There are situations where people will take out a short term loan against their car or some other vehicle. Typically, these loans have high rates of interest, and are marketed to people who are unable to secure credit in more traditional ways. Their treatment in bankruptcy can come as a great relief to debtors who find themselves paying and paying, yet never making any headway in paying off the loan.
Overland Park Bankruptcy Attorney
Payday loans are extremely high-interest, short-term loans that are targeted to people who have an immediate need for a loan. Are these loans treated any differently in bankruptcy from other debts? Are the threats and harassment from these companies to be taken seriously? Persons filing bankruptcy with payday loan debt need to be aware of several issues when it comes to payday loans.
First, payday loan companies are creditors like any other,and their debts will be discharged like any other unsecured creditor or signature loan. However, there are some special nuances to these types of creditors that you should be aware of, so that you can better protect yourself.
One of the issues that arises in a bankruptcy filing is whether a utility company (i.e., gas, water, light, etc.) can disconnect a debtor’s utility service after a bankruptcy case is filed. Under Section 366(a) of the Bankruptcy Code, a utility service is prohibited from “altering, refusing, or discontinuing service to, or discriminating against, a trustee or debtor solely on the grounds that the debtor has not paid its pre-petition debts when due.” Section 366(a) is a temporary prohibition, and it has qualifiers.
In the repossession of secured collateral in a bankruptcy case, it happens on occasion that some of the items have been affixed to the premises, such as boilers, heaters, cooling systems, cabinets, rugs, chandeliers, etc. What happens then? Can the creditor take the item or items?
When an item of collateral has been permanently affixed to realty, it is said to be a “fixture” and cannot be removed. Even if a piece of collateral may be removed from a premises, it may still qualify as a fixture under some situations. In Re Heflin, 326 B.R. 696 (W.D. Ky 2005). The relative ease with which an object can be removed is one of the tests to see if something qualifies as a “fixture” or not.
One of the purposes of a bankruptcy reorganization (individual or corporate) is for the debtor to shed himself or herself of obligations that are no longer helping the debtor. Often, secured collateral is dragging down the debtor, and preventing him from getting a fresh start.
In personal cases, sometimes car loans, home loans, equipment loans, and other types of secured collateral needs to be “surrendered” (i.e., given back) to the lender. In business cases, it often happens that business equipment or real estate of all types will need to be given back to the lender. The surrender of collateral can present some issues that should be kept in mind.
Overland Park Bankruptcy Attorney
It is not well known, but a debtor in a Chapter 7 bankruptcy can redeem secured property using Section 722 of the Bankruptcy Code. What does it mean to “redeem” property? Redemption means that a secured debt on some secured collateral (e.g., car, boat, trailer, furniture, etc) can be paid off completely by paying the loan to the fair market value of the collateral, rather than the full loan balance. In the process, the debtor can save literally thousands of dollars.
If you watch late night television, you no doubt are aware that “Ponzi schemes” do exist. They are out there, and are very real. One recent case from the 10th Circuit demonstrated the interesting intersection of criminal and bankruptcy law. In our blog, we have tried to make a point of demonstrating the nuances of bankruptcy law by showing how it can be interpreted when it intersects with tax law, criminal law, disability law, domestic law, intellectual property law, and other areas of the law.
It is an all-too-common issue in bankruptcy. The bankruptcy attorney will be preparing the case for filing, and will discover that the debtor or debtors have not filed federal or state tax returns for some year or years. If there is one piece of advice I would want to give regarding bankruptcy and taxes, it is this: always file your tax returns in a timely way. Can’t pay the tax? File the return anyway. Don’t want to deal with it? File the return anyway. Stressed out or depressed? File the return anyway. Don’t want to put the effort in to get the returns done? File the return anyway.
There are situations where debtors in bankruptcy have received “overpayments” of benefits from the Social Security Administration. Typically, these benefits are in the form of social security disability sums that the debtor has already received.
The debtor will then get a letter informing him or her that the disability amount was paid out “in error” and that it needs to be recovered. Obviously, this is not the type of news that is welcome for a distressed debtor, who has enough problems just trying to get back on his or her feet. The question then arises: is the debt for social security disability overpayments dischargeable in a bankruptcy?
DUI and DWI cases are some of the more common criminal offenses. People who have the bad luck to become involved in drunk driving cases quickly find out that these cases carry with them a significant financial burden. And at the conclusion of the case, it often happens that there are fines, restitution, or other forms of court-ordered payment that need to be made. Can these debts be discharged in a bankruptcy filing?
The answers are complex, and provide a good example of the intersection between criminal defense and bankruptcy. At Phillips & Thomas LLC, we practice in both of these areas and are experienced in dealing with the nuances of bankruptcy and drunk driving cases.