Barefoot Drivers in Massachusetts

Barefoot drivers in Massachusetts

By Ginger B. Kelly, August 1, 2018

As most of you know already, I am a Facebook user. Click Here to see my Facebook page.  I also post on Twitter, Instagram and other things like, Linkedin and AVVO.com.  Because of my strong Social Media presence, it’s not unusual for people ask me interesting legal questions.

One of my dearest friends posed a very general question on Facebook regarding driving barefooted in Massachusetts.  He wanted to know whether or not it was legal to drive with no shoes or footwear, in the Commonwealth of Massachusetts. Although I am primarily a bankruptcy and consumer defense attorney, I sometimes handle a few criminal and civil cases, including traffic citations.  I told my friend that I would do a little quick research on this interesting general topic.

This is what I found…

I started with the Massachusetts laws, or statutes, regarding driving while impaired.  As most of you already know, driving while impaired means a lot of things, but it doesn’t mean driving without shoes.  Impaired driving has to do with defendants who ingest, smoke or take substances that “impair” their ability to drive.  In other words, don’t drink and drive or don’t drive while intoxicated or when taking drugs or substances, whether or not those substances are legally permissible.  If they cause you to drive unsafely, it’s illegal.  Although driving barefooted may be fun, it’s probably not exactly intoxicating.  Thereby, barefooted driving would not qualify as an offense or apply to the law, under the impaired driving statutes in Massachusetts.  Arguably, if driving without shoes induces an impaired driving intoxication, then for the sake of argument, there may be some remote chance there is a legal situation or offense.  I said remote.  If this happened, such a strange situation would be handled by a judge on a case by case basis.

Moving right along…

There are a similar set of statues in Massachusetts called the distracted driving statutes.  Distracting driving is similar to driving while impaired in that a driver can not allow certain things to interfere with safe driving, but these are different because they don’t involve substances that impair driving.  Under the distracted driving statutes, all drivers who drive in Massachusetts are prohibited from doing things that prevent them from keeping their “eyes on the road,” such as text messaging and cell phone use, using technology and other devices. One part of this law, for example, is that all drivers under the age of 18 are prohibited from all cell phone use.  These kinds of things are considered “distracted” driving but there is no mention of barefoot driving or driving without footwear.

For the sake of argument, if driving with no shoes is distracting to you and you can’t keep your eyes on the road, or perhaps the shoes or flip flops you just kicked off your feet are getting under your foot pedals, causing you to drive in an unsafe manner, this would be a matter that could be considered distracted driving.  However, this sort of barefoot driving case would be a matter that should be settled by a judge or jury at court.  I don’t suggest doing this.  But for sake of this research, there is nothing per se, in Massachusetts, that would prohibit one from driving without shoes, according to the impaired or distracted driving statutory laws. But there are other laws pertaining to driving.  Let’s take a look.

Taking a look at the new Safe Driving laws of Massachusetts, one can see that there are a lot of restrictions regarding mobile phones, devices and driving over the age of 75 and older.  However, I found nothing in the safe driving laws of Massachusetts regarding barefoot driving.  So there you have it!  Let’s move on to regulatory law.

I began my quick regulatory law research by taking a look at the Massachusetts Driver’s manual.  The Massachusetts Driver’s Manuel states, “In your vehicle, nothing should get in the way of your ability to see, react, or drive.”  In other words, you can not have distracting objects in your vehicle, like wearing both head phones, a television visible to the driver or anything that could get in the way of your feet, and use of the vehicle pedals, while driving.  Again, this sort of thing implies that it’s not permissible to simply kick off your shoes and let the shoes interfere with safe driving.  However, the RMV manual mentions nothing about driving without shoes.  So, RMV regulatory law isn’t a big help here, other than giving us a better idea of what it means to drive safely, not distracted and not intoxicated or under the influence of substances. Never the less, we still don’t really know whether or not there is anything in Massachusetts law that says it is not permissible to drive without shoes.

I ran a search on Mass.gov to see if I could find anything further in the regulations regarding driving barefoot.  I found something interesting regarding footwear guidelines in the UK, but I found nothing for  driving while barefoot in Massachusetts.

I also ran a case law search on my legal search engine.  I found nothing regarding case law in Massachusetts.  Since I could not find any recent case law regarding barefoot drivers in Massachusetts, it is safe to assume there is no law or precedent regarding barefoot driving in Massachusetts.  Therefore, it is highly probable that it is legal to drive without shoes, with only socks or barefoot in Massachusetts, provided that driving without shoes is safe and does not distract one’s driving ability to drive safely.

Drive safely with naked tootsies or just socks in Massachusetts. Just be careful and be sure that your naked foot driving is free from intoxication, distraction and that kicking off your shoes never gets in the way of driving safe.  Good luck!

If you have any comments or questions on this topic, or law in general, I invite you to post your comments, below.  It’s interesting to see what others have to say.

If you have other legal questions, especially if you are contemplating bankruptcy or dealing with collections or debt collection law suits, Attorney Ginger Kelly is now accepting clients in the Dudley, Webster, Sturbridge, Fiskdale, Southbridge, Saundersdale, Oxford, North Oxford, Charlton, Charlton Depot, Auburn, Leicester, Rochdale, Spencer, Brookfield, East Brookfield, West Brookfield, North Brookfield, Warren, Brimfield, Wales, Palmer and Holland.  We can explore whether or not bankruptcy is the easy way out for you.  Our office is a quiet and comfortable place to talk, and a free pot of coffee will be waiting for you when you arrive.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit our website, or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved

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Master Medical Debt Lawsuits in 10 Easy Steps

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Master Medical Debt Lawsuits in 10 Easy Steps

By Attorney Ginger Kelly, July 19, 2018

Being sued by a debt collector or service provider over medical debt is no picnic. If you can’t afford to pay the initial debt, it is likely that you still can’t pay it. Going to court is also very stressful, time consuming and costs you time off from work and other more important things. These are things we all worry about.

Although you may be tempted to ignore a medical debt law suit you know you can’t pay, it is always best to show up. If you ignore the law suit, the other side wins, automatically by default.  A default Judgment will haunt you and your credit report for twenty years in Massachusetts.

What happens when you show up for court?  Below are 10 steps that you can take if you are facing a medical debt lawsuit.

  1. Find out where the debt comes from

You cannot properly talk about your lawsuit until you fully understand why you are being sued. Past bills should tell you something about the debt.  Find a date of service and, perhaps, an itemized list of what services were given to you that you are being charged for.

  1. Answer the lawsuit

In most medical debt and other consumer debt cases, people don’t have an attorney. Hiring an attorney is a wise move, so seek a free first consultation with a lawyer before you hire them. Sometimes, a lawyer can help you to represent yourself.

Many times, when people meet certain income guidelines, they can apply for free legal aid. Worcester Community Legal Aid services is an example of one of many nonprofit public service centers, helping clients with free and reduced fee legal services for debt collection law suits. Many times, a limited service lawyer will be at the courthouse to help clients. Call and find out when this free service is available.

  1. Prepare for court

The next step to take is to prepare to answer your lawsuit. In Massachusetts a defendant has twenty days from the date of notice to answer a small claims or civil suit. Answering a law suit involves filling out paperwork at the court, which will involve answering every paragraph and including all your legal defenses along with a certificate of service saying that you mailed a copy to the other side. Then, you have to mail the paperwork to the other side who is suing you.  Next, show up at the initial court date. After you answer the suit, the court will set a date for the discovery part of the trial. It is very helpful to find a lawyer who can advise you regarding this process.

It’s important to make this initial court date.  Traditionally, in Massachusetts, this is called a discovery or pre-trial conference where you have time to talk to the other side and see if you can make a deal.  It’s helpful to ask for a payment plan and a reduction of the debt.  At this stage of the game, it is unlikely that the judge will grant you a continuance that would move the court date further out. It’s probably best not to ask unless you live out of the jurisdiction and you would like to get counsel to move the suit to a better place where you can defend.

At the discovery part of your lawsuit, you will have to file more paperwork about your finances and will need to sit and wait to talk to someone. This is not the time to present evidence that you are not liable for the debt. If you are not liable, you can present this evidence at hearing. This means, you will need to show up another time for hearing.

  1. Know about wage garnishment

If at hearing, you are found liable for the debt, or if you failed to answer the lawsuit and the judge rules against you, the court may issue a judgment order and an execution, giving the lender or collection agency the ability to garnish your wages. Social security benefits, disability insurance payments, unemployment, VA benefits and other things, like public assistance and child support are excluded from garnishment.  If you have any of these forms of income, it’s wise to set up a different bank account where those funds are deposited and keep all garnishable wages in another separate account. Do not mix these funds with other things like regular wages.

By federal law, the lender or collection agency can’t take more than 75% of your income. Based on Massachusetts law, which is more protective, creditors can take only 15% before taxes or other deductions, or they can take your disposable income less 50 times the greater of the federal or Massachusetts minimum wage. Effective January 1, 2017, the Massachusetts minimum wage is $11 per hour.  This means that any amount exceeding $550 per week can be garnished from your wages, in Massachusetts.

Also, under Massachusetts law, some medical institutions can take your tax return refund to pay past due bills.  It’s better to take care of them before your tax refund is levied.

  1. Were you served properly?

Sometimes wages are garnished before the plaintiff is even aware that there’s a lawsuit against them. This happens most commonly when you’re improperly served. Examples of using “improperly served” as a legal defense include papers being only mailed to you and not delivered in person, papers being left at an incorrect residence, or papers being mailed to an old address. Being “improperly served” does not mean that the papers were left with a family member or friend at your residence and they forgot to tell you about it. If that happened, you’re still on the hook.

If you have been improperly served, or if you find out that the court mistakenly started garnishing wages because you have the same name as an actual plaintiff, you should contact a lawyer immediately.  Find out what possible resources there may be for you in your situation.

  1. Get low-cost or free help from financial assistance programs

Under the Affordable Care Act, these hospitals must provide some type of financial assistance program to low-income patients. Even if you aren’t from a low-income household, you should apply, as some hospitals extend their programs far beyond the poverty line. Many hospitals also extend this program to insured patients.

  1. Discriminatory pricing

If you are being sued in court and are uninsured, discriminatory pricing can serve as a defense. If you qualify for the hospital’s financial assistance program, the hospital must legally reduce your bill to the amount generally billed to insured patients.

  1. Look out for balance billing

Balance billing happens when your hospital or medical provider bills you instead of or in addition to Medicaid or Medicare. It’s a forbidden practice, and you are not responsible for any amounts due when this happens.

