Law Office of James Keenan
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Credit report accuracy may not be that accurate. Consumers often rely on credit reports and scores to establish credit. Mortgages, car loans and credit card accounts are some of the more common examples or creditors who look to consumers' credit scores to extend credit. The better the credit score of potential creditors, the more likely loans will ...
Debt is on the rise. This recent Bloomberg article reflects the mounting consumer debt in America. Sacramento consumer debt is no different. The Bloomberg article portrays trends in consumer debt. It analyzes debts aside from mortgages, and the trend is clear. Consumer debt is up. It is up in Sacramento the same as it is in the rest of the country....
Abbey Lee, the reality TV star of "Dance Moms," filed for bankruptcy several years ago. And the Dance Moms bankruptcy did not go well. Why? She didn't disclose all her assets when she filed for bankruptcy. That's bad! Filing bankruptcy provides protection from creditors. It allows you to eliminate debt you cannot afford. And that's good. But you mu...
You are not alone filing bankruptcy. As this US Magazine story portrays, even celebrities file for bankruptcy. Even celebrities who earn millions file for bankruptcy. Why? The answer is simple. Debt beyond the ability to repay is a recipe for bankruptcy. This is true whether you earn millions or much less. If you cannot afford to repay your debts, bankruptcy may be the solution.
Knowing you are not alone filing bankruptcy is often a comfort to those considering bankruptcy. Thoreau was right when he spoke of people leading lives of quiet desperation. This is especially so when dealing with debt. Feeling you are alone in your debt dilemma needn’t be. Millions of others live under the canopy of debt, often believing they are alone in their plight. They are not.
Credit availability is, obviously, tied to debt. And credit availability is now back. Much of credit market dried up during the great recession in years past. Now credit is back. So is debt. And along with it the need for debt relief. There is no more comprehensive or complete recovery from debt than filing for bankruptcy. Again, that is why you are not alone filing bankruptcy.
The basic premise of not being able to afford your debt is a simple concept. It is also the key to your bankruptcy eligibility. If you cannot afford to repay your debt, bankruptcy can eliminate it. Your debt can be eliminated entirely if you cannot afford to repay any of it. This is normally known as a Chapter 7 bankruptcy. If you can afford to repay a portion of your debt, bankruptcy law requires you do so. This is known as a Chapter 13 bankruptcy. Either way, bankruptcy offers debt relief by discharging, or eliminating, your debt. No matter your debt problem, bankruptcy can help. Know, too, you are not alone filing bankruptcy.
Over the next few weeks and posts, I will expose some of the major bankruptcy myths out there. The first, and often the most common, is that bankruptcy is a financially irresponsible move. Or that it is financially irresponsible to incur more debt than you can afford to repay. This US News report reflects many of these myths.
The reality is that most debt discharged, or eliminated, through bankruptcy, is tied to medical treatment, bills and living expenses. Rarely are debts discharged through bankruptcy perceived as financially irresponsible. That’s because they’re not. It’s a myth.
The cost of living has increased. And it has increased at a much faster pace than in years past. Just ask a college graduate with student loans, the uninsured ill, or underemployed parents trying to provide. Debt has become a necessity of American life. And that is definitely no myth.
What, then, to do with the debt? The credit card industry has tried to portray and perpetuate the myth that filing bankruptcy on your debt is financially irresponsible. But why? They don’t want there debts discharged is why. Debt you can pay is one thing. Debt you can’t repay is another. Bankruptcy is about what to do with that debt you cannot afford to repay.
And if you cannot repay your debt now, you’ll be even less like to repay it later. Debt grows more commonly than it shrinks if you cannot afford to pay it. Often incurring new debt to repay old debt becomes a way of life. When you run out of Peters to pay Paul, though, something has to give.
