Myth #: My Name Is Going To Be In The Newspaper
Fact: Not true. Your name will not be in the newspaper. There is no public, publishing requirement for bankruptcy. At Moran Law Offices, we handle all bankruptcies with a very high level of confidentiality. No one has to know that you have chosen to seek relief from your debts through bankruptcy. Many of your friends, neighbors, and coworkers may also have filed bankruptcy without you even knowing.
Myth #: If I File For Bankruptcy I Will Lose My House And Car
Fact: Not true. Bankruptcy is not designed to punish or embarrass a person by having their house and car sold. You actually get to exempt a certain amount of your personal belongings. And you get to control how you use your built-in exemptions. You can keep things like your wedding ring, family jewelry, or your favorite items out of the bankruptcy process entirely. In your free consultation, well help you see exactly what you can exempt and how.
Chapter 7 Bankruptcy In The United States
Bankruptcy is a legal remedy available to individuals and corporations who are unable to pay their debts. Under the United States Bankruptcy Code, a debtor may file for debt relief under different Chapters: 7, 11, 12, and 13.
In 2014, the US Bankruptcy Courts reported that a total of 911,086 new cases of bankruptcy under different chapters were filed in the US courts. 596,867 of those filings were based on Chapter 7 of the Bankruptcy Code. Of all Chapter 7 filings, 579,340 were classified as non-business debts.
Chapter 7 allows a debtor to liquidate his assets, the proceeds of which will be used to pay certain debts but not everyone can qualify for Chapter 7 filing.
The law requires the debtor to meet the means test, a complex formula for determining whether the application for debt relief is presumptively abusive, in which case, filing a Chapter 7 is not allowed. However, if you are faced with mounting debts that you are unable to pay off as they fall due, you may still be qualified to file Chapter 7 bankruptcy.
In Vancouver, Washington, the Law Office of Erin Bradley McAleer has years of experience in bankruptcy cases. We help people overcome their most difficult challenges and start a new life. Attorney McAleer is one of the National Trial Lawyers top 40 attorneys in Washington under 40 and maintains an Avvo Superb Rating of 10.0.
We invite you to call our office at if you are in financial trouble.
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Where Bankruptcy Doesnt Help
Bankruptcy does not necessarily erase all financial responsibilities.
It does not discharge the following types of debts and obligations:
- Loans obtained fraudulently
- Debts from personal injury while driving intoxicated
It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didnt, or couldnt pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.
Bankruptcy Filings Continue To Fall Sharply
Personal and business bankruptcy filings fell 29.1 percent for the 12-month period ending Sept. 30, 2021. A steady decline in filings has continued since the coronavirus crisis began.
According to statistics released by the Administrative Office of the U.S. Courts, the September 2021 annual bankruptcy filings totaled 434,540, compared with 612,561 cases in the previous year.
Business filings fell 27.9 percent, from 22,391 to 16,140 in the year ending Sept. 30, 2021. Non-business bankruptcy filings fell 29.1 percent, to 418,400 compared with 590,170 in the previous year.
The 12-month percentage drop nearly matched the previous quarterly filings report, when new bankruptcies filed in the 12 months ending June 30, 2021, were 32.2 percent lower than in June 2020.
Unemployment temporarily spiked in March 2020, when the COVID-19 emergency intensified. However, several factors may have impacted individuals decisions about whether to file for bankruptcy since the crisis began. For instance, increased government benefits and moratoriums on evictions and certain foreclosures may have eased financial pressures in many households.
Business and Non-Business Filings,
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Why Some Democratic Senators Want To End Non
ALONG LEGAL chapter in Americas opioid epidemic, which continues to kill tens of thousands of people a year, at last came to an end on September 1st when a federal judge in New York approved the bankruptcy plan of Purdue Pharma, which developed and manufactured OxyContin, a highly addictive painkiller. The deal settled thousands of lawsuits against the firm filed by states, localities, tribes and individuals. Purdue will be reorganised as a public-benefit company called Knoa Pharma, and its future profits will go towards alleviating the damage done by opioid addiction. Members of the Sackler family, who own Purdue, will relinquish control of the firm and contribute $4.5bn to the settlement. But nine states and Washington, DC, opposed the final deal and some will appeal against it. Their objections stem from a legal arrangement shielding parties associated with bankrupt companies from liability. Many people want it changed.
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This article appeared in the United States section of the print edition under the headline “Released”
Closing Loopholes That Benefit The Wealthy And Cracking Down On Big Corporations
While the current bankruptcy system imposes all sorts of obstacles for working families, it includes loopholes that benefit wealthy individuals filing for bankruptcy and failed to hold big companies accountable when they break the law. My plan closes these loopholes and imposes more accountability so that our system is more fair.