You may be able to identity balance billing if you receive an “Explanation of Benefits” from your insurer that states the amount they covered and the amount you still owe. If this does not match the bill your medical provider sent you, there is a cause for concern. Additionally, if the bill you receive does not show any payment from your insurance when you are, in fact, on Medicaid or Medicare, it may be a sign that you are a victim of balance billing.

  1. Stop lawsuits before they start

If something about your bill doesn’t look quite right, there are ways to reduce it to its fair amount. Debt collectors, hospitals, and other medical providers don’t want to take you to court. It costs them money, and the odds of them actually getting a full payment at that point are very low. They are almost always willing to work with you before issuing a lawsuit. Negotiate. Apply for financial assistance. Set up a no interest payment plan directly with your health care provider.  Keeping the lines of communication open is the best way to avoid costly litigation and compounded interest and fees.

If you didn’t have insurance at the time of service, a good idea is to contact the doctor or debt collection agency and try to negotiate the bill down to Medicaid/Medicare prices.  This should save you at least one to two thirds the initial cost.  If a provider doesn’t want to negotiated, your attorney can use, “discriminatory pricing: as a legal defense in court.

  1. Weigh bankruptcy

There may come a point in the process to consider bankruptcy as an option.  Filing for bankruptcy may alleviate the medical debt and all your other bills. However, as a cautionary measure, bankruptcy is not a decision to take lightly.  A chapter 7 will remain on your credit reports for up to 8 years and make it difficult to qualify for new credit with a low interest rate.

There are two types of bankruptcy: Chapter 7 and Chapter 13.  Chapter 7 is a form of liquidation.  If you qualify, a Chapter 7 bankruptcy requires you to sell off all of your non-exempt assets to settle what you can of your debt obligations. If you don’t have any non-exempt assets, this part probably doesn’t matter much. What does matter is that most of your debt, if not all, will disappear after you receive your discharge.

A chapter 13 Bankruptcy is a type of reorganization of your debts.  In a Chapter 13, you do not have to sell off any assets, but the debt won’t disappear either.  Instead, you will pay your debt from your disposable income via a 3-5 year payment plan. After the 3 or 5 year plan is over, the rest of any qualifying debt you could not pay out of your payment plan is discharged.

Filing for bankruptcy makes sense if the court has already issued an order to garnish your wages.  However, at any other point in your situation, it makes good sense to try to negotiate and set up a payment plan with the medical service provider or debt collection agency directly.

A debt collection agencies last resort is wage garnishment, but it doesn’t have to come down to this. By knowing your rights and negotiating, effectively, rather than damaging your credit scores, you may have a good chance to work through a win-win situation.

If you are contemplating bankruptcy, and have some questions about wage garnishment or medical debt, Attorney Ginger Kelly is now accepting clients in the Dudley, Webster, Sturbridge, Fiskdale, Southbridge, Saundersdale, Oxford, Charlton, Auburn, Leicester, Spencer, Brookfield, East Brookfield, West Brookfield, Warren, Brimfield, Wales, Palmer and Holland.  We can explore whether or not bankruptcy is the easy way out or not.  Our office is a quiet and comfortable place to talk and a free pot of coffee will be waiting for you when you arrive.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, Chapter 7, Choosing a lawyer, Civil, civil law, Collection, credit card debt, Debt, Debt Collection, Deficiency, Deficiency Debt, Empowerment, Filing, Financial, Hiring Counsel, Judgements, Law, Lawsuits, Legal, Massachusetts, Massachusetts law, Medical Debt, payment, practical stuff, Rhode Island, Uncategorized, Wage Garnishment

Clearing Financial Clutter, Minimalist Style

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Clearing Financial Clutter, Minimalist Style

By Attorney Ginger B. Kelly, June 6, 2018

Living the minimalist lifestyle has been an ongoing passion of mine for at least the past five years. Working on becoming less cluttered, less driven by my own urges and material wants, is something I strive to do every day.  In turn, this leaves more time to become more creative, mindful and wise. This is a process, not a destination.

Minimalism is also a movement. It’s a personal organization life-design and a simpler way of life.  Living the simple less cluttered life, financially, tends to make your wallet and your heart more full and happy.  A person only needs a few things to find comfort and safety.  Likewise, a person only needs a very few tools to keep their financial life under control and comfortable.  Many credit cards and savings accounts will not bring more mental calmness and financial security.  In fact, a cluttered financial life will limit your options and your productivity.

USE ONE SIMPLE PLAN TO PAY YOURSELF FIRST

First and foremost, pay yourself.  Use one long term savings account, if possible.  The strategy is to save at least 10% for your long term retirement goals.  The minimalist strategy is to have only one 401(k) or one IRA and invest in this.  If you want to get fancy, have two accounts. For example, have one annuity and one 401(k) or have two 401(k) accounts, one for each spouse. If you are older, it is not uncommon to have more than one long term savings plan.  However, a multiplicity of whole life policies, stocks, savings bonds, mutual funds and 401(k) accounts will not help to drive your financial goals forward.  In fact, many accounts drive most folks crazy.  Avoid multiple fees, multiple financial institutions, more than one financial adviser and tons of “stuff” to look after. Then, save it and forget about it. Have the money taken out of your pay check, each and every pay period, and you’ll never miss it.  Out of sight, out of mind.  This really works!

Tip:  If you can’t save 10%, start with a minimum like 4%.  Increase this figure every year until you reach the goal of 10%.  Ask your tax accountant and financial adviser to help you plan a strategy that is realistic and works best for you.

HAVE ONE CHECKING ACCOUNT AND ONE SAVINGS ACCOUNT

Two or more bank accounts do not help clear the mind nor do they add value to your life. Two checking and savings accounts require extra passwords, extra time, extra books, extra statements, extra checks and other not so valuable things, like bank fees and charges. Get rid of all checking and savings accounts but one, unless you own a business. If you own a business have two, one for your business and one for your personal finances.

Also consider having only one savings account and using it. A savings account is an important tool, useful for short term goals, like car repairs and/or down payments, kid’s activities like summer camp, gifts and summer vacations. A good rule of thumb is to save 5% to 10% of your gross income each month for short term goals. That means, if you earn $2,000 per month, you should be stashing away at least $100 to $200 per month into short term savings.

Joint Account Tip: Sometimes it’s a good idea to have designated “jobs” when working together with joint accounts.  Find a simple plan and strategy for you, as a couple, and follow that.  Be honest with each other and communicate about everything important. If you can’t work together, seek counseling, a trusted priest, pastor or neutral party to help you correct underlying breakdowns, fears and anxieties.

Savings Tip:  Saving the equivalent of at least one car payment each month just for transportation is a great rule to follow, whether or not you actually have a car payment. If you aren’t saving anywhere from $100 to $400 per month, simply for transportation, then a $50 bus or mass transit pass may be the better option. For most folks, driving to work is far more important than an expensive mobile phone plan or eating out over and over again.

LIMIT CREDIT CARDS TO ONLY THREE

Get rid of all credit cards and revolving credit accounts but three. Why three? Most people remember and retain information very well in increments of three. Any more than three points, topics or tasks and the waters get muddy.  As a bankruptcy attorney I’ve seen a lot of things.  Having tons of credit cards seems to be a thing these days.  The point here is to not get hung up on the numbers of cards you have, but to shed unnecessary high interest cards and revolving accounts that charge unwanted fees. Caring for balances and payment dates is easy, when there are only three. No is a very empowering word.  Set a goal and use the word no to your advantage. When it comes to credit cards, less is best.

Tip: Don’t close credit card accounts in the days, weeks or months before making big purchases, like a home or a vehicle.  Closing credit card accounts can actually lower your credit scores for a time. Keep this in mind. After you’ve made that big purchase, then you can begin to close small revolving accounts you don’t need and ones with annual fees and things that do not add value to your financial well-being and peace of mind.

Another tip: Coordinate your credit card payments with your pay period.  This makes paying your cards, on time, every time, easier. Then, every pay period, when checking on your bank balance and direct deposit, pay your credit card bills (all at the same time). Having multiple due dates on many credit cards is nothing less than stressful and confusing. Ask your lender how to do this.

As we can see, there are a few financial “things” almost everyone needs to get by in life and plan a successful future. Too many and life gets complicated. Jen, Ray and Mary are great examples of this.

Jen and Ray are a couple who decided to take the minimalist approach and de-clutter their finances.  They gave themselves clear goals to de-clutter their finances, with broken-down steps on how they wanted to attain them.  Most importantly, they wrote down why they wanted to live more minimally and posted their goals on a calendar.  Over the course of just one year, they reduced their credit cards from ten to four. They eliminated six checking accounts to two. They also started a joint savings account and began to save money into Ray’s 401(k). They have saved over $300 in typical,  albeit unintentional, yearly overdraft fees and bank charges. Even better, Jen and Ray communicate much better and have far less stress and anxiety.

Mary, in taking her first steps toward getting rid of clutter, wrote down the fact that she didn’t need hundreds or useless items and financial tools to be happy, unique and to feel secure.  Part of Mary’s plan was to get rid credit cards and spend less.  She eliminated her JC Penny, WallMart and TJMaxx cards and decided to keep her cash-back Discover card and a lower interest Citi Bank card with no annual fee.  Mary also decided to have only one checking and one savings. Then, she started to save 10% of her income for a newer car purchase over the next year.  In less than eight months, Mary has saved over $100 in extra bank fees and interest charges and tucked away over $1,000 in her savings account. Mary doesn’t go out to eat very often anymore, but that’s OK.  She likes to cook.  For Mary, creating nice things, like meals, helps her to be a better person, all around.

You’ve heard it before, “everything you do and have in life (material things, relationships etc.) either adds value to your life or drags you down.” (author unknown) There is no third option. Things that add value to your life are things that make you happy, lead you to become more creative, healthier, wiser, and more energetic, develop your talents and so on. The same holds true for your finances.

Please feel free to comment, below.  We are open to your tips and ideas for getting rid of financial clutter and eliminating stress.

The Law Offices of Ginger B. Kelly is now accepting appointments to see clients in the Sturbridge, Southbridge, Dudley, Webster, Oxford, Sutton, Charlton, Auburn, Worcester, Framingham, Shrewsbury, Spencer, Brookfield, West Brookfield, Warren, Putnam, all of the Worcester County, parts of Hampden County and Northern Rhode Island.  We can explore whether or not bankruptcy is the easy way out in a comfortable, private place to talk.  We will have a fresh pot of coffee waiting for you.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing, gardening, conservation and agriculture.

To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved.