What is the bankruptcy means test meaning? What even is the bankruptcy means test? Many considering bankruptcy and other debt relief options want to know. Stated simply, the bankruptcy means test is a financial evaluation of whether you qualify for certain bankruptcy protection. Passing the bankruptcy means test typically qualifies a filer for Chapter 7 bankruptcy. Chapter 7 bankruptcy is a form of bankruptcy filing resulting in the discharge, or elimination, of the filer’s debt. None of the debt normally needs to be repaid in a Chapter 7 bankruptcy.
Qualifying for Chapter 7 bankruptcy requires the filer to pass the bankruptcy means test. This, then, is the primary bankruptcy means test meaning. To “pass” the bankruptcy means test, the filer must demonstrate eligibility to file for Chapter 7 bankruptcy. What this means is that an individual or couple filing for Chapter 7 bankruptcy must prove eligibility for a Chapter 7 filing. To be eligible for filing Chapter 7 bankruptcy, filers must show, essentially, their living expenses exceed their income. Put another way, they owe more in living expenses than income earned. This recent news article clarifies many of the bankruptcy means tests basics.
When bankruptcy filers establish their living expenses exceed their income, Chapter 7 bankruptcy law allows their debts to be forgiven, or eliminated. The bankruptcy means test meaning here is that if an individual cannot afford basic living expenses, debt on top of that is incapable of being repaid. That is the purpose of Chapter 7 bankruptcy, to eliminate debt that cannot be repaid. The bankruptcy means test is the tool to test whether this is true for those filing for Chapter 7 bankruptcy.
Not qualifying for, or passing, the bankruptcy means test does not mean you cannot qualify for bankruptcy protection. But the bankruptcy means test meaning does dictate whether you qualify for Chapter 7 bankruptcy. Not qualifying for Chapter 7 bankruptcy is not necessarily bad. Sometimes other forms of bankruptcy filing, such as Chapter 13, bankruptcy, are a better bet for the filer. Every individual and family are different.
Though the concept is simple, the bankruptcy means test is one of the more complicated areas of bankruptcy law. Tread carefully here! There are numerous nooks, crannies and niches to the nuance of the means test. This is particularly so if your finances are not a natural fit for the means test. Perhaps, then, the best way to understand the bankruptcy means test meaning is to meet with a bankruptcy professional.
Donald Trump’s take on debt and bankruptcy is pragmatic. Limit debt accumulation but, if you can’t, consider bankruptcy to eliminate it. This New York Post article reflects the Republican’s debt philosophy.
Bankruptcy is a tool according to Trump. He’s right. Bankruptcy is a legal application to deal with debt you cannot afford to repay. It’s that simple. Whether it is a Fortune-500 business, a solo business practitioner or a single individual, the premise is the same. Debt load beyond the ability to afford is recipe for bankruptcy. This is not just Trump’s take on debt and bankruptcy. It is the basis of bankruptcy law itself.
Often individuals view bankruptcy as a last resort. Typically it is. But bankruptcy is not about what to do with debt you can repay. It is about debt your can’t pay. It is a frustrating financial situation. Stress often accompanies the debt. The source of strife, though, is often not the debt itself, but the inability to do anything about it. This is the pragmatist premise behind Trump’s take on debt and bankruptcy.
Time and knowledge often open bankruptcy options. Hope does spring eternal. And those in debt are no different. People try to repay their debts. Efforts to find ways to pay what is owed frequently finds frustration when the income isn’t there. When the same frustration repeats itself every month, soon a solution is sought. Bankruptcy is often that solution. individuals need to know that bankruptcy is an option for their debts and what it can do.
The stigma of bankruptcy for some is often an impediment to filing. But the reality is there really should be no stigma attached to using federal bankruptcy law to sort out debt problems. As Trump knows, bankruptcy is just a business decision dealing with your debt. It is a tool. Individuals should look at their financial picture with the same business perspective. Your finances are your personal business. Treating your debts as a business problem, as opposed to individual one, might allow you to better deal with your debt issues. And recognizing the worth of filing bankruptcy is one way to do it. Trump did.
