparently then found a gullible and dishonest reporter who was more than happy to submit the false story that he was arrested for not paying his student loans and the story then was picked up by others who also failed to consider the actual facts available to everyone online.
No, you do not get arrested for getting behind on your student loans. You will get arrested for ignoring Court orders, usually after at least a couple of very clear warnings. It does not matter if it is a student loan debt or any other debt. If the U.S. Marshals or any other law enforcement agencies knock on your door and you tell them about your gun, you can expect they will call for additional officers for the protection of themselves and the community. For a few more details of this story, see the post on the Georgia Bankruptcy Blog.
Do I Need A Lawyer For A Home Loan Modification?
Home loan modifications have been a really big deal the last few years. The reality, however, is that the number of actual successful modifications is far less than originally “promised” by politicians, lenders and others involved in the process. Tales of lost documents, months-long delays, and then denials abound. Given that, is it necessary or advisable to hire a lawyer to guide you through the process of trying to get a modification to your home loan? Of course, opinions will vary from lawyer to lawyer, but with some exceptions discussed below, it usually is not necessary. Many lawyers, particularly real estate or bankruptcy lawyers, have advertised their services (some heavily) for guiding you through the process. However, for the most part, you are just paying for the lawyer’s staff to do the leg work of gathering and submitting the documents for you. You will still have to get the same information, and submit it to the lawyer’s staff, who will then submit it to the lender’s account representative. This part of the process is usually of little or no value to you, and the law firm’s involvement will not give you a greater chance of getting approved. Meanwhile, you are out the fee for something that you could probably do yourself with legwork and patience, and you are getting second-hand information through the lawyer’s staff. Now, there are some exceptions…
What Does It Mean When A Bankruptcy Lawyer Is a “Debt Relief Agency?”
Maybe you have seen the words “debt relief agency” on a lawyer’s website or other marketing materials. The phrase “debt relief” has been used for many years as a substitute for the word “bankruptcy,” most likely because it sounds a little less ominous. Many years ago, a lawyer in the Atlanta area, and one of the first to use mass television advertising, stressed the phrase “debt relief, settlement protection” in his commercials. You can view the commercial in this video from 1992 (skip to the 5:15 and 7:20 marks). His commercials often did not even mention the word “Bankruptcy,” and even today many people believe Chapter 13 is not really bankruptcy. But what about this “debt relief agency” business? Is it just a convenient way for lawyers to avoid saying they are Bankruptcy lawyers? Not really, although there are definitely some marketing tactics in play. Continue Reading
Online Advice (AVVO, LawGuru…) Is Not A Substitute For Your Own Lawyer.
I have participated on forums such as AVVO and LawGuru in the past, and found they can be pretty useful most of the time. People are able 
to post general questions about legal issues (or potential legal issues) that might come up in daily life, and they usually get pretty good answers. Yes, you have to give your ex-boyfriend/girlfriend time to come and get their stuff from your house before throwing it out. No, you should not buy a car or house with your boyfriend or girlfriend. No, there is no magic way to get out of a loan you co-signed (never, ever co-sign a loan for anyone!!). The majority of responses from lawyers are helpful and straightforward, although not always the answer the poster wants to hear. Many lawyers, not surprisingly, seem incapable of answering the most simple questions without trying to lure the poster in the door for a consultation. For people who have questions about car accidents or falling somewhere (injured or not), a whirlpool is created with the number of personal injury lawyers telling them they absolutely have to see a lawyer immediately. Sometimes there is just no way around telling a poster that they need to see a lawyer, and this is especially true when people ask about Bankruptcy. There is simply no way to evaluate a case in the space of an online forum post. Which brings me to the topic of this post…
When Do Payments Begin In A Chapter 13 Case?
As discussed in more detail in this post about Chapter 13 Basics and this post about Chapter 13 Plans, and Chapter 13 payments, the basic 
goal of Chapter 13 is to pay back some or all of your debts over a period of time. Usually, the payment period lasts from three to five years. An important question is exactly when these payments begin, since people generally file for Bankruptcy at a time when they are experiencing some difficulties in paying some of their monthly bills. The answer is different in every case, and it is extremely important to review this with your lawyer. Keep in mind your Chapter 13 plan will be tailored specifically for you, with payments you can afford. Continue Reading
Can I Object To A Claim Filed In My Chapter 7 Case?
After the filing of a Chapter 7 case, creditors generally have the opportunity to file a claim for money 
they believe is owed to them. This is generally done through an official “Proof of Claim” form. In “no asset” cases, there is generally no claim form mailed out to creditors since there will be no funds to distribute. However, if the Trustee does locate assets to pay creditors, they will request a “Bar Date” for filing claims, and creditors will be notified of a deadline for filing claims. What if one of your creditors files a claim you believe is either not owed at all, or is for more than you believe is really owed to them? Can you object to the claim? In most cases, you cannot, but it really should make no difference to you. Continue Reading
Can I File For Bankruptcy After A Judgment Is Entered?
You have been sued for a debt, the case is over and a judgment has been entered against you. Is it too late to file for Bankruptcy to try to discharge most or all of the debt? No…it is rarely “too late” to file a Bankruptcy case. Often, it is the judgment that provides the only reason to file the case and it would not have been necessary had the person been successful at trial. It is worth the financial risk to go to trial and see how it turns out. In other situations, the person does not have the money to hire a lawyer to defend the lawsuit so even a “win” would put them in debt. Either way, a particular debt is typically just as dischargeable in a Chapter 7 or Chapter 13 Bankruptcy case, whether the case is filed before or after the judgment is entered. However, there are a few exceptions and some important details to consider in many cases. Continue Reading
Can I Take Control Of An Irresponsible Relative’s Finances?
Do you have a friend or relative who just throws money away by spending every penny or running up credit cards and debt on unnecessary things? All of know people who do that to some extent. What if a relative is personal friends with a Nigerian Prince and sends him money on occasion? What if that relative met a great man or woman online, they build a relationship, and that person just needs a little financial help in traveling to America to meet the family? I recently saw a commercial for a Dr. Phil show that featured a woman who sent hundreds of thousands of dollars to a Nigerian “husband” she thought she had married (and I found the link here). Other than writing Dr. Phil to see if you can get on his show, is there anything you can do to prevent a relative from throwing money away? Continue Reading
Can I Discharge My Gambling Debts In Bankruptcy?
Georgia is not a big (legal) gambling state, other than the state sponsored Georgia Lottery, and most gambling is done on a cash basis. However, occasionally clients do come in with some gambling debts to include in their Bankruptcy case. In one case, a person made enough trips to casinos in Las Vegas that he was able to get a line of credit at one of them. More commonly, the gambling debts are not to casinos but instead are to credit card companies for cash advances lost at the tables. Can these debts be discharged in Chapter 7 or Chapter 13? Continue Reading