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Lien Removal via bankruptcy

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Lien Removal via Bankruptcy

By Ginger B. Kelly, Esq. May 23, 2018

Judgment liens on residential real estate or automobile titles can become a big problem for owners who want to sell or refinance. A lien is a type of instrument that secures a debt, similar to the way a mortgage secures a loan or note or a lien on a title can secure an automobile loan. Liens can be created for a number of reasons, like  to pay a judgment on a credit card debt, unpaid taxes, mechanic’s liens for unpaid services or water or sewer charges or any judgment in a lawsuit to pay a debt of any kind, even unpaid car loans or leases.

In Massachusetts, a lien from a judgment in a lawsuit is called an execution. The execution secures the amount that was awarded to the plaintiff and enforces the judgment awarded.  For example, credit card companies like Discover, Synchrony, Citi Bank or Bank of America, debt buyers like Midland Funding, and auto loan companies, like Wells Fargo and Ford Motor Credit, commonly record executions after receiving a judgment. Some companies even record liens before a judgment, if there is reason to believe the property will be sold or encumbered in any way.

There are only a few ways that a defendant may remove an execution, in Massachusetts. One way is if the debtor pays the creditor/plaintiff the amount owed on the execution. Then the creditor may ask the court to release the execution or lien. The other way is to pay the creditor a lesser amount owed, also known as a “settlement.” If the creditor agrees to a lesser amount, the creditor or the debtor can ask the court to remove the execution after the debt is satisfied by payment. Another option is if the judgment secured by the lien is vacated (i.e. thrown out). Without the underlying judgment, the execution can be released.  The only problem with this is that even if the execution is released, the debt won’t necessarily go away. The creditor might be able to re-file the lawsuit. A third option is to have the lien avoided in a bankruptcy.

When a homeowner files for bankruptcy in Massachusetts, he or she can claim a homestead exemption that protects between $125,000 and $500,000 in equity in their personal residence. The Bankruptcy Code allows filers to remove liens, also known as “avoiding” liens, like executions that impair this exemption. Once avoided, the lien can be cleared from the title by recording or registering orders from the bankruptcy court at the registry of deeds.

At the Law Offices of Ginger B. Kelly, we often obtain orders to clear liens from many of our client’s real estate, automobile titles and other personal property.  By obtaining and recording or registering orders from the bankruptcy court, we help many of our clients refinance or sell their homes and other property without problems stemming from a lien. If you have a lien that poses a problem for your property, talk to us (free of charge) and we will evaluate your options.

The Law Offices of Ginger B. Kelly is now accepting clients in the Sturbridge, Southbridge, Dudley, Webster, Oxford, Charlton, Auburn, Spencer, Brookfield, Warren and all of the Worcester County Area. We can explore whether or not bankruptcy is the easy way out or not.  We have a comfortable place to talk and a fresh cup coffee waiting for you.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved.

 

 

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With No Money, How Do I Pay My Attorney to File My Bankruptcy?

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How do I Pay My Attorney for My Bankruptcy?

By, Ginger Kelly, Esq.  April 10, 2018

The other day, a personal friend asked me (for a friend), whether or not they should she use their tax return tax refund to pay down their credit card bills or to replace the old and leaking roof on their home.  Their roof needed repairing badly.  Their credit card debt was very old and the payments were more than they could afford.  Even though I can’t make that final decision for this friend’s friend (or any of my clients), I can advise most folks of their legal options.  When people need to make a choice between a roof over their head or paying credit card bills, one good option available to most everyone is a fresh start.

In many or most situations, bankruptcy can give an individual or a couple, the fresh start they need. If you are in a position where you need to make important decisions like what to pay and what not to pay, like a roof on your home or to repair the vehicle you need to get to work, talk to a good bankruptcy attorney.  Most give free first consultations, like our office. Bankruptcy might be an option for you, or maybe not.  A person hasn’t lost but an hour of their time discussing their options with a good attorney.  Talking to a professional about options for taking care of debt, sometimes gives the clarity you need to make the right decisions for your future.

A client visited me the other day to discuss her situation. Apparently, she had debt exceeding any amount she could pay.  It wasn’t much debt, but it was a lot for her and that is important. Her earnings were barely more than the poverty level.  So while we had a nice hot cup of coffee, we talked about all of her options.  It was a nice pleasant, casual conversation.  I discovered that my client earned too much money to qualify for a free bankruptcy, through legal aid. She was sad and asked me what can be done.

Because her bankruptcy was not complex, I agreed to lower my fee. I gave her my best  fee option. Still, she was worried. Where would she find the money to pay the attorney fee? I asked her if she was getting a tax refund. She said yes, but it wasn’t enough. She was sickened with the idea of paying creditors all of her disposable income for years to come.

All of a sudden, she had an idea. She said, rather than trying to negotiate and pay down her credit card debt, using all of her disposable income, she said she could ask her uncle for the money. She said that she was thinking of asking him for a gift to help her pay down her loans anyway. Why not ask him for the same gift to pay her attorney’s fees?  Good idea! Sometimes asking relatives to help is a better option than worrying about how to pay overwhelming debt. I’ve had several clients in this kind of situation.

Once, a couple was in the same situation. The wife lost her job due to illness and then one thing led to another. They became deeply indebted, mostly to unsecured creditors (credit card companies). The best option for them was to file for bankruptcy. We talked a little bit and I gave them my best rate.  They were thankful, but without the extra cash, they didn’t know how to pay the legal fees. This was a problem for them.  However, determination overcomes lots of obstacles.

This couple scraped and saved and paid a little along. One spouse sold a baseball card collection and some tools.  The other sold some furniture they no longer needed. They used Craigslist and Facebook Yard Sale to sell a few more things.  They sent checks, one by one, to our office. Sometimes the check was small, sometimes large. We placed all of these funds into our client’s trust account, on hold for them until they finished paying. It didn’t take long. Within about four months, this couple paid all their fees, including the filing fee. This couple couldn’t have been happier.  I was so happy to help them in this way.

Once a person is determined to make a bad situation better, magic happens. There are more options for paying lawyer’s fees than these. Options are only limited by a person’s motivation, determination and imagination. Typically, I ask clients whether or not they have a tax refund coming to them.  This is a very good option for covering fees and things.  Then, I suggest asking friends or relatives for a gift.  At our office we have many ways of making your bankruptcy affordable, sometimes even free or at a reduced rate. Ask us how and perhaps we can help to make your fresh start,more affordable.  It may be easier than you think.

The Law Offices of Ginger B. Kelly is now accepting clients in the Sturbridge, Southbridge, Dudley, Webster, Oxford, Charlton, Auburn, Spencer, Brookfield, Warren and all of the Worcester County Area. We can explore whether or not bankruptcy is the easy way out or not.  We have a comfortable place to talk and a free pot of coffee waiting for you.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved.

 

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Filed under About Attorney Kelly, Bankruptcy, Chapter 7, Choosing a lawyer, Collection, credit card debt, Debt, Deficiency, Deficiency Debt, Filing, Financial, Foreclosure, Hiring Counsel, Judgements, Law, Lawsuits, Legal, Legal Rights, Liens, Massachusetts, Massachusetts law, Mortgages, payment, practical stuff, Rhode Island, Spouse, Student Loan Debt, tax refund, tax return, Uncategorized

Property Transferring No No’s, Before Filing Bankruptcy

Money in an envelope

Property Transferring No No’s, Before Filing Bankruptcy

by Attorney Ginger B. Kelly, February 23, 2018

There are a few types of transfers that will definitely not help if you want to file for bankruptcy to get a fresh start. One of those is types of transfers is called a prepetition transfer or (in other words) a fraudulent or irregular transfer.

Essentially, a prepetition transfer is a transfer of property (money or other things, including real estate) given to a person or creditor within 90 days from the date you file your petition. A prepetition transfer may also be a transfer of any property (money or other things, including real estate) to any insider, like a business partner, family or friend, within one year of your bankruptcy filing. Prepetition transfers are one of the biggest reasons why it is important to consult with a qualified, experienced, bankruptcy attorney, before you file. The prepetition transfer follows something called the 90 day rule.

Basically, the 90 day rule relates to debts that a debtor has paid, while insolvent, within the past 90 days of filing their bankruptcy petition and is set forth in section 547(b) of the Bankruptcy Code. The 90 day rule generally means that the US bankruptcy trustee has permission to avoid, (which means unwind or undo), any transfer made to a creditor or an insider if the transfer had an aggregate value of $600 or more provided that the transfer was made within 90 days from the date of the bankruptcy filing, and for any transfers made up to one year, if the person who received the transfer was an insider.

Here are a couple of examples of a fraudulent or irregular transfer:

Jane wanted to settle a debt before filing. She saved around $3,000 and was successful in negotiating with creditors to pay off one of her credit cards. Jane negotiated a settlement with blue credit company for $700 on October 30, 2017. She negotiated another settlement and paid red credit company $1,000 on November 1, 2017. After Jane negotiated successfully, with blue and red credit companies, she tried to negotiate with orange and green credit companies. She was unsuccessful. So Jane filed her bankruptcy without an attorney. Since she paid $700 to blue and $1,000 to red, her US Trustee avoided these transfers to get the money back. The trustee will allow all of Jane’s creditors to receive an equal share of the $1700 and prevent one particular creditor from benefiting more than the others. This is just one example. There are more.

The second section of the 90 day rule allows bankruptcy trustee to avoid any transfers of property made to any creditor that is also an insider (i.e., business partner, relative or friend) made between 90 days and one year of your bankruptcy filing date and exceeds and aggregate value of $600 or more.

In the next example, Steven bought his daughter Karen, a $15,000 car for graduating college. Steven paid $5,000 from funds he kept in his savings account and made the remainder of the purchase from a $10,000 line of credit on his credit card. On June 30, 2017, Steven transferred the title, over to his daughter.  In September of 2017, Steven lost his job. He was no longer able to make the remainder of Karen’s car payments. After four months without a job, Steven’s debt was piling up. So, in January 2018, Steven decided that he wanted to file chapter 7 bankruptcy to get a fresh financial start. If Steven were to file for bankruptcy before June 30, of 2018, there may be a good chance that the trustee would be able to avoid the car title transfer he made to his daughter, Karen. This would put the vehicle Steven just purchased for his daughter at risk. If Steven’s bankruptcy attorney knew of this transfer, the attorney would have warned Steven of the issues involving the purchase of Karen’s car prior to filing.

The fraudulent transfer rule involves all property, not just cash, and also applies to both chapters 7 and 13 bankruptcies. There are only a few exceptions. One, for example, is the exception for transfers made in the ordinary course of business, in other words, the property was sold to another (not an insider) for a fair and accurate value. But even so, bankruptcy can get complicated and for most folks, an attorney is usually needed to help out. Some people can’t imagine how to pay for a bankruptcy when they have no money. I’ll talk about that more, in my next article.