Bankruptcy affords you protection from your creditors and the elimination (or reduction) of your debt. But along with the benefits, bankruptcy comes with restrictions and responsibilities. One limitation is the amount of property you can protect in a bankruptcy. As discussed throughout this website, you can exempt your property when you file bankruptcy. Though there are limitations on the amount and type of property you can protect. Bankruptcy law mandates you disclose all your assets in your bankruptcy filing. Applying exemption laws you can then protect your property. Many, if not most, consumers can protect all they own. Not disclosing all the property you have, though, is a bankruptcy bad idea.
Posting pictures of property you did not disclose in a bankruptcy filing on social media is a really bad bankruptcy bad idea. Rapper 50 Cent may have put himself in this spot. Recently he posted on social media pictures of him surrounded by piles of cash. 50 Cent is in an active bankruptcy case now. If he did not disclose this money in his filing, he may be in big trouble. This news story explains his potential legal predicament.
If 50 Cent had this money when he filed for bankruptcy and disclosed it, no problem. If he didn’t, problem.
If this potential bankruptcy bad idea befalls rapper 50 Cent, he wouldn’t be the first to so fall. Nor would he be the first celebrity to run afoul of the bankruptcy law. Former major league player Lenny Dykstra served time in prison for failing to disclose all his property in his bankruptcy filing. Here is the CNN story portraying his plight.
The message for all is to disclose in your bankruptcy all the property you have. You likely can protect what you have. But no matter, you must list it all. When you sign your bankruptcy paperwork, you do so under penalty of perjury. Lying about what you have–or don’t have–is a bankruptcy bad idea!
Rapper 50 Cent filed for bankruptcy protection this past sumer. In spite of his bankruptcy status, Curtis Jackson, his real name, posted pictures to social media posing in front of stacks of cash. As reflected in my recent post, if that cash was not disclosed, 50 Cent could be breaking bankruptcy laws. The judge has ordered him to appear in court to explain. Even so, 50 Cent posted more photos in and around stacks of cash.
Maybe the stacks of cash are props. Maybe it is, and maybe it is disclosed. But whatever it is, the bankruptcy judge wants to know. If it is a publicity stunt on the part of 50 Cent, the judge won’t be amused. What is funny is comedian Daniel Tosh’s take on flaunting of assets. Take a look at this video.
The incident has certainly garnered attention, as this Wall Street Journal article reflects. Being in bankruptcy obligates a debtor such as 50 Cent to comply with the mandates of bankruptcy law. In exchange, he is entitled to bankruptcy protection. This includes prevention of collection efforts and lawsuits from creditors. One such creditor suit in Mr. Jackson’s bankruptcy is from a sexual assault claim. If he wants to steer clear of that case in bankruptcy, he should steer clear of posting pictures of cash online.
Another potential problem for 50 Cent arising out of posting pictures of cash online, is possible claims from his creditors. If he did not disclose the cash or otherwise report it as income in his bankruptcy case, it is fraud. Creditors can contest the bankruptcy if he is proven to have committed bankruptcy fraud. This means that although 50 Cent is in an active bankruptcy, he might be stripped of its protection if he did not play by the rules. Creditors could collect from him. Lawsuits against him could resume. And his assets could be seized from those he owes. Posing in and amongst piles of cash and posting the pictures on social media may result in the loss of those piles of cash to 50 Cent.
Is Kanye West filing bankruptcy? He could. But we’ll see if he does. The point of this post is that someone worth a purported $100 million can file for bankruptcy. Normally such wealth doesn’t warrant a bankruptcy. With $50 million in debt, though, maybe it will.
The purpose of bankruptcy, whether you are Kanye West or you are you, is protection from creditors. Kanye West could need protection from his creditors and could be filing bankruptcy. According to this TMZ story, he may have the debt to make it worthwhile.
Anyone can file for bankruptcy who is eligible. Your financial worth cannot deny you access to bankruptcy protection. Granted you may have to repay all your creditors if you are worth $100 million, but you can do it on your terms.
