Monthly Archives: August 2013

What Are The Differences Between Foreclosures In Kansas and Foreclosures In Missouri?

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Many people contemplating a bankruptcy filing are being faced with a situation where payments on their mortgages have not been made for months.  Once a person falls behind in their loan payments, a creditor (a bank or mortgage company) will eventually refer the loan for commencement of the foreclosure process.  This process is different each state:  Kansas has a judicial foreclosure process, and Missouri uses a system based on “deeds of trust”.

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In Kansas, the foreclosure process begins by the filing of a civil action in the district court in which the property is located.  The homeowner will be served with a summons and a copy of the petition.  There will be a time required for the filing of a response.  If no response is filed, a default judgment will be taken and the next step in the process moves forward.  This would be the setting of an actual foreclosure sale date on the “courthouse steps” some months down the road.  How fast this happens depends on many factors, but lately it seems to be taking months from the time the default judgment is entered.

Regardless, it is critical that you file your bankruptcy case before the foreclosure sale date. Failure to do so can have tragic consequences for your ability to retain the residence and try to get caught up on the arrearage over time.  As soon as you fall behind on your mortgage payment, give us a call.  Delaying only makes things worse.

In Missouri, foreclosures are handled differently.  They are not done through the court system as in Kansas.  Rather, there is a trustee assigned in each county (e.g., Jackson, Cass, Platte, Buchanan, Clay, etc.) who handles the deeds of trust for the houses in question, and this trustee is responsible for taking care of the foreclosure process.  Again, the principle is the same:  you must get your case filed before the sale date.  This does not mean that you should wait a week before the sale date to deal with the issue.  The better option is to seek legal help as soon as things start to become difficult.

Read More:  Title Loans And Bankruptcy

Locations For Filing A Bankruptcy In Kansas City

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For most people living in the Kansas City metro area, bankruptcy cases in Kansas are filed in U.S. Bankruptcy Court at 500 State Avenue, Kansas City, KS.   For people living on the Missouri side, cases in most situations would be filed at the US Courthouse at 400 East 9th Street, Kansas City, MO.  There are some nuances to these general patterns, however.  A person can file either in the place where they have lived the most, or where most of their assets have been located, in the preceding 180 days.

In Kansas, a person can file in any one of the three venues:  Kansas City, Topeka, or Wichita.  A person living in Missouri or having the majority of assets in Missouri will need to file in either Kansas City, Springfield, or St. Louis, depending on some venue factors.  But a person can request to have these venues changed by filing a motion with the bankruptcy court.

To file a bankruptcy case in Kansas, a debtor must have resided in Kansas (or had the majority of his/her assets) the greater part of the 180 days prior to filing their case.  If a debtor has resided in Kansas for a little over three months (or had the majority of their assets in Kansas for a little over three months), they can file their case in Kansas.  To use the Kansas exemptions, there is a time residency requirement in Kansas.  In practice, this is usually not a big deal, because even if someone can’t use the Kansas exemptions, they can use the federal exemptions, which are normally favorable.

To explore these issues further, please contact us at Phillips & Thomas LLC for a free consultation.  These venue issues can become complicated, and it is never a good idea to jump to conclusions without getting specific legal advice for a bankruptcy filing in Kansas or Missouri that is tailored to your specific situation.

Read More:  Surrendering Collateral In Bankruptcy

Bankruptcy Adversary Proceedings Under Section 523: Seeking To Prevent The Discharge Of Certain Debts

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Adversary proceedings are litigated matters within a bankruptcy case.  They are not common, but can arise in certain special circumstances.  They are serious matters that deserve your attention.  Some of these situations will be discussed in this post.

When a bankruptcy case is filed, all of the creditors receive notice of the filing.  By law they are provided with a opportunity to file a complaint objecting to the discharge of a debt, or the discharge of the entire case.  A creditor can object to the discharge of its debt if it believes the debt was incurred in certain fraudulent circumstances (fraud, malice, defalcation in a fiduciary capacity, and a few other rare scenarios.).

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Student Loans And Bankruptcy In Kansas and Missouri

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Many people who file a bankruptcy case either have student loans, or are going to need them in the future.  So it’s important to be aware of the basics regarding how student loans and bankruptcy connect with each other.

The general rule is that student loans can’t be “wiped out” in a bankruptcy.  This is not correct.  To pursue a discharge of student loan or educational loans debt, a separate action in bankruptcy court must be undertaken in an adversary proceeding.  We have written about this topic elsewhere in this blog.  To see the details of this area of the law and how things work, please click on this link here.

The rules are complicated, and this type of litigation typically becomes a very fact-based analysis.  Like most things in the law, there are exceptions, qualifications, and nuances to general legal principles.  Student loans actually CAN be discharged in a bankruptcy case under special circumstances if the matter is litigated before a bankruptcy judge.

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If the repayment of the student loan involves difficulty in maintaining a reasonable standard of living, if this type of hardship is expected to continue for the near future, and if you have made a reasonable effort to try to repay the student loans, then you should consult with us to see what your options are.  You may be surprised to discover just how many options you do have.

And even in situations where the loans are not able to be wiped out (called “discharged”), they can still be restructured with modified interest rates in Chapter 13 or Chapter 11 plans (even at 0%) so that the debtor is able to benefit greatly from the bankruptcy process.

So, when it comes to talking about student loans and educational loans in bankruptcy, it is important to remember that this is not an “all or nothing” process.  Solutions can come in different forms.  The first thing you need to do is speak with a qualified attorney who has handled these cases.  And if you happen to need to receive or renew a student loan while you are in a Chapter 7, Chapter 13, or Chapter 11 case, you can do that.  Once a request is made to the bankruptcy court or bankruptcy trustee, a debtor can take out or renew a student loan.  It happens all the time.

