Most people I represent are concerned about their 341 meeting where they can be asked questions by the trustee assigned to their case. It’s court. Creditors are invited to come too. Sounds scary, right? The truth is that most of the 341 meetings last about 10 minutes, and are much less stressful than my clients…
Your current monthly income (“CMI”) is defined in the bankruptcy code as income you have received during the previous six months before filing a bankruptcy petition. If you file your case in March, the relevant months will be September, October, November, December, January, and February. If you add up all of your gross income for…
Everybody knows that filing a bankruptcy case is a negative mark against your credit score. However, most of the people I meet with arrive in my office with high balances near the maximums, late payments, or other types of similar negative marks already. Generally speaking, most potential clients are going to need to rebuild their…
A bankruptcy preference is a transfer of an asset shortly before a bankruptcy filing to a specific creditor. These types of transfers result in one creditor being treated more favorably than other creditors. Generally, the trustee will review the 90 days before a bankruptcy petition is filed to determine whether such a transfer should be…
Creditors are sending out IRS Form 1099-C seemingly more than ever these days when a debt is cancelled (short sale, credit card settlement, etc.) or sometimes when discharged in bankruptcy. The reason people receive these forms is that the IRS treats forgiven debts as income based on the theory that someone could be paid for…
I hear from clients all the time who feel guilty about not paying back their credit card debt or falling behind on their mortgage. In my opinion, banks utilize a strategy of laying that guilt on so people pay good money on bad debts when they have a right not to. This story about the…
I often meet with clients who need help through bankruptcy, but have inherited a piece of real estate or other kind of property from a relative which the client now owns free and clear. They are concerned that they will lose this property if they file for bankruptcy. In these situations, North Carolina bankruptcy exemptions…
Many clients think they will lose their household furnishings, cars, houses, or other belongings if they file for Chapter 7 bankruptcy. In over 90 percent of the cases filed, no property is turned over to the trustee, and the client keeps it all. These are called “no-asset cases” because all of the client’s property is…
During an initial consultation, I am often asked what I think about debt consolidation companies and the services they provide. The short answer is that I think those services are generally a bad strategy. They damage someone’s credit similar to a bankruptcy filing, but the client doesn’t get the advantages provided by the bankruptcy court:…
One of the most effective ways a creditor can get paid is through wage garnishment. Generally, a creditor gets a court order which directs an employer to withhold a certain amount of their employee’s pay. The garnishment order is usually a very unpleasant surprise which arrives before payday. If a wage garnishment takes more from…