For now, if you’d like to set up an appointment to talk about affordability and your available options, call me. We can talk, face-to-face, and explore your options over a nice cup of coffee or tea.

The other day, a new client couple asked whether or not they should she use their tax return tax refund to pay down their credit card bills or use their tax refund to replace the roof on their home. Their roof needed repairing badly. Their credit card debt was very old. I cannot make that final decision for any of my clients, but I can advise them of their options. If you are in a position where you need to make important decisions like paying your credit card bills or paying for something extremely important, like a roof on your home, it may be a great idea to talk to a good attorney. Most give free first consultations.

If you are contemplating bankruptcy, and have some questions about a transfer you may have made or the 90 day rule, The Law Offices of Ginger B. Kelly is now accepting clients in the Sturbridge, Southbridge, Dudley, Webster, Oxford, Charlton, Auburn, Spencer, Brookfield, Warren and all of the Worcester County Area. We can explore whether or not bankruptcy is the easy way out or not.  We have a comfortable place to talk and a free pot of coffee waiting for you.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, Chapter 7, Choosing a lawyer, Collection, credit card debt, Debt, Debt Collection, Deficiency, Empowerment, Filing, Financial, Judgements, Law, Lawsuits, Massachusetts, Rhode Island, tax refund, tax return, Uncategorized

Bankruptcy Without My Spouse

Spouses

By Attorney Ginger Kelly, January 24, 2018

Bankruptcy is a great way to get a fresh start, but how will it affect your spouse if you want to file individually? Attorney Kelly investigates a few common questions about dealing with a bankruptcy when a spouse might be involved.

Am I required to file bankruptcy with my spouse?

The short answer to this question is no. If only one partner in a marriage owes debt, then only that partner should file for bankruptcy. Debts where spouses are joint and severally liable for payment will remain with the spouse who has not filed for bankruptcy. The exception is in states that follow community property law.  In community property states, single spouse bankruptcy for joint debts may in some situations be advantageous.

What happens to my credit or property if my spouse files bankruptcy?

As a general rule, one spouse filing for bankruptcy will not affect the other spouse’s credit rating or financial situation. Because a debt is a contract between a debtor and a creditor, each debtor must sign the contract to be liable for payment. The spouse not signing the contract would not be liable for the debt.  This is why the bankruptcy of one spouse doesn’t affect the other spouse or cause the other spouse to become bankrupt too.

What happens to joint debts when one spouse files for bankruptcy as an individual?

Under a Chapter 7 bankruptcy, when one spouse’s debts are discharged, or wiped clean, the creditor can go after the other spouse jointly responsible for the debt.  But, in a Chapter 13 bankruptcy, joint debtor spouses have a major advantage.  When the debtor spouse plans to re-pay his or her debts, over the time of the 3 or 5 year plan, the creditor will generally not bother the other spouse, as long as bankruptcy plan payments are deposited on time.

What are the exceptions?

There are some notable exceptions to co-debtor spouses when only one is filing for bankruptcy. For example, there is a possibility that the bankruptcy of one’s spouse may show up on the other’s credit report, but only if joint debt is involved.  If joint debt is involved, your bankruptcy may affect your spouse’s credit scores.  But not paying the debt will also affect your spouse’s credit scores. Another issue might involve applying for a joint loan in the future.  The bankruptcy of one spouse will affect the creditworthiness of both spouses applying for a loan jointly, or together.

Another exception deals with jointly held property. In a regular bankruptcy, the US Trustee may take non-exempt property and sell it to use it to pay creditors.  Even jointly held property can be taken if not exempted.  This is of vital importance in community property states, states where both spouses in a marriage own and are responsible for all the debt and property acquired during the marriage. The community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Massachusetts and Rhode Island are not community property states but rather, common law property states.

In common law property states, like Massachusetts and Rhode Island, your individual assets and your interest in any property you own jointly with your spouse (typically half unless otherwise noted) are considered part of your bankruptcy estate. In other words, they split the baby, so to speak. But your spouse’s half or portion is protected, generally. The property your spouse owns in his or her name alone is normally not at risk.

However, it is important to know that in Chapter 7 bankruptcy, the appointed US Trustee may be able to sell the entire jointly owned asset if you can’t exempt the value of your interest, provided that the property can’t be divided. If the trustee sells the property, he or she will pay your spouse the value of her interest and use your portion of the nonexempt proceeds to pay back your creditors. This is what I mean by “split the baby.” Keep this in mind.

What if my spouse gets calls and letters from my collection agencies?

Sometimes collection agencies will pursue both spouses even though only one spouse owes debt. If you feel that the calls and letters asking for payment are only meant for your spouse you can do something at this point. First, ask the collector to prove the debt by requesting proof of responsibility for those debts.  If the debt is solely to your spouse’s name, you can ask the collectors to stop calling you or sending you letters, but you must do this in writing (via letter).  If your spouse has already filed for bankruptcy, the collection agency can be stopped if his/her attorney would motion the court and ask to court to enforce the automatic stay.

Can I file for bankruptcy without my spouse knowing?

Yikes! Yes you can, but no don’t do it. Theoretically and in a legal sense, yes, you can file without your spouse knowing. However, because a Chapter 7 uses household income as part of the Means Test, you will need to report your spouse’s income. Also, in some extreme cases, some bankruptcy courts use income garnishment for debt repayment. Since you don’t want your spouse discovering their paychecks have been garnished, after the fact, it’s a really good idea to let them know from the beginning. Hiding bankruptcy is just a temporary solution, at best, and isn’t a good idea. Besides, secrets like this may wreak havoc on a marriage.

When do I need an attorney to file?

If you are considering bankruptcy, it always best to consult with a lawyer. A bankruptcy attorney will advise you to many things critical to your bankruptcy success. For example, fraudulent transfers come to mind.

Just the other day, while waiting for my client’s meeting of the creditors, I couldn’t help but to notice a pro-se debtor speak to the US Trustee at a subsequent meeting.  It’s an open floor.  Everyone can hear what’s going on.  This poor young man did not realize that he made a fraudulent transfer by giving a sum of cash money to his father within a certain period of time before he filed.  Not only can the US Trustee unwind transfers, quite often a discharge in matters like this are not permissible.  I felt sorry for that debtor.  He worked so hard to get to this point on his own, only to be met with a very unsettling outcome.  This is why most debtors need a good bankruptcy attorney.

A bankruptcy attorney will advise you as to whether bankruptcy is your best course of action, based on your situation. Also, your attorney can advise you as to whether or not your spouse will be affected if you file or whether or not they should file with you.

Filing for bankruptcy is a great way to get a fresh start, but it may affect your spouse if they aren’t filing with you. Find out more about joint debt, keeping your spouse’s property and more by contacting a skilled bankruptcy attorney in your local area.

The Law Office of Ginger B. Kelly is a boutique type law firm located in central Massachusetts. We are not Big Law.  We only handle a small number of clients at one time.  Each client gets personal attention and care.  Each client gets hours and hours of time devoted to their particular case. Our office is in an easy to find location in Charlton. This means you don’t have to drive to the big city of Worcester or Boston and pay for parking. We not only offer free parking, but free coffee in a calm and peaceful place. Your discussion with our senior attorney is very confidential. Your first consultations will last about an hour in a stress-free, homey type atmosphere.

As one client put it, “This is like an old fashioned law office, very comfortable.”

Book your appointment now to explore your best options for this New Year.  We’ll have a nice pot of coffee waiting for you when you visit.

Also, keep in mind that it’s tax return season. Many people use their tax refunds to help pay for their bankruptcy.  There is no better time than now (tax refund season) to talk for free and find out more about ways you might be able to get the bankruptcy that you need now.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We cannot stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2018 by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, Chapter 7, Collection, credit card debt, Debt, Debt Collection, Filing, Financial, Financial Planning, Joint Property, Law, Massachusetts, Mortgages, Spouse, tax refund, tax return, Uncategorized

What to do when your car isn’t worth the loan payments

Auto loan and credit card debt

By Attorney Ginger Kelly, December 15, 2017

I’m seeing it over and over again with folks in our Central Massachusetts area.  Car loans are so expensive and cars lose their value so quickly, it is causing harm to consumers.  As soon as the loan papers are signed, folks are strapped to payments they can’t afford.  It’s a shame and it makes me mad, the same kind of mad I get when I see what payday lenders can do to hard working families.

One person I know (I won’t mention her name), who earns less than $1200 per month in Social Security Disability Income went to a dealer to get a car loan on a new car.  She pays over seven hundred dollars a month for rent, yet the dealer down the street gave her a car loan.  Her car loan payments were over $400 per month.  What’s going on here?  This is robbery, in my opinion.

Another client I had a long time ago, purchased a new car for well over twenty two thousand dollars.  Less than a year later, she lost her job.  She could no longer afford her monthly car payments.  She had to do something so she tried to negotiate a modification of her loan.  Without her good paying job, the lender said no.  To keep her home, she lost her car and surrendered it moments before it was repossessed.  Then, the dealer auctioned the car to pay the loan.  The car brought in only a few thousand dollars at auction.  The outstanding balance she owed to her lender was well over twelve thousand dollars.  How does a brand new car loose over ten thousand dollars in value in less than a year?  The car had very little miles and was in almost perfect condition.  I don’t understand it.  This client was compelled to file a Chapter 7 to keep a lien from being placed on her home.  This is how it goes.  It’s sad but true.

Another couple purchased a vehicle in 2011.  The vehicle cost was over twenty thousand dollars.  They successfully made payments for over four years. Then, the wife got sick and couldn’t work.  This caused the couple to lose over half of their income.  They decided to downsize and only drive one car to save money.  They surrendered the car to the lender.  The lender, in turn, sold the car and then charged this couple with a fifteen thousand dollar deficiency on the loan.  This amazing couple, going through some very difficult medical issues, could not pay the deficiency.  They were barely making their mortgage payments. Eventually, the lender took them to court. The lender got a judgment lien against the only asset they had, their home. The couple was devastated. This is why they came to me for help.

My husband was talking to a colleague at work, just today, who asked him why he drives a used car. My husband replied, “Why would I want a new car that’s 50% discounted as soon as I drive it home and if something happens to me and I can’t pay for it, the car gets repossessed and I won’t be able to pay the amount the lender will charge me after the car is surrendered.” He added, “My wife deals with this all the time. She sees people suffering in this type of situation. Why would I put my own finances in jeopardy just to drive a fancy new car?”  My husband said it bluntly and truthfully.

