Are African-Americans not getting the “fresh start” they deserve when filing for bankruptcy? According to a new study entitled “Race, Attorney Influence, and Bankruptcy Chapter Choice,” by Jean Braucher of the University of Arizona and Dov Cohen and Robert Lawless, both of the University of Illinois, blacks file Chapter 13 at higher rates than all other races.
The abstract states that “although chapter 13 can offer some legal advantages for persons seeking to protect valuable assets such as a house or automobile, it generally offers less relief and costs more than the primary alternative available to consumers, chapter 7. The chief feature of a chapter 13 bankruptcy case is a plan under which the debtor must devote all of his or her disposable income to creditor repayment over a 3‐ to 5‐year period. Cha
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Judgment debtor is a term of art referring a party against whom a creditor obtained a judgment. I frequently get questions about lawsuits and judgments. Common questions includes:
- What happens if I ignore a lawsuit?
- Can I file for bankruptcy before or after judgment?
- Can I discharge a debt even after judgment has been entered?
- If there is a judgment, can they take my house?
Here is my general short answer.
The longer you wait, the more difficult it will be to fix your problems and the fewer your options will be.
How does the creditor get a Judgment?
First, let’s start with a basic scenario.
You owe Discover $15,000. You fall behind and at some point, Discover (or a debt collector) brings a lawsuit against you. A lawsuit is initiated by filing a summons and complaint with the county court. Y
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In most bankruptcy cases, at the 341 hearing, the bankruptcy trustee will ask the debtor, “How did you get into this situation?” Our Boston bankruptcy clients are instructed to answer honestly, albeit briefly. The answers vary, of course. In Massachusetts bankruptcies, anecdotal evidence shows that there are not as many medical bankruptcies as reported nationally. However, in a fascinating academic study it was shown that there is a direct correlation between cancer and subsequent personal bankruptcy.
The study, presented by Dr. Scott David Ramsey, of the Fred Hutchinson Cancer Center, in Seattle, was conducted in Washington State. It linked the Western District of Washington bankruptcy court records with the National Cancer Institute’s SEER (Surveillance Epidemiology and End Results) for Washington State. The study was published by the Journal of Clinical Oncology and included examining 231,799 cancer cases.
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When a debt collection company or buyer shows up in District Court, they are usually just going by a person’s name, last known address and Social Security number to obtain a judgment against that person.
Reacting to a flood of uncontested debt collection cases, the Maryland high court has just ruled that for all cases filed on or after January 20, 2012, collectors and creditors must produce actual proof that the debtor incurred the debt. It is a national problem that has generated concern among the District Court, the Maryland Commissioner of Financial Regulation and the Office of the Attorney General.
Baltimore’s WBAL Channel 11 news reported on the story stating the new ruling is significant for consumers because the plaintiff often has insufficient reliable documentation and rarely files a notice of intention to defend or appear for trial. Had
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There is one comment I hear on a regular basis from clients that has always baffled me. Its when a client says something like Oh, but I dont want to file bankruptcy on Chase because it has been so GOOD to me. Its usually followed by I get money back, I get points, gave me free checking, I know the teller, the branch manager, etc.
I don’t think I’m breaking any news story here but just for the record, Chase doesn’t care about you. Neither does AMEX (even if you have a Platinum card), or Discover, or Bank of America or… you get the idea. They DO care about taking your money. No doubt. However, they don’t care about you.
As eloquently put by Seth Godin on Caring:
“No organization cares about you. Organizations aren’t capable of this. Your bank, certainly, doesn’t care. Neither does your HMO or even your car dealer. It’s amazing to
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As a Massachusetts bankruptcy lawyer, clients, or potential clients, who are facing the prospect of foreclosure, often consult us. They want to know their rights and what options they have. Usually they want to keep their home. And they can often do so by keeping their mortgage current and discharging their credit card debt. If you can make the mortgage payments but not the credit card payments, you may be able to protect your home and qualify for a chapter 7 bankruptcy. Our Massachusetts bankruptcy and consumer blog is here to give some guidance.
Some want to walk away from their home; they are too far behind in making mortgage payments, the payment amount or interest rate is too high, or the house is just too much. Often the mortgage company forecloses and does not go after folks for the difference between the foreclosure sale price and the balance on the mortgage, if any. However, the difference between the foreclosure sale price and the remaining amount on the loan can be taxable as a “gift” by the federal Internal Revenue Service.
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