The truth of the matter is that there is nothing that a debt settlement company will be able to do for you that you probably could not do yourself. In order to settle your debt, you need cash. I frequently meet with clients who does not have any disposable cash that insist on settling their debts. Before you spent what little cash reserve you have, or liquidate your assets, sit down and plan out an exit strategy. Ask yourself, “how much debt do I have?” and “how much can I possibly save to get out of debt?”

NYT article by: By RON LIEBER
Published: June 4, 2010

If you run up big credit card bills buying a new home theater system and can’t pay it off after a few years, bankruptcy judges can get rid of the debt. They may even erase loans from a casino.

Read more.

By Jeff Curl

“Can I get rid of my Small Business Administration (SBA) loan?” I get asked this question a lot from small business owners exploring bankruptcy.  The short answer is “yes.”

But you must be aware of the terms of the loan.  The SBA typically does not give a loan without obtaining some type of personal guarantee in exchange.  At the very least, this means that the loan – and the liability for that loan – extends beyond the business to you personally.  If you own property at the time of the loan, it is common for the SBA to require as a term of lending the money, that you permit the SBA to take an interest in your property such as placing a lien on your home.

This goes to the heart of whether it is the business and/or the person behind the business that files bankruptcy.  Continue Reading »

By Jeff Curl

I have seen my fair share of clients that spent many hours researching bankruptcy before coming in for a consultation.  They come across the numerous articles and blogs about something called the “means test.”  Sometimes they even find online means test calculators where they attempt to plug in their own numbers, but they are not sure if they did it right. 

Let me stop you right there.  I was at a conference recently where I sat in a room with over 1,000 other bankruptcy attorneys.  Judges, trustees and experienced attorneys discussed (and disagreed about) the means test for several hours.  It’s far more complicated than it looks.  The laws constantly change as to what can be deducted as an expense, and what must count as income.  Moreover, local custom and practice varies greatly.  Doing your own online calculation may Continue Reading »

By Jeff Curl

Occasionally I get the call from a client that forgot to list a creditor in his or her bankruptcy.  They received the discharge, but want to know if they are now responsible for the omitted debt.  This raises a few issues.

Was the Debt Dischargeable?

It first depends upon the type of debt.  Debts in bankruptcy are either dischargeable (you can get rid of it) or nondischargeable (you’re stuck with it).  Typical dischargeable debts include medical bills and credit cards.  Typical nondischargeable debts include student loans, child support and recent taxes.  If the debt omitted was something you could not discharge in the first place like student loans, you are stuck with it no matter what.

Was it a Chapter 7 “No Asset” Case?

But what if it was dischargeable?  What if you forgot about the $8,000 credit card you have not used for a year or two?  Continue Reading »

Many student loan lenders prey on students who are probably too young to understand the consequences of borrowing from the future.

By: Jeena Cho

When I was in law school, they opened a Starbucks in the student union. Instantly, I was addicted. Every break between classes, I would wonder over and order a venti soy Mocha Frappuccino. It was just the “cool” thing to do. After about a month of this bad behavior, I noticed two things. 1. I didn’t have money for groceries and 2. I was craving more Frappuccino. Initially, I thought someone had stolen money out of my account because the bank balance was much lower than where it should have been. After a little investigation, I was horrified at the fact that I had wasted my precious grocery money at Starbucks! Even at 2 cups a day at $4.75, that’s $285 a month!

I spent the next month tracking every dime I spent. Not just money I spent on Starbucks but on food, eating out, entertainment, clothing, Continue Reading »

By: Jeena Cho

The Means Test was a new rule passed with the 2005 Bankruptcy Amendment requiring that all above median debtors complete and “pass” the test. It was supposed to prevent abuse of the bankruptcy system by making it more difficult for people to qualify and file Chapter 7 bankruptcy. The principal idea being if you make above the median income for your state, you should be required to repay some of your debt in a Chapter 13 bankruptcy.

For a single person without dependents (household of 1), the median income in California is $47,969. Everything is obviously much more expensive in the Bay Area and many people make much more than the median income. Now, you may be thinking to yourself, I make more than that so I have to file for Chapter 13 bankruptcy. Well, not always. If you make above the median income, it just means Continue Reading »

Finding the right bankruptcy attorney for you is not an easy process. In the last several months, I have taken phone calls from 2 debtors that hired out-of-area attorneys only to be abandoned in the middle of complex Chapter 13 bankruptcy cases. Both paid lots of money up front only to be left without an attorney at important moments in their cases. The following suggestions might help you select the right bankruptcy attorney for you.

Choose a member of the National Association of Consumer Bankruptcy Attorneys. NACBA is the only national organization dedicated to serving the needs of consumer bankruptcy attorneys and protecting the rights of consumer debtors in bankruptcy. Although being a member of NACBA does not automatically make someone a good bankruptcy attorney, I know how committed the organization is to making its members better attorneys and I have met a number a great fellow bankruptcy Continue Reading »

Should I reaffirm?