Bankruptcy Basics: The Discharge Order

The main reasons that people file bankruptcy are to stop creditor harassment and get rid of their debts.  For individual debtors, the normal conclusion of a successful bankruptcy results in the entry of a discharge order.  But what exactly is a discharge order? A bankruptcy discharge is a federal court order that prohibits the collection…

Debt Consolidation vs. Bankruptcy

Dave Ramsey is right when he says that debt consolidation is “nothing for than a con” that addresses the symptoms and not the disease.  However, he misses that mark when he says that bankruptcy is an evil to be avoided. When Congress amended the Bankruptcy Code in 2005, it added a provision requiring debtors to…

Getting Rid of Tax Debts Through Bankruptcy

“You can’t get rid of taxes in bankruptcy.” True or false? A lot of people, even many bankruptcy attorneys, believe that taxes cannot be discharged in bankruptcy.  There are many tax debts that do survive bankruptcy such as “trust fund” taxes (i.e. taxes withheld from an employee’s paycheck).  However, some income taxes can be discharged…

Rebuilding Your Credit After Bankruptcy

I find that people with large amounts of debt are often too obsessed with their credit score. Your credit score will not buy your groceries and I doubt that companies such as General Motors, Texaco or United Airlines gave much thought to their respective credit ratings when they filed for bankruptcy. Nonetheless, your credit history…

Stopping Creditor Harassment

Under the Federal Fair Debt Collection Practices Act (“FDCPA”), creditors cannot “harass, oppress, or abuse any person in connection with the collection of a debt”.  Common examples of illegal harassment are: The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person. The…

10 Ways To Better Use Your Money Than Credit Card Payments

Although the title of this blog article is really tongue-in-cheek, have you every really considered how your life could change if you didn’t have the struggle of making your minimum credit card payments? As a bankruptcy paralegal, I’d have to say that at least 9 out of every 10 people I meet with have budgets…

Understanding Bankruptcy Basics

What Kinds of Bankruptcy Are There? There are two main types of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 11 is mainly for large companies like Chrysler and General Motors and for individuals who have too much debt to qualify for Chapter 13.  Chapter 12 applies to family farmers. Chapter 7 is what comes…

Envelopes: The Low-Tech tool that Helped Our Grandparents Get Through Tough Economic Times

I think my grandparents had some good ideas when they went through tough financial times and one of them was the envelope budget system.  There’s something about handling actual cash that makes you, well, it makes you want to keep holding on to it.  When times were tough, grandpa would cash his paycheck in smaller…

Putting Your Tax Refund To Good Use

December is traditionally a slow month for bankruptcy attorneys.  I have always assumed that this is because people want to “have a good Christmas” or not face their bill problems.  January on the other hand tends to be very busy, which is not surprising because getting out of debt often pops up on lists of…

Bankruptcy, Budgeting and Dieting – More Alike Than You Thought

At first glance, these 3 words would not seem to have much in common.  However, a closer look shows more of a connection than you might think. “If I could just be at the weight I want, I would be careful and never gain weight again. I just want a fresh start.” The truth is, money and weight…