Read More:  Divorce And Bankruptcy

Missouri Or Kansas? How The State Line Affects People In Kansas City Who File Bankruptcy

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Kansas City is one of the few major metro areas in the US that is split in half by two different states.  Although bankruptcy is Federal law and is filed in Federal Court, the two state make up of Kansas City has a profound affect on bankruptcy in Kansas City.

The initial effect the state line has in Kansas City is determining where a case is filed.  Bankruptcy cases in the Kansas City metro area are filed either in the Federal District of Kansas or the Federal Western District of Missouri.

The District where a case is filed determines or influences many things in a bankruptcy case.  It determines the basic things like the place where documents will be filed and where a client will go for their Court dates.  It can also have a large effect on the outcome of a case, or the resolution of a particular issue in a case, because the District of Kansas and the Western District of Missouri are in two different Federal Circuits.

The District of Kansas is in the 10th Federal Circuit and the Western District of Missouri is in the 8th Federal Circuit.  These different Federal Circuits can have different interpretations of the bankruptcy law due to the rulings by judges in these Circuits. This differing of opinions on issues can result in different outcomes regarding issues presented in front of the court.

In addition to two different Federal Circuits, we also have two different Federal Courthouses in Kansas City.   We have the District of Kansas Federal Court in Kansas City, Kansas, and the Western District of Missouri Federal Court in Kansas City, Missouri. These Courts each have their own judges, case law, and rules that can also differ between each jurisdiction.

All of this means that the same question in a bankruptcy case can sometimes have different answers, depending on where the case is filed.  This is why you really need to consult with an experienced attorney regarding bankruptcy.

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Reasons For Bankruptcy In Missouri And Kansas

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The reality is that there isn’t a “typical” profile of someone considering a debt reorganization, liquidation, or restructuring.  Financial difficulties can happen to anyone at any time.  The typical client spans a very wide spectrum.  There are, however, common situations that lead people to situations where they need help.  These situations often (but not always) involve one or more of the following scenarios:

  • Job loss with extended period of underemployment or non-employment.Extended medical problems which result in unmanageable medical bills and treatment programs.
  • Mortgage payments that keep increasing, especially with variable mortgage rates, with a person being unable to cope with the increases.
  • Business owners who see their core business decline or evaporate, with a large amount of debts from vendors or suppliers.
  • Marital issues leading to divorce, with each party being saddled with large amounts of unanticipated debt.
  • The repossession of an asset that has left a person with a large “deficiency” judgment on something, like a boat, house, furniture, or other piece of collateral.
  • Unforeseen family emergencies of any kind that cause people to drain away their security reserves.
  • Tax issues that have been in hibernation for a long time, and that suddenly become a problem.

Bankruptcy is one of the best, if not the best, ways to manage tax debt.  A person can wipe out tax debt in certain situations, or restructure it with possibly wiping out interest and penalties.

This list is by no means exhaustive.  There are many other situations that can cause problems for people.  Gambling debts, fines and costs in court cases, and various other situations can also act to hurt people.  The list above does show just how common and varied the bankruptcy experience really can be.  You are not alone.  It’s a lot more common than you think.  When you empower yourself by taking action, you will find a great burden released from your shoulders.

 If you would like to schedule a free initial appointment to talk about bankruptcy, please give us a call at 913-385-9900 or send an email to phillipsandthomas@gmail.com.  

 

Why You Should Consider Chapter 11 Bankruptcy

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No one ever said going into business would be a bed of roses.  It’s difficult and requires a constant attention to details.  And when you’re starting out, the last thing you want to think about is the possibility of a reorganization.  We understand that.

However, when things get rough, you need to be aware of all your options.

The key word here is “all“.

One of the things we have consistently noticed is a psychological dynamic with business owners that prevents them from considering options that might actually help them in the early stages of financial distress.

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Our Blog For Chapter 7, 11 And 13 Bankruptcy And Criminal Defense In The Kansas City Area

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Welcome to our Kansas City bankruptcy and criminal defense blog.

This blog came about as a result of some recent discussions by attorneys and staff at Phillips and Thomas LLC.  We were talking about how we saw the same general questions come up over and over again by people considering filing bankruptcy or who are facing criminal cases.  Our attorneys have met with many thousands of people over the past 15 years who were considering filing bankruptcy in Kansas City metro area, or who have faced criminal cases, and we have seen the same topics come up repeatedly in many of these meetings.  We believe our blog is the most extensive and informative for these two practice areas (bankruptcy and criminal defense) in the metro Kansas City area.

We have discussed how we often see people dealing with debt problems and criminal issues in the Kansas City area, using information about bankruptcy and criminal defense that they thought was true, but was in reality incorrect or did not apply to their situation.  Often times people have lived their life under these false assumptions for years and thus have caused themselves, and their families, needless hardship and suffering.

This blog is not designed to replace specific legal advice for individual situations.  You should always talk to an attorney regarding your particular situation.  Also, one of the best suggestions we can make is to talk to a knowledgeable attorney immediately, even if you are just in the information gathering phase.  The sooner you get legal advice, the better.  We do hope that this blog can provide some general information for people with debt or criminal problems who are considering filing bankruptcy or facing criminal issues in the Kansas City metro area.  We will be updating this blog frequently, so please feel free to check back.

If you live in the Kansas City metro area and you would like to meet with one of our attorneys concerning your debt problems, bankruptcy questions, or criminal issues, please call us at 913-385-9900 or email us at phillipsandthomas@gmail.com to schedule a free consultation.

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