Everyday Law

December 16, 2009

I filed bankruptcy and got a discharge– why are collectors still calling me?

Well there are probably many answers to this question, but let us go to the two big ones.

First answer — that debt was not discharged, or in other words, not “in” the bankruptcy.  Debt that was not included in your bankruptcy includes:

(1) Student loans

(2) Many tax debts

(3) Debt arising from fraud or similar

(4)  Debt arising AFTER YOU FILED the bankruptcy.

Second answer — if the debt being collected after discharge WAS included in the bankruptcy and was discharged – -just an ordinary credit card or personal loan, for example, then the debt collector is breaking the law.

WHAT do you do to stop a collector who is unafraid to break the law?

(1)  Send them a copy of your bankruptcy discharge notice — whatever paperwork you got saying you had a discharge, send to the creditor — certified mail — and explain this debt was covered.   Tell them on the phone as well – -giving your bankruptcy case number may be enough.

(2)  If (1) does not work, call a consumer attorney (find one at http://www.naca.net – -which is NOT the mortgage help website, it is for legitimate consumer attorneys of all types) or call a bankruptcy attorney, including your former one.

You submitted yourself to the bankruptcy system, with all its punishments and benefits, and the main benefit is your fresh start.  If collectors are calling and your polite notice “Hey, I filed bankruptcy and here is the proof” does not stop them from trying to get you to pay this discharged debt, you can enforce your rights in either bankruptcy or state or federal court — hire an attorney and tell those bullies to leave you alone!!

April 23, 2009

Will the REAL free credit report website please stand up?

Filed under: Bankruptcy,Debt,Fair Credit Reporting Act — Amy Kleinpeter @ 9:34 pm

http://www.annualcreditreport.com

Not that other one.  Don’t go there.  Don’t do it.

January 2, 2009

How filing bankruptcy can lower your mortgage — now!

Filed under: Bankruptcy,Housing — Amy Kleinpeter @ 3:27 pm
Tags:

I hope my subject is not too misleading.  Right now, the law is that when you file a Chapter 13 bankruptcy, you can knock your car loan down to the value of your car (provided it is over 910 days old).  You can also knock down the value of a loan on your boat, if you have a boat, or the loan on pretty much ANYTHING except your house.

HOWEVER — there is one way filing bankruptcy can reduce the amount you owe on your house and that is by stripping your 2nd mortgage.  The following must be true.

(1)  Your house is underwater.  In other words, you owe more than it is worth.

(2)  Your house is SO underwater, that the 2nd mortgage is essentially unsecured.  For example, your house is worth $300,000, your first mortgage is $345,000 and your second is $45,000.  That second mortgage has nothing behind it, no security!

In this case, if you file a Chapter 13 bankruptcy, your attorney may file a motion and have your second mortgage determined to be an unsecured loan.  Then your second is treated the same as any credit card debt, personal loans, etc.

This is something that should be more helpful the lower the real estate market sinks.  It is too bad — ideally NO one would be in this circumstance, but if you find yourself owing so much more than your house is worth that your home value is less than your first mortgage, filing bankruptcy could help you.

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