Bankruptcy is a financial tool to del with your debt. Maybe you file bankruptcy because you can’t afford any of it. Maybe you file because you can only pay part of it. An maybe, why Kanye West may be filing bankruptcy, you do it because you need to rearrange your debt to manage it. There are many reasons to file for bankruptcy.
Creditors often cause conditions that give rise to bankruptcy filings. Lawsuits and judgments are common culprits. If, for example, you are sued and a judgment issued against you, you wages may be garnished. Your assets seized or frozen. Or any number of other options creditors can take to recover the money they are owed.
Sacramento Bankruptcy: Donald Trump Filed 4 Times (Don’t Be Deterred by a Supposed Bankruptcy Stigma)
Bankruptcy is a powerful tool to eliminate or reorganize your debt. When your debt is beyond your ability to repay, bankruptcy can be a way out.
Individual debt relief is no different than a business filing. The point is to pay what you can and eliminate what you can’t. Business filing are done for the sake of the enterprise. Personal bankruptcies should be viewed in the same light. Though the enterprise in a personal filing is self, the concept of debt relief is the same. As Donald Trump declared in response to his business interests filing bankruptcy 4 times, it is “smart”. See for yourself his bankruptcy story.
Bankruptcy law allows you protection from your creditors. Don’t be dissuaded by a supposed bankruptcy stigma. Filing bankruptcy in a business setting is seen as strategic and financially wise. Personal bankruptcy should be perceived the same. If you have the legal opportunity to eliminate your debt or dwell on your inability to repay it, choose the former rather than the latter!
Get the latest in bankruptcy news from The Wall Street Journal. Learn about bankruptcy changes and trends on the national front. For what to know about Sacramento bankruptcy, schedule a free consultation today!
Bankruptcy is a reflection of credit and the debt that goes along with it. As the economy slowly improves, credit is reemerging and, along with it, a confidence to use it. When that debt cannot be managed, bankruptcy may be a byproduct. As this news article reflects, bankruptcy filing flattened as credit dried up in the recent recession. Now, though, credit is coming back.
Taking on new credit is a sign of a strengthening economy. But when the debt can’t be repaid, bankruptcy may be an option.
With the start of the playoffs, ratings and revenue surge in the NFL and, along with it, players earn bonuses beyond their salaries. Those riches, though, are temporary. The average career in the NFL is less than 4 years. When football careers end, lifestyles for many often don’t. Debt results when spending exceeds income.
More debt than income to repay it is not a concept immune to any profession. Ex-NFL players, statistically speaking, file bankruptcy more frequently than the norm. The attached story illustrates this phenomenon.
While there are factors in every financial field and family that can precipitate bankruptcy, know that you are not alone if you need to file bankruptcy.
For those more interested in NFL scores than bankruptcy statistics, click here.
No. If a debt is forgiven or otherwise cancelled outside the bankruptcy context, that amount can be considered income on your taxes. Often people receive a 1099 (1099-C) for the amount of debt that is cancelled and must pay taxes on that amount.
Here is what a 1099 looks like for cancellation of debt income:
But if you file bankruptcy, the debt is discharged and, according to the IRS, cannot be considered income.
An “automatic stay” is legalese for the barrier between you and your creditors when you file for bankruptcy. It is the protective shield that prevents your creditors from collecting from you after you file for bankruptcy. Phone calls, letters, lawsuits, garnishments, levies and foreclosures are all barred once the automatic stay goes into effect upon the filing of a bankruptcy. Powerful legal tool!
Don’t worry! Bankruptcy covers all debt accumulated before a bankruptcy is filed. Though you must list all the creditors you know, debts or creditors you aren’t aware of when you file bankruptcy are still considered part of your bankruptcy and discharge as long as the debt arose before you filed bankruptcy. Often creditors sell their debt to collection companies and they, in turn, sell it to other collection companies, and so on, and so on . . . Soon you don’t know who’s out there trying to come after you. Just know that XYZ Collecton Co., who bought your debt from ABC Collection Co., can’t try to collect from you because you failed to list them as a creditor in your bankruptcy case since you never knew they even existed.