Frankly, I’m baffled at the inflated prices of vehicles these days. I’m astonished at the shady things that seem to be happening to consumers who need to drive to work and school.  What is going on in the lending and auto industry?  Who doesn’t need a car these days?  Maybe this is part of the problem. Consumers need reliable cars, so they do whatever they think is best to get one.  But there is hope.

Several of my clients have had to think about debt consolidation or even try this until they consulted with me and discussed the differences between Chapter 7 and Chapter 13 bankruptcy and how this works.

Basically, a Chapter 7 is a total liquidation of all of your debts and a way to get a fresh start for most debt, but a person has to qualify first.  A Chapter 13 is a way to manage your debts by way of a three or five year payment plan.  In a Chapter 13, a debtor pays into this plan and then, after the end of the three or five years, comes out with a fresh start.  Bankruptcy is not for everyone, but it may be the only way to get rid of these not only annoying, but quite often unconscionable auto loan deficiencies.  For some people it’s the only way to stop creditors from placing liens on things like other cars and homes after they had to surrender their car or have it repossessed for one reason or another.

Bankruptcy, for some, is an option worth exploring.  Most Bankruptcy cases will cost anywhere from zero dollars (for qualifying pro bono cases) up to four or five thousand dollars, for some Chapter 13 cases and anywhere in between.  Attorneys cannot tell a client how much a bankruptcy case will cost until they have the opportunity to evaluate the work involved, the type of Bankruptcy needed, the complication of assets and debt and other factors.  But the good thing is, most bankruptcy attorneys offer a free first consultation for most clients.  If they don’t, I suggest that you think about visiting a bankruptcy attorney who does.

The next question my clients ask, I’ll touch briefly upon.  How does someone pay for a Bankruptcy if they don’t have any money?  Well, it’s not easy but it’s do-able.  Some clients sell collections or other things to find the money.  Most clients use tax return refunds to pay for their new start in life.  This is a very good option, indeed.  Still others borrow the money from friends or relatives (I do not suggest that you do this, however, sometimes it’s done anyway).  They ask relatives or friends to help out with a gift.  Christmas temp jobs are wonderful for helping out in a pinch.  Most of the time, where there is a will there is a way.  People find ways to pay for their bankruptcy and are happy to do so.

Tax season is right around the corner.  If you are thinking about whether or not to fix the roof of your home or pay your credit card debt, you might want to consult with a bankruptcy attorney.  If your car payments are too much of a burden for you and you are thinking of surrendering your car, you might want to consult with a bankruptcy attorney.  These are the real issues to consider in this coming tax filing season. Your next tax refund may be the way you too can enjoy a new lease on life and not to be bothered by the heavy burden of bills you cannot pay.

The Law Office of Ginger B. Kelly is a boutique type law firm.  We are not Big Law.  We only handle a small number of clients at one time.  Each client gets personal attention and care.  Each client gets hours and hours of time devoted to their particular case. Our office is in an easy to find location in Charlton. This means you don’t have to drive to the big city of Worcester or Boston and pay for parking. We not only offer free parking, but free coffee in a calm and peaceful place. Your discussion with our senior attorney is very confidential. Your first consultations will last about an hour in a stress-free, homey type atmosphere.

If you want to try a lawyer who is different, a new type of lawyer, Attorney Kelly is the one. Attorney Kelly is a lawyer who is interested in cultivating a more peaceful, kind and gentler approach to law. Her practice is unique. Her zealous advocacy is tempered by her high ethical standards. Her love for people provides the foundation for her attentive personal service. As one client put it, “This is like an old fashioned law office, very comfortable.”

Book your appointment now and explore your best options for the New Year.  We’ll have a nice pot of coffee waiting for you when you visit.

Good luck and have the Happiest of Holidays!

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.
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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We can not stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2017 by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Auto Loans, Bankruptcy, Chapter 7, Choosing a lawyer, Collection, credit card debt, Debt, Debt Collection, Deficiency, Hiring Counsel, Judgements, Law, Lawsuits, Legal, Liens, Massachusetts, practical stuff, Repossession, Rhode Island, tax refund, tax return, Uncategorized

Student Loan Debt and What to Do about it

Oh the places youd go if you weren't riddled with student loan debt

By, Attorney Ginger Kelly, November 9, 2017

According to US News, about half of all Massachusetts workers have some sort of bachelor’s degree.  That means high rates of student debt plague our state. But even worse, according to the Boston Globe, over 50% of college students in Boston drop out of college. That leaves even more people strapped by student loan debt without a degree.

When the national average for student loan debt almost reaches the $38,000 mark, it’s no wonder why student debt is becoming truly a national crisis. But where there’s a will, there’s a way. For some college grads, the best strategy is to be aggressive with paying back student loans.

For one college grad, Meghan from Boston, who paid  back her student debt within five years, it was all about prioritizing. “It’s possible if you want it badly enough,” she said. Meghan itemized her debt wish list and named her reasons for wanting to be debt free. Writing down your reasons helps to keep you on your journey. Being able to refer back to those reasons helps to overcome challenges and to remember why you’re making sacrifices.

Another college grad, Jason, felt overwhelmed while trying to pay the minimum on his $45,000 student loans.  So he took a different path and got serious about paying down his student debt. He reviewed every portion of his bank account, tightened spending, worked two jobs, and established a “done with debt” deadline. This helped Jason pay off his student loan debt in less than a year. Jason said that he kept spending very low and worked hard at his corporate job and also side job to pay off debt.

Aggressive payment plans are fine for some, but for those with small children and other priorities, aggressively paying off student loan debt is not always practical or attainable. Never the less, a few tips for grads may be helpful, while keeping in mind that every situation is quite different.

Start saving during the grace period: Use the grace period to review repayment options and figure out what is most affordable for your situation.

Choose a short repayment plan: Try to choose the shortest repayment plan you can afford, if you can do this without eating cat food and borrowing your sister’s car constantly. Although extended payment plans have lower monthly payments, the total interest will more than double for doubling the time.

Pay off expensive loans first, with one caveat: Some financial gurus believe that prioritizing paying off loans with the highest interest rate first is a good idea. But because not all situations are the same, this may not be the best strategy for getting out of debt quickly. Each situation is different. More on this to follow.

Trade your service for your debt: Certain programs, such as AmeriCorps, erase part or even all of a federal student loan. A year of service at AmeriCorps can pay for around $5,645 of your loan. Honestly, I know of no one who paid off their student loans by volunteering in AmeriCorps, but it’s an idea that’s out there.

Keep close contact with your lender: Be sure to tell your lender if you plan on moving or changing your phone number or email address. If they need to contact you but you are unavailable, this could add to your costs. Running the risk of missing payments or other important information is not an option.

Enroll in an ACH direct payment withdrawal option: Enrolling in ACH direct payment withdrawals will not only keep you from missing your payments, it allows for a .25% interest reduction rate for all federal loans and most private loans.

Those are the tips most financial gurus tell us.  However, most folks aren’t going to pay off their student debt by volunteering in AmeriCorps. But it’s an option. Most folks don’t work for in a low paying public service job, nor do they want to. Public service is only an option, not the only path.

Most people, graduates especially, have different types of debt and families with children. People in this category may choose to reduce or pay off their overall debt and just pay the minimum on lower-interest student loan debt until it makes sense to pay this off with a more aggressive student loan payment plan in the future.

*More about paying off expensive loans first: Although this makes perfectly good sense in some situations, the reality of life is that this is not always the best plan. Alternatively, it’s may be a better idea to lower your debt using a different strategy, like zero interest transfer options.

To start on the path to a zero interest transfer option, begin by paying down higher balance debt first and watch your credit scores climb. Then, find one or two zero interest transfer options to get rid of expensive debt and provide more time to pay off overall debt. For a little more in-depth discussion about balance transfer options read,  “When balance transfers make good sense” by Attorney Ginger Kelly.

But it’s not always all about paying down student loans; becoming debt free and more comfortable in your own financial shoes is really about analyzing the total debt you have and working a strategy that makes good sense from a credit bureau point of view.

Total debt to income is what really hurts a person’s ability to feel more confident, secure and to enjoy life a little better. If you want to make a change for the better, maybe get out of your parent’s basement quicker, work on your student loans after trying these strategies. Notice, I did not say simple strategies. They aren’t simple and take time. So be patient. Patience is a virtue, so they say.

1. Lower your total debt to credit ratio: Prioritize personal and consumer loans (like credit cards) to lower your total percent of used to unused credit and really make your credit scores soar. Doing this will lower your total debt to available credit ratio. Having higher percentages of unused credit for all your debt will lower your debt threshold and increase your credit scores. Higher credit scores are what you need to get lower high interest rates or no interest credit card introductory rates with low fee balance transfer options. This plan is not instantaneous (like most good things), but over a year or less many college grads, and people in general, can increase their credit scores 50 to 100 points or more. But wait. Besting your best credit scores isn’t all there is to it.

2. Don’t close old credit card accounts. Then, never ever close old credit card accounts. Keep them, at least for a long while until your 100% confident it makes no sense to have better credit scores. Closing old accounts will damage your credit scores. Damaging credit scores while paying off debt can take you back to square one. Keep old credit cards and move on to the next step.

3. Find zero or low interest balance transfer cards, and use them. With a credit score of 700 or better, don’t run out and finance a new car but rather, find the best lower interest or no interest balance transfer cards by looking, very hard, online. Do the research and find the best deals and then transfer balances from higher interest credit cards to lower or zero balance cards.

Many times, frugal websites like Andy Prescot’s “The Art of Being Cheep”
help with the initial research. Nerdwallet.com and MagnifyMoney.com are also helpful websites. Magnify Money has a great chart on the best balance transfer credit cards and an idea of what kind of credit scores you need to get them.

4. Use the zero balance time to aggressively pay down all revolving debt. With a zero or low interest credit card introductory rate, take this time to aggressively pay down all your credit cards. This will help your credit to grow.

5. Now it’s time to say good bye to student loans. At this point, with better than average credit scores, you have placed yourself in the best position possible to become more pro-active regarding paying down student loan debt. Student debt tends to be the lowest interest debt most people have. So why not make the most of the bargain and aggressively pay down this type of debt last and not first. Manage your debt before you debt manages you.

If there is no way to pay down your debt or debt is managing you, or even killing you, talk to a good consumer debt lawyer or bankruptcy lawyer immediately. Sometimes, they can advise you on which debt to pay first or not and whether or not bankruptcy is an option to explore. Most offer free first consultations.

My advice to people is to find at least three lawyers who offer free first consultations. Visit all three and compare. Pick the lawyer that makes the best sense to you, one that you can talk to, and then stick with that lawyer. Not all lawyers are perfect, remember this. But finding a good adviser who can help you manage your finances and deal with overwhelming consumer and student loan debt is like finding gold when you least expect it.
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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, http://www.attorneykelly.com or call us at (508) 784-1444.
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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We can not stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2017 by Ginger B. Kelly, Esq., all rights reserved.