Loopholes benefiting wealthy individuals. In certain states like Delaware, wealthy individuals can file for bankruptcy and get debt relief while shielding their assets by placing them in trusts for their own benefit. This is known as the âMillionaireâs Loophole.â As part of the 2005 bankruptcy legislation, Congress pretended to close the Millionaireâs Loophole, while rejecting legislation that actually would have shut it down. My plan stitches up the Millionaireâs Loophole once and for all by ensuring that assets in self-settled trusts and revocable trusts are not exempt from creditorsâ claims in bankruptcy. My plan also closes off the related âspendthrift clauseâ loophole that allows the beneficiaries of âdynasty trustsâ to avoid paying their creditors .
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Experts Expect A Surge In Bankruptcy Filings Renewing A Debate About The Legacy Of A 2005 Law Backed By Biden
Fifteen years ago, Senate Republicans thanked Joe Biden for helping them pass a new bankruptcy law over the objections of consumer advocates and liberal Democrats.
But this year, with millions of Americans out of work and buried under mounting home, medical and student loan debt, the former vice president changed his position on the 2005 bankruptcy law, saying he supports many of the protections he rejected then.
As president, Biden says, he will push for letting people who enter bankruptcy discharge their student debts and protect the equity they have built in cars and homes. He embraced a plan put forth by Sen. Elizabeth Warren that would also make more people eligible to file for bankruptcy and allow them to file without paying exorbitant legal fees.
Those commitments may carry greater significance as experts are predicting a wave of bankruptcy filings from individuals and business owners who are burning through their savings and federal stimulus benefits, leaving them unable to pay their bills and make loan payments.
During the countrys last recession, beginning in 2007, bankruptcy filings steadily increased as millions of Americans lost their jobs and savings. That pattern has not yet repeated itself during the pandemic, as personal bankruptcies from March to September were actually down 27 percent compared with last year. But bankruptcy attorneys expect that trend to reverse as federal aid runs out and lending moratoriums expire.
Myth #: Bankruptcy Will Destroy Your Credit Score
While your credit rating will be affected when you file, it will not be destroyed forever. Depending on your situation and level of debts, you may actually increase your credit score by filing for bankruptcy. Bankruptcy helps eliminate the negative consequences of your unpaid debts, whether you file under Chapter 7 or Chapter 13. All negative activity will terminate, including interest, late fees, collection fees, and attorney fees. Ten years after filing, the bankruptcy will also be removed from your credit report, revealing a clean slate.
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Considering Bankruptcy Due To Pensions
- In Prichard, Alabama, a financially troubled suburb of Mobile, the city turned to bankruptcy court in October 2009 when it “simply ran of money to pay its pension obligations.”
- Chicago Mayor Daley said that he believed bankruptcy was an option for the city’s pension plan while he was urging pension reform in the state during his time in office.
Ending The Prohibition On Discharging Student Loan Debt In Bankruptcy
We have a student loan debt crisis in America. And one reason is that our bankruptcy system makes it nearly impossible to get rid of that debt, even when you have nothing left.
Over the past forty years, Congress and the courts have made it progressively more difficult to gain relief from student loan debt in bankruptcy. Congress initially passed a law saying that publicly backed student loans could be discharged only with a showing of âundue hardshipâ by the borrower. The courts eventually interpreted that language to impose a very high standard for discharge — a standard that generally doesnât apply to other forms of consumer debt. Then, as part of the 2005 bankruptcy bill, Congress explicitly protected private student loans with the same undue hardship standard.
These requirements have harmed borrowers. Today, 45 millions Americans are being crushed by $1.5 trillion in student loan debt, including more than a hundred billion dollars in private student loan debt. And the 2005 bill closed off almost any path to relief.
As President, Iâll attack the student debt crisis head on. My student loan debt cancellation plan cancels up to $50,000 in debt for 95% of people who have it, relieving a massive burden on families and boosting our economy. But for people who may still have debt, my bankruptcy reform plan ends the absurd special treatment of student loans in bankruptcy and makes them dischargeable just like other consumer debts.
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Myth #: You Will Never Get Credit Again If You File For Bankruptcy
Not true. Although a bankruptcy can stay on your credit report for up 10 years from the date of filing, you can start rebuilding your credit as soon as your bankruptcy is closed and discharged. Many of our clients purchase new homes, vehicles, and even qualify for credit cards a few months after the bankruptcy is concluded. In fact, many creditors will start offering credit right after the discharge. With proper planning and counseling, you can get new credit much sooner than expected.
Myth #: A Debt Counseling Service Can Help Me Eliminate My Debts Without The Stigma Of Bankruptcy On My Record
Fact: This myth is a very dangerous one. Debt counselors cannot get rid of your debts, nor can they stop your creditors from harassing you. All debt counselors do is help you negotiate new terms on your existing debt with your creditors-your creditors do not have to agree to any restructuring, and they can still come after you for any unpaid balances. By contrast, the moment you file your bankruptcy case, many of your creditors are prohibited by law from taking any legal actions against you, and once your bankruptcy is complete, many of your debts are gone forever. Furthermore, credit counselors do not necessarily have your best interests in mind-they are often owned by the very creditors that are making your life miserable to begin with. Dont let their non-profit claims fool you-when you use a debt counselor, someone is making a lot of profit off you, and in most cases youll still be hopelessly in debt.
