Posts tagged "bankruptcy"

The Difference Between Assets and Liabilities

empty-pockets

We all assume that having things is the same thing as having wealth. You see someone driving a Mercedes, and assume he or she is wealthy. More often than not, it just means that person has a huge loan payment to make each month. Cash flow is not the same thing as wealth. Wealth means having assets — money in the bank, valuable investments, and things unencumbered by loans. If you owe money on all your things, you just have liabilities.

You can have a lot of things and still own nothing. Like the founder of Michigan Brewing Co., who just filed bankruptcy and listed $3,236 in assets and more than $8,200,000 in liabilities.

Very few people are truly wealthy. You cannot judge a book by its cover, and you cannot judge wealth by the number of things someone has. (via Daniel Gershburg)

(image: http://www.flickr.com/photos/danmoyle/5634567317/)

Bankruptcy Filing and Bullshit

Yesterday, Paul Ryan and his campaign put themselves firmly in the bullshit category, at least when it comes to bankruptcy statistics. Ryan said:

    In 1980 under Jimmy Carter, 330,000 businesses filed for bankruptcy. Last year, under President Obama’s failed leadership, 1.4 million businesses filed for bankruptcy.

Read Paul Ryan’s Bullshit About Bankruptcy Data at Credit Slips.

Where is the Financial Education?

Guest post by Frank Pipitone.

Unless you have been hiding under a rock, you have heard or read about the looming student loan economic crisis. The National Association of Consumer Bankruptcy Attorneys (NACBA) refers to this coming crisis as the student loan “debt bomb.”  A brief look at the NACBA report and the startling statistics explains why they coined this explosive title.

Over 37 million Americans are currently saddled with student loan debt with the total amount owed in excess of 1 trillion dollars. While these numbers are frightening, some of the trends outlined in the report are more concerning:

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Wells Fargo Fined $3.2 Million by New Orleans Bankruptcy Judge

Wells Fargo got in major trouble for applying payments first to fees, then to the principal of a mortgage. And because it pissed off a New Orleans bankruptcy judge by fighting the case for five years while the homeowner’s lawyers worked without pay. (From Bloomberg Law)

Caveat Emptor Lawyer Network, October 13, 2011

Minnesota consumer lawyer Randall Ryder got a $22,000+ Midland Funding debt collection lawsuit dismissed for a client who had been disputing the debt for years, but couldn’t make it go away. Says Ryder “Bringing the proverbial bazooka to a gunfight, we produced a 5 page affidavit with 70 pages of exhibits to prove the client was not liable.”

North Carolina bankruptcy lawyers Duncan Law says that, in some cases, consumers in foreclosure may be able to stay in their home for a year or more while the process plods along. This can be a good thing, especially if it allows families to save for an emergency fund or security deposit.

Caveat Emptor Lawyer Network, September 15th, 2011

North Carolina bankruptcy attorneys Terry, Damon, and Melissa Duncan regularly write about bankruptcy issues on their law firm blog. Apparently, some of their clients worry about their ability to continue contributing to their churches during bankruptcy. The answer is yes, if you have a history of giving regularly. Having a religious epiphany on the even of your bankruptcy filing won’t cut it.

Minnesota debt collection defense lawyer Randall Ryder got a debt collection lawsuit dismissed—with prejudice—with a single phone call recently, showing the value of consulting a lawyer.

Caveat Emptor Lawyer Network, August 8th, 2011

Minnesota consumer lawyer Randall Ryder writes about a recent New York Times article in which debt collectors play the victim, and complain they are getting harassed by consumers. It turns out that at least one debt collector interviewed for the article is violating Minnesota law. Nevertheless, debt collectors think they should have a “bill of rights” they can enforce against the consumer they call up and harass about paying debts.

North Carolina bankruptcy lawyer Duncan Law writes that, while buying a home during a Chapter 13 bankruptcy may be difficult, it is possible if (1) you can find a lender who will give you a loan, (2) you can come up with a substantial down payment, and (3) the U.S. trustee approves your plan to buy a home.

(photo: http://www.flickr.com/photos/james__clayton/5531866236)

Bankruptcy Discharge Doesn’t Apply to Debts Assigned in Divorce Court

Debts you agree to pay as part of a divorce settlement are non-dischargeable—as to your ex—in bankruptcy. In other words, if you share a credit card with your spouse, but you agree to assume the credit card debt in your divorce, you cannot get a bankruptcy discharge for your agreement to satisfy your ex-spouse’s debt. That means you could still owe the debt to your ex-spouse after bankruptcy.

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The Bankruptcy Stay & Contradictory Dunning Letters

Debt collectors do a lot of ridiculous things, but this letter from Lender Business Process Services is apparently an attempt to alter reality. LBPS seems to think it can simultaneously collect and not collect a debt.

Here is its disclaimer, which provided at the bottom of its dunning letter:

This communication is from a debt collector as we sometimes act as a debt collector. We are attempting to collect a debt and any information obtained will be used for that purpose. However, if you are in bankruptcy or received a bankruptcy discharge of this debt, this letter is not an attempt to collect the debt, but notice of possible enforcement of our lien against the collateral property.

(Emphasis added; plus, I got rid of the all-caps for readability.) One of the two italicized statements is false. Either the letter is an attempt to collect a debt (which it obviously is—the letter begins “[w]e hereby demand that you cure the default by payment of the amount shown above”), or it isn’t. It cannot be both at the same time.

That means the letter contains false statements, which would seem to violate the Fair Debt Collection Practices Act. And if it is an attempt to collect a debt, it would seem to violate the bankruptcy stay, if LBPS sends it to someone who has filed bankruptcy.

(Thanks to Minnesota bankruptcy attorney Brad Perri for the tip!)

(photo: http://www.flickr.com/photos/vermininc/2437881219/)

California Bankruptcy Attorney Malcolm Ruthven Joins the Caveat Emptor Directory

Malcolm Ruthven is a bankruptcy attorney in the San Fransisco Bay Area, and now a member of the Caveat Emptor bankruptcy attorney directory. Malcolm is a solo practitioner, and deals with all his clients directly.

He is also passionate about what he does:

I like seeing the relief in the eyes and manner of my clients after they’ve taken the difficult steps they need to take toward a financial Fresh Start. It’s a privilege to be an important part of that process.

To contact Malcolm, visit his California bankruptcy attorney profile.