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Filed under balance transfers, Bankruptcy, credit card debt, Debt, Empowerment, Financial, Financial Planning, Massachusetts, practical stuff, Student Loan Debt, Trending, Uncategorized

Defending Debt Collections in Court: 6 Amazing Ways to Score Big Time

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Defending Debt Collections in Court: 6 Amazing Ways to Score Big Time

By Attorney Ginger Kelly
October 5, 2017

The New York Times ran a story in 2012 about the outpouring of credit card debt lawsuits being filed. They compared this widespread outbreak to the “robo-signing” fiasco which plagued the mortgage industry in years past. Now it seems the debt collection industry has taken up “robo-lawsuits” and are filing thousands of lawsuits a day all across America, including Massachusetts and Rhode Island. Lawsuits are being filed with the expectation that 99% of all defendants will not answer. In 2017, this is still a big problem.

Lots of people people being taken to court by debt collectors and lenders, many of them don’t owe a dime.  This is the new trend, plaguing thousands upon thousands of consumers in America today.

The biggest problem with these debt collection lawsuits is that about 90% of them are flawed. Debt collectors cannot prove that they are the ones owed the money.  They cannot prove how much money is owed, if any.  This is where consumers must take charge. Knowledge is power. Knowing things the debt collectors wish you didn’t know will often place you in the driver’s seat when it comes to Debt Collection law suits.

1. Start at the Beginning, Answer the Lawsuit.

If a debt collector files a lawsuit against you to collect a debt, you will receive a summons (typically in the mail). Many people ignore these types of summons, because they look like ordinary mail. Within the summons is a complaint. The complaint has a date to respond and instructions on how to file an answer.  Take note of the instructions and, if you like, look for a form to respond to the complaint.  In Massachusetts, Mass.gov has forms that can help you in small claims or in district court.  These forms can be easily filled out. You must remember to respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers. This will preserve your rights in court. It’s simple and doing maintains your right to challenge the debt in court.

Even if you owe this debt, a two-sentence response denying liability to the lawsuit filed in court will suffice. When you do this, chances are your law suit will likely lead to a negotiated settlement. This will save you money in the long run, because most of the time the debt amount is inaccurate. The number one mistake people make when they are sued is failing to respond to the notice in the complaint.

In your answer, you can simply Admit, Deny or express Lack of Knowledge to each statement made by the plaintiff debt collector. Of course you don’t admit to any statement unless you know it’s 100% true, so be honest. Don’t guess. If you don’t know whether or not, for example, the account number listed is your credit card number, or the debt amount is actually the amount of money owed, deny the claim. The same is true for all the allegations. If you do not understand what the plaintiff is saying, you should say, Lack of Knowledge. Lack of Knowledge simply means you don’t know whether that statement is true or not. Then, take your answer to the clerk of court and file it. Mail a copy to the other side. Ask the clerk the proper procedure for making copies and mailing.  Better yet, don’t bother taking chances or taking the day off from work to file papers with the clerk, talk to your lawyer and bring in the big guns to fight this for you. Pay your attorney to hassle with the paperwork.

Even if you don’t have an attorney, don’t be shy or embarrassed. Filing an answer doesn’t mean you want to avoid paying your debts. It only means you are a smart consumer. It means that you want the debt collector to do his job and prove their allegations against you. In any business transaction, it is always best to be sure that you actually owe the correct amount before paying it. The same applies to debt collection law suits. This is why you file a simple answer.

2. Find Out Who, Exactly, Owns the Right to Take You to Court

The collection agency must prove they have the right to collect this debt, if you ask them. This is their job. Make them work. All collection agencies have a duty to provide good evidence of a transfer of the signed credit card agreement, but only if you ask. If you don’t ask, they have no duty. So, if you ask and the other side does not produce paperwork, you you don’t understand it, ask the magistrate or the judge to dismiss the case.  When the plaintiff does not have the “chain of custody” paperwork giving them the right to collect this debt from you, they lose.

It’s rather enjoyable when a judge or magistrate takes a good look at the chain of custody paperwork many debt collectors provide. Some of them shake their head. Then, they dismiss the case. It’s that simple.

Mass Legal Help is a great website that gives examples of how to answer and challenge a debt collections law suit in a simple and complete manner.

3. Make the Debt Collector Prove the Amount Owed, Why Not?

This is a good one. In most debt collection law suits, there are so many charges upon charges, and fees no one understands, it’s not funny. Make the debt collection agency prove the amount owed by simply asking them to provide the original signed agreement and a balance on the account from zero to the present. If they can’t prove what you owe, the judge will not be able to make a ruling and will dismiss the case.  If they hand you a huge stack of paper, don’t feel threatened.  Either ask for them to show you what the papers mean, or ask for a continuance so you can examine the documents.

I talk a little bit more about this in my article, Debt Collection and 7 Deadly Sins. Take a quick look at point 3. Greed. This may help you.

4. Use the Statute of Limitations, Like a Boss

State law provides that debt collectors have a maximum amount of years they can legally sue you for debt they think you owe. This is different than collections.

A debt collector can bill you forever, but a debt collector cannot sue you in court to collect beyond the statute of limitations period. But again, a person needs to use this as a defense in court for it to be effective. When that statute of limitations period expires, the debt collector will lose if you defend using the statute of limitations. Use this as a defense and get your lawsuit dismissed. If it applies, it works!

Currently, the statute of limitations for almost any type of consumer debt in Massachusetts is six (6) years (MGL Chapter 260 Sec. 2)  In Rhode Island, it’s different.  Under Title 9, in Rhode Island, the statute of limitations for contracts and open accounts (credit cards), is ten (10) Years.  (RIGL 9-1-13(a))

In legal terms, a debt that has exceeded the statute of limitations is also called a “time barred” debt. When, exactly, the statute begins (or begins to toll), is different for different debt and for different state laws.  For credit card debt, typically the statute begins to toll from the date you made your last payment. You can find more info on Time barred debt defenses in Massachusetts in the online Mass law library.

There may be other legal arguments about the statute of limitations, like the conflict of laws and the significant relationships test. But essentially, the statute of limitations for most debt in Massachusetts is six years from the date of the debtor’s last transaction, or payment, on the account. Ask your attorney, if you have any questions and want to know if this statute applies in your case.

5. Sue the Debt Collector, Big Time

If a debt collector has violated any part of the Fair Debt Collection Practices Act (FDCPA), you may be able to sue them and could get a money damage award.  Consumers can successfully sue for violations of the debt collections practices act and are entitled to statutory damages of $1,000, plus punitive and economic damages.

This is where debt collection law suits can be actually quite enjoyable, for me anyway.  For you, maybe not so much.  As a lawyer, this is what I’ve been trained to do.

There’s nothing wrong with finding violations. Holding debt collectors to the higher standard they are called to perform is the right thing to do. Holding their feet to the fire, so to speak, is what’s best for consumers. This is why it’s not a bad idea to hire a lawyer to file a well-drafted answer to the complaint and attend court with you.

6. Explore Bankruptcy, the Fresh Start Option

If the debt you have is more than you can manage or the debt you are being sued for is large, it may make good sense to talk to an attorney. A good bankruptcy attorney will help you discover whether or not filing for bankruptcy is an option for you.

Filing for bankruptcy will keep you protected by the automatic stay, which will halt any and all debt collection efforts being made against you. If you are thinking about filing bankruptcy, talk to an attorney quickly. Don’t wait until the day before you are supposed to be in court. Lawyers can’t typically file bankruptcy paperwork the next day. That’s not how bankruptcies work. Bankruptcies are very paper-work intensive and tedious. To find out more read Bankruptcy, the Easy Way Out, Really? 

While it is possible to successfully defend a debt collection lawsuit, it’s often very difficult and emotionally charged. If the debt collection agency is successful in court, they can get a judgment entered against you. This, in turn, would allow the collection agency to garnish your wages or even go after your bank accounts or place liens on your home, vehicles or other property.

I tell all my clients that debt collection law suits are like traffic tickets. It never pays to ignore them. Reply to the summons. Go to court. What do you have to lose? But better than just “winging-it,” speak to a good bankruptcy and debtor defense lawyer first. Some law offices like ours, offer a free first consultation. When you hire a good debtor defense lawyer to help, there are virtually a hundred or more different defenses that can be used to protect you against garnishments and attachments.

Currently, we are taking defendant clients for debt collection law suits. Our first consultation is free. I’m always happy to meet new clients and am willing to work around your schedule. Exploring your best options with an experienced attorney can’t get much easier. This is only one way we are transforming the way people do business with lawyers.

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ABOUT ME: Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture. To find out more, visit, www.attorneykelly.com or call us at (508) 784-1444.

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NOTICE: This is an Advertisement. This post is not legal advice. Consult your attorney. Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet. Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other. We can not stress enough, if you need personal legal advice, always see your attorney. Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice. Seek legal advice and representation from your own personal attorney.

Copyright © 2017 by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, credit card debt, Debt, Debt Collection, Financial, Foreclosure, Hiring Counsel, Law, Lawsuits, Legal, Massachusetts, Massachusetts law, practical stuff, Rhode Island, Student Loan Debt, Trending, Uncategorized

Tricky Short Sale Deficiency Judgments

Short Sale KeysTricky Short Sale Deficiency Judgments

By Attorney Ginger Kelly

Agreeing to a short sale may seem like the best way to avoid foreclosure in many situations, but what happens to the money owed, after the short sale?

Quite often homeowners think short sales are the perfect solution to a difficult situation, the silver bullet, so to speak. The bank agrees to accept a sale price for less than the mortgage amount and presto, foreclosure averted!  But the problem with this is, a year or so after a short sale is completed, the mortgage lender can (and often will) seek a deficiency judgment against the former homeowner.

What is a Short Sale?

A short sale is when you sell your home for less than the total debt balance remaining on the mortgage. The sale price is “short” of the full debt amount. The short sale process involves the mortgage lender agreeing to accept the sale proceeds and release the lien on the property and then, the proceeds of the sale pay off a portion of the mortgage balance. Short sales are one way for borrowers to avoid foreclosure.

What is a Deficiency Judgment?

A deficiency is when a foreclosure sale doesn’t produce enough funds to pay the mortgage debt in full. The amount of the deficiency is the difference between the amount of the mortgage debt and the foreclosure sale price. A deficiency judgment is a judgment that the lender may obtain from a Judge, giving the lender the right to collect the deficiency from the borrower.