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Bankruptcy Option For Local Governments
With state and local governments around the country facing dire financial straits, bankruptcy is at times an option. Three cities in California filed for bankruptcy within two weeks during June and July 2012. Five municipal entities sought protection in 2010, compared with 10 in 2009. Some estimated that states faced a total debt of $2 trillion in 2012 and that up to 100 cities were facing municipal bankruptcy.
House Dem Files For Bankruptcy
Rep. Ruben Hinojosa, an eight-term Democrat from Texas, filed for personal bankruptcy in December after a major bank won a $2.6 million arbitration award against him over a loan he guaranteed for a family meat company, according to documents filed in federal bankruptcy court.
Companies affiliated with Hinojosa have thousands of dollars in state tax liens against them, these documents show. In the court filings, Hinojosa listed assets valued atmore than $1.4 million and debt in excess of $2.9 million, including the arbitration award.
Bankruptcy filings for sitting members of Congress are relatively rare, as most lawmakers are wealthier than U.S. citizens of average earnings, but Hinojosas personal financial problems offer a window into the complicated financial entanglements that can cause embarrassing problems for an elected official. Congressional experts couldnt name a recent public report of bankruptcy by a House member or senator.
The bankruptcy filing had not been previously reported until POLITICO posted a story late Thursday.
Hinojosas annual financial-disclosure forms, on file with the House clerk, demonstrate that Hinojosa would be able to clear a personal loan to a company called Hinojosa Development valued at $250,000 to $500,000. Hinojosa has declared this liability since he first was elected to Congress in 1996.
While that case was ongoing, Hinojosa filed for bankruptcy protection on Dec. 18.
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Fixing Our Bankruptcy System To Give People A Second Chance
Elizabeth spent most of her career studying why families go broke. Her new plan overhauls our bankruptcy system so it helps working families, not giant companies. Add your name to support Elizabeth’s plan to give Americans a better chance of getting back on their feet.
This plan was originally released during Senator Elizabeth Warrenâs presidential campaign.
I spent most of my career studying one simple question: why do American families go broke?
When I started my career as a young law professor, I thought — like a lot of people at the time — that most families went broke because they were irresponsible or wasteful. They lived beyond their means. And when their irresponsibility finally caught up with them, they took advantage of our bankruptcy system to get out from under their debts.
But when I started to teach bankruptcy, I found that no one — not even the supposed âexpertsâ — had actually dug into the data to figure out what drove families into bankruptcy.
So I found two incredible partners and set out to gather the data about why families go broke. That was back when you had to collect information by hand, and courts charged a lot to make copies for you. To save money, I flew around to courthouses all over the country with my own photocopier — nicknamed R2D2 — strapped into the airplane seat next to me, copying thousands of bankruptcy filings to begin understanding why American families turned to bankruptcy.
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Sackler Ruling Threatens Cash
— A judges decision to deny the billionaire owners of Purdue Pharma protection from lawsuits is the latest threat to one of the most cherished deal-making tools in corporate bankruptcies: trading legal immunity for cash.
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The ruling Thursday by U.S. District Judge Colleen McMahon, which overturned a multi-billion dollar settlement to end the bankruptcy of Purdue Pharma, has implications well beyond that case because her New York federal court district is one of three that oversee the vast majority of the nations biggest bankruptcies. McMahon ruled that members of the Sackler family who own Purdue cant use the drugmakers Chapter 11 filing to end all current and future lawsuits over their role in the opioid-addiction epidemic.
Purdue has vowed to appeal. But if the ruling stands, it would threaten to upend long-practiced maneuvers allowing companies to shield executives and owners — and their cash — as they slash debts in bankruptcy court. The ruling comes at the end of a year in which lawmakers and state attorneys general have grown increasingly uneasy with such tactics, which they see as rampant abuse of the nations bankruptcy laws.
This decision certainly is ground breaking, retired bankruptcy Judge Steven Rhodes said. I would call it courageous because it bucked a fairly deeply entrenched trend in chapter 11 plans of reorganization.
Proposed Reform
Venue Shopping
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Myth #: Lenders Will Ignore You If You File For Bankruptcy
False. After Congress passed the new bankruptcy laws in 2005, much of the stigma associated with bankruptcy vanished. Many lenders understand the problems with our economy and the affect of this crisis on consumers. So many will offer credit to those affected by bankruptcy. While interest rates may be higher, you can still get credit, despite a bankruptcy filing.
Myth #: People Who File For Bankruptcy Are Stealing And May Go To Jail
Totally False. Each year, over one million people choose to file for bankruptcy, whether through Chapter 7 or Chapter 13. These are good people, just like you, who are in difficult financial situations.
While there is always a bad seed in every group, the majority of bankruptcy filers are in desperate need of relief and turn to the advantages of bankruptcy to assist them through this difficult time. Whether you lost your job and cant pay your credit cards, or became ill or injured and incurred significant medical bills, you are not a bad person for choosing bankruptcy relief.
Congress created the federal bankruptcy laws to assist hard working people eliminate their debts and move on with their lives. If you are facing this type of hardship, our Firm can help.
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