In a short sale situation, for example, if a homeowner sells their home in a short sale for $200,000, and the amount owed on the mortgage was $250,000, then $50,000 would be the deficiency amount. The lender could get a judgment from a Court Judge for the amount left owing and then some. This includes not only the $50,000 deficiency, but interest, other costs and sometimes attorney’s fees.

Deficiency Judgments in Massachusetts and Why are They So “Tricky?” 

Massachusetts is one of those states where a lender is permitted to seek a personal judgment against a borrower after a short sale to recover the deficiency amount. The tricky part comes in when, in general, once the lender gets a deficiency judgment against a borrower, the lender may collect this amount by using things such as a wage garnishment, bank account levy or by placing liens on titled property, like automobiles and motorcycles.

In Massachusetts, after a short sale, the lender can choose to do one of the following two things about the deficiency:

  1. The lender may choose to forgive the deficiency amount and issue to the borrower a Form 1099-C (Cancellation of Debt), which reports the deficiency as taxable income to the IRS. If this happens, the borrower (former homeowner) will have to pay taxes on the additional income this brings in the year they receive the 1099-C.  For most people, who were struggling to pay their mortgage, this causes tremendous hardship.
  2. The lender may choose not to forgive that part of the debt that has not been covered by the sales price and keep the right to file a court action to obtain a deficiency judgment.

If you are a homeowner and are thinking about negotiating a short sale with your mortgage lender in Massachusetts, it is very important to negotiate with your lender before you agree to a sale, to have the deficiency forgiven.

How Can I Avoid a Deficiency Judgment Following a Short Sale?

There are at least four ways to avoid having to pay back the deficiency.

  1. Negotiate a Waiver of the Lender’s Right to Seek a Deficiency Judgment

When a homeowner finds it necessary to sell their home in a short sale, it is important to try to negotiate with the mortgage lender and ask them to approve not only the short sale, but to a waiver of the right to seek a deficiency judgment. If your lender agrees, this provision must be included in the short sale agreement.  That means, always get the waiver in writing.  The short sale agreement must expressly state that the transaction is in full satisfaction of the debt and/or that the lender waives its right to the deficiency.

  1. Make a Settlement Offer

The second option homeowners have is, if the mortgage lender does not agree to waive the deficiency, the homeowner can offer to settle the deficiency for a smaller amount. Many lenders agree to accept a smaller amount because collecting a deficiency is expensive and typically takes a long period of time.  It’s easier for lenders to accept a reduced lump sum, rather than going through the expensive and lengthy legal process to try to collect.  A homeowner can also negotiate to repay the reduced deficiency debt in installments, over time.

  1. Hope the Lender Won’t Sue for the Deficiency

If the homeowner was not successful in negotiating a waiver of deficiency or a reduced deficiency payment plan, the mortgage lender will likely call and send collection letters stating that the deficiency amount is owed. Collection letters typically come from a lawyer’s office or a collection agency.  However, without taking the homeowner (borrower) to court and getting an actual deficiency judgment, the lender cannot levy any bank accounts, garnish wages, or place judgment liens on other property the borrower may own.

To get a deficiency judgment, the lender must file an expensive lawsuit. Many borrowers, who are forced to complete a short sale of their homes to avoid a foreclosure, are judgment proof.  This means that they don’t have much money, wages or other property (assets) that a creditor can take to pay off the judgment. If a borrower can’t afford to pay the deficiency, there is a possibility that a mortgage lender won’t even bother filing a lawsuit against them.

  1. Declare Bankruptcy

The other possibility is to file for bankruptcy to eliminate the debt.  A Chapter 7 bankruptcy would totally discharge the deficiency relieving the borrower of the entire debt. A Chapter 13 bankruptcy will require a payment plan for 3 or 5 years to pay a portion of the total amount owed. Bankruptcy may also be the most pro-active way to alleviate the tax problem before the lender issues a 1099-C.  Income taxes are not typically discharged in Bankruptcy unless they are very old and a borrower can’t retroactively discharge a recent 1099-C tax debt.

On the other hand, if taxes or the deficiency are all the borrower owes, bankruptcy may not be the best option.  However, Bankruptcy may be something to consider when the borrower is facing a lot of debt they can’t pay, or when a borrower needs to eliminate the possibility facing a tax burden they simply can not afford to pay in the future.  To find out more about whether or not Bankruptcy is really the easy way out, click here.

September 14, 2017

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2017, by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, Chapter 7, Debt, Debt Collection, Deficiency Debt, Financial, Financial Planning, Foreclosure, Law, Lawsuits, Legal, Massachusetts, Massachusetts law, Mortgages, practical stuff, Short Sale, Uncategorized

Auto Loans and Chapter 7 Bankruptcy

Auto Loans after Bankruptcy

Auto Loans and Chapter 7 Bankruptcy

By Attorney Ginger Kelly

Going through a bankruptcy can be a stressful experience. And it can get even more stressful if you suddenly need to finance a car.

Clients often ask, “If I file for a Chapter 7 Bankruptcy, can I get a car loan?”

My response is this:  “Well yes, and no.”  Then, I typically say, “Let me explain; yes, you can typically get a car loan after your debts have been discharged under a Chapter 7 liquidation bankruptcy, but your chances of getting a car loan approved is far less before you receive the final discharge disposition.

More about this…

Auto Loans and Chapter 7 Bankruptcy Filing and Discharge

The first thing to know is that a Chapter 7 Bankruptcy Filing is the first thing filed at the beginning of a Chapter 7 Bankruptcy.  The Discharge is the final disposition of the bankruptcy judge.  In other words, the Discharge is typically the last thing.

If you need a car loan, it’s better to wait until your Chapter 7 bankruptcy has been discharged before you apply.  Don’t apply for a loan after a Chapter 7 has been filed.  Wait.  A Chapter 7 bankruptcy is typically discharged around 60 to 75 days after the meeting of the creditors, also known as the 341 meeting. The meeting of the creditors typically happens 30 days after your bankruptcy petition is filed. A good bankruptcy attorney will explain this before you decide to file.  Find out more about whether or not bankruptcy may be right for you by reading, “Bankruptcy, the Easy Way Out. Really?”

Technically, you can apply for a car loan after the meeting of the creditors, but it’s very difficult to get this type of loan before the final discharge.  Almost no lenders and very few subprime lenders loan money to anyone in the midst of a Chapter 7 bankruptcy.

Lenders do not want to give loans to people with open Chapter 7 bankruptcies because of the risk factor involved.  If a new debt was discharged, in the Chapter 7 liquidation process, the lender would lose out big time. Therefore, rather than placing themselves at such great risk, most lenders simply choose not to lend money for any reason, if you’ve filed but not received a final discharge.

Because lenders, including most subprime lenders, will not loan money without a final bankruptcy discharge, it’s best to wait until after the discharge to apply for an auto loan.

Car Loan Approval Post Chapter 7 Bankruptcy Discharge

While credit scores take a big hit after a Chapter 7 bankruptcy discharge, the discharge still offers the best option for a fresh start and a brand new financial beginning.  Most people in financial trouble are unable to rebuild their credit without filing for a Chapter 7 bankruptcy and typically take longer than the 10 years to rebuild.  After 10 years a Chapter 7 bankruptcy is removed from a credit report. This is why most chances are better for getting approved for a car loan after filing any Chapter 7 and receiving a discharge, rather than not filing for bankruptcy at all.

The essential step for getting credit, post-discharge or after the Chapter 7 bankruptcy final disposition, is working with a trustworthy car dealership who knows your situation and a variety of subprime lenders.  Only a few car dealers work with subprime lenders, others do not.  When dealers work only with traditional banks, most people with a Chapter 7 discharge will not get a car loan approved. When the dealer works with a variety of subprime lenders, chances for loan approval are greater. It’s really that simple.

This is why knowing your dealer is important as well as being careful not to get that hard inquiry on your credit report until you are relatively sure you will be approved. Having a hard inquiry “hit” on your credit report only complicates things. You can read more about this in my article, When Balance Transfers Make Good Sense. Unless there is a good chance you will be approved and you are willing to accept the terms of the loan, don’t bother applying for that car loan.  If all the cards are in line and you’ve received your discharge, go for it. Chances are better you will get approved.

August 14, 2017

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2017, by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Auto Loans, Bankruptcy, Chapter 7, Debt, Financial, Financial Planning, Law, Legal, Massachusetts, Massachusetts law, practical stuff, Uncategorized

When Balance Transfers Make Good Sense

farmers market 2

Last week, while at a Farmer’s Market, I met an old friend.  Instead of chatting about the price of carrots and cookies, we began talking about finances. I listened to her talk about the worries of being a social worker and how she was struggling with her six figure debt while surviving on her very small salary.  I asked her if she had credit card debt. She said, “Yes.” “And how’s your credit score?” I continued. “I think it’s pretty good, last time I checked,” she said. I then asked her, “Have you ever considered a balance transfer?” She didn’t say anything for a moment. She was thinking. Then she asked, “What’s a balance transfer?”

Do the Math

 Let’s make it simple. A balance transfer is moving debt from Bank A to Bank B in order to take advantage of a reduced or zero interest rate. Let’s use a hypothetical to illustrate. Let’s say that a person named Jane has $10,000 of credit card debt. Jane’s interest rate is 20% with Blue Bank.  Jane also has a good credit score of 700, and she makes payments to her Blue Bank card of $300 per month.

Jane is paying $3,600 a year.  Over the next 12 months, she is paying $1,845 of that $3,600.00, in interest. If Jane decides to take advantage of a balance transfer offer, she can move her debt to another bank and reduce her interest rate.  Jane looks around for offers.

To entice Jane, Yellow Bank offers a great interest rate or a no interest rate for a set period of time, which could be 6 months to 18 months. Yellow Bank wants Jane’s debt and hopes that if she opens a new credit card account; Jane will keep spending, pay later or do both. But even more, Yellow Bank hopes that Jane still has a balance to pay off at the end of the low-interest balance transfer period. This will give Yellow Bank more return on their risk because Jane will be paying higher interest rates.

Hypothetically, let’s say Jane decides to transfer her Blue Bank balance to Yellow Bank. This sort of transfer happens between two banks, not two bank accounts at the same bank.  If Jane moves her Blue Bank card debt to a Yellow Bank card with zero percent interest, she will be able to apply all her payment each month toward her principal.

According to MagnifyMoney’s tool, one balance transfer could save Jane $3,675. With multiple balance transfers, (giving Jane more time to pay off the balance) Jane may be able to save as much as $4,118.

But that’s not all.  There are fees and don’t forget the tricky introductory periods. Jane may have had to pay up to 5% to transfer her balance over from Blue Bank to Yellow Bank, which is $183.75.  But if you subtract the balance transfer fee from the interest Jane would have paid, Jane will still save about $3,491. Not too shabby.

Tricky Balance Transfer Fees and Introductory Periods

On the surface, a balance transfer looks straightforward, but make sure the balance transfer is truly worth it.  Balance transfer fees typically are 3%, 4% or even 5%.

According to UK market at researchers Consumer Intelligence, research indicates that 20% of consumers who transfer card balances, to get a better rate, never pay down their debt.  40% make late making monthly payments, 21% missed payments entirely, 10% pay less than intended and 23% have no idea why they suddenly were being charged interest.  A whopping 34% never pay their balances down before they are charged interest, something to keep in mind.  It happens to the best of us.

It’s OK to be somewhat concerned about the introductory period.  But don’t fret too much about being victimized by a “bait and switch” type banking scheme. The Credit Card Accountability Responsibility and Disclosure Act of 2009 stops banks from luring customers into a balance transfer and then drastically increasing the interest rate months later. Once you agree to a balance transfer at a set interest rate and period, you’re guaranteed the rate as long as you follow the rules. Banks can only cancel your promotional rate if you’re 60 days late with payments. Don’t be late, a cardinal rule.

Some cards have zero balance transfer fees and zero interest introductory rate offers.  Look for these. However, these are typically available to people with really good credit scores. We’ll talk a little bit about credit scores, in a moment.

In Jane’s hypothetical situation, if she does nothing, she pays $4,718 in interest over 50 months until the debt is paid off.  If she transfer’s once, she pays $1,043 in interest (at 1.7%) and fees over 37 months until the debt is paid off.  If Jane transfers her debt multiple times, she will likely pay less in interest and fees over 36 months until her debt is paid off. More often than not, for users with good credit scores, lower “promotional” interest rates more than make up for the fees spent on transfers.

Messing Up Good Credit Scores

Credit scores often drop, depending upon how a balance transfer is accomplished.  First, any hard credit inquiry when opening an account is a bad mark on a credit score.  But how bad is that bad mark?  It depends.

According to Quizzle, a free credit score report website, it is quite probable that every hard inquiry into your credit report will cause a drop of three to five points in your credit score.

Maxine Sweet, Experian’s vice president of public education, told The Huffington Post that recent hard inquiries “account for very few negative points in scoring models and are even less negative within a few months.”

Beware, however, if you are trying to refinance or buy a new home or car, in the near future, it may be best not to ding a good credit score before you finance the big purchase. According to a website called Credible, there are ways to protect your credit scores from the dings received by hard inquiries.

In our hypothetical, if Jane decided that she didn’t want to lower her credit score she would be placing an economic value of about $943.60 on each point she chose not to lose. This doesn’t make sense, if Jane has no intention of refinancing or purchasing a new home within the next 1 to 2 years and she already has good credit. In Jane’s situation, it seems rather penny wise and pound foolish not to take advantage of a balance transfer offer and save the $4,718.00 in interest, over the course of about 50 months.

What to do with Old Credit Cards

It’s also good to know that opening a new account lowers the average age of the overall credit profile, but canceling an old card after transferring a balance really puts a negative ding on the credit scores. That’s not good because again, lowering credit scores might mean higher costs in other areas of life, like renting an apartment, starting a business, purchasing a home, refinancing student loans or trying to buy or re-finance a home.

If a zero interest balance transfer makes good economic sense to you, and you’ve done the math, it’s probably best in most circumstances to keep the old credit card account open, provided new balances are not run up on the card.

Balance Transfer Rules of the Road

  1. Don’t miss payments — ever.
  2. Typically, you have only 60 days to complete the transfer. Do this or lose the promotional interest rate.
  3. Don’t close your old card.
  4. Don’t use the new card to rack up more debt. In some cases, interest will immediately start accruing on the new purchases (unless there is a 0 percent purchase offer). As a general rule, it is best not to use the card since the goals is to pay off the debt.
  5. Never use the card at an ATM for a cash advance, especially don’t do it with a balance transfer card.

Finding a Balance Transfer

As a general rule, to qualify for a balance transfer, you’ll need a credit score of 680 or better.  According to Nick Clements, co-founder of financial products comparison website, MagnifyMoney, “Banks are looking for ‘high-balance, low-risk’ customers.” This means that your credit card debt is probably less than $20,000 and you always pay on time, and are likely paying the minimum due or just a bit more. If you have had credit for a while, MagnifyMoney offers a free balance transfer calculator for consumers carrying credit card debt.

When to Avoid a Balance Transfer

A balance transfer can be a simple way to slash interest rates and amount of time it takes to pay off debt. But it isn’t necessarily right for everyone. “If you can pay off your debt in six months or less, or can’t afford multiple transfers, than it probably is not worth doing a balance transfer.

If you have debt that you can’t possibly manage, and have little or no hope of paying it off, talk to a good Bankruptcy lawyer now.  There are more ways to skin a cat.  In other words, your helpful lawyer may have great ideas on how you can become virtually debt free and save most of the things you own, like your car, your savings and your home.

Lower Credit Scores, Now What?

If you have a lot of credit card debt and a credit score below 680, you may not qualify for a balance transfer, but no worries. You can still reduce your interest rates by using a personal loan. Ask your local bank or check out websites like Lending Club or Prosper

These websites allow you to pre-qualify for a personal loan, using soft inquiry rather than a hard inquiry on your credit report. The soft inquiry doesn’t cause a drop in credit score points, but as we mentioned before.  The hard inquiry will.

Some Things Just Make Good Sense, Some Don’t

Unless you are in the process of buying or refinancing a home or financing something big, and you’ve got the golden ticket of a 680 credit score or higher, it just doesn’t make good sense to pay high credit card interest rates. Do the math.  Figure it out. Even my friend from the Farmer’s Market now has a plan to help manager her debt, even with her meager social worker salary.

If a Balance Transfer Makes no sense and your debt getting way out of hand, you know what to do.  Good bankruptcy lawyers typically don’t charge for a first consultation. Find a good bankruptcy lawyer, set up your free consultation and see if a fresh start is right for you.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2017, by Ginger B. Kelly, Esq., all rights reserved.

 

2 Comments

June 29, 2017 · 4:22 pm

Bankruptcy, the Easy Way Out. Really?

chapter-7-bankruptcy-lawyer-chicago-illinois-790x300

By Ginger B. Kelly, Esq. Posted: May 16, 2017

In 2013 there were over a million bankruptcy filings.  In 2014, there were slightly less than a million.  Based on these filing numbers, something like 1 out of every 200 adults in the US file for bankruptcy (uscourts.gov). That’s a lot of people turning to bankruptcy.  Based on these figures, it appears as if bankruptcy seems like an easy way out, or is it?  Let’s consider a few things before making this assumption, like the implications of a filing and how bankruptcy compares to other debt relief options.

Is Bankruptcy Really the Easy Way Out?

Basically, a typical Chapter 7 bankruptcy (total liquidation) filing involves three basic steps.

#1.  Paperwork: To begin any bankruptcy case, a series of forms outlining your debts, assets, income, expenses, and related information need to be filed.  This is not like your ordinary tax return.  There are multiple papers that need to be filed. It’s a ton of paperwork.

#2. Trustee Meeting: After the petition, the schedules and all the paperwork has been filed, a court hearing date for a 341 Trustee Meeting will be scheduled.  The Trustee Meeting (also known as the Meeting of the Creditors), the bankruptcy trustee will ask you many questions.  In Massachusetts, you will be given notice that the meeting is recorded.  Most of the questions confirm the information in your paperwork.  The Trustee may ask you about how your debts and assets will be handled. For most Chapter 7 filers, the Trustee Meeting goes rather quickly, about 15 minutes or so.

#3.  Discharge – After the Trustee Meeting, assuming nothing goes wrong, there are no issues or complications, most of your debts will be discharged.  A few debts that will not be discharged are Student Loans, some IRS Tax Debt and a few other things.  Now the person filing Chapter 7 can begin their fresh start.

But wait…

Those three steps are an over-simplification of the process.  There is a lot more to it.  Many other important legal considerations must be dealt with, in a typical Chapter 7 bankruptcy case. This is why most people consult with a lawyer before beginning or considering any Chapter 7 or Chapter 13 bankruptcy case.

Even when the case is closed, there’s a lot to consider.  Credit card debts, medical debts, payday loans and most other unsecured debts, are gone, but other debts like student loans may not ever go away.  Secured debts, like car loans and home mortgages can also go away.  But if a person whats to keep their home or car or both, they will need to reaffirm those debts and continue making those payments.  Sometimes, a reaffirmation hearing is required.

So why is Bankruptcy complicated?

Primarily, there are two big potential problems, maybe more.

#1.  Valuable property at Risk.  Because a bankruptcy trustee will evaluate both debts and assets, to determine if some debt could be repaid by liquidating (selling) your assets, a filer runs the risk of losing some important assets.

For most people, the two primary things they don’t want to lose are automobiles and real estate.  These two assets are the easiest to sell.  If the value of a filer’s home or car (or both) is much greater than the loan you used to buy it, that property could potentially be sold to repay creditors.

For more on how this works, and on the exemption laws that protect your property in bankruptcy, see this article, Should I Choose Massachusetts or Federal Bankruptcy Exemptions.

#2.  Effect on credit scores. The other issues most people worry about when it comes to filing for bankruptcy is how this affects credit scores.  Everyone knows any bankruptcy will have a serious impact on a FICO score for several years.  The degree of impact depends upon how good or bad a filer’s credit is the day they file their petition.  The better the credit the more significant the drop will be.  If a filer’s credit was shot to begin with, or on the low side, (which is true for most people who file for bankruptcy), the effect will be significant, but less than a filer with good credit.

To sum it all up, when a person files for bankruptcy, they can expect that obtaining loans right away won’t be so easy.  Often, credit cards and even car loans are available, but typically at very high rates of interest.  However, when a filer sticks to a reasonable budget, and pays their bills on time, they will be off to a fresh start and better credit over time.

Alternatives to Bankruptcy.

It’s been said that bankruptcy is sort of the “ultimate weapon” of debt relief.  But this means that bankruptcy should only be used when other options fail.  A discharge of debt via bankruptcy is only available once every seven or more years; bankruptcy is not something a person should try first.  Some people work with credit management companies to reduce debt, but I do not recommend this in most cases.  Others try asking family for help or they find another source of income, like a second job.  Adjusting one’s budget is always a good plan.  Do this before considering filing for bankruptcy.

Next Steps…

For those who have tried every option and have no realistic alternatives, then it’s time to schedule a consultation with a bankruptcy lawyer. Your first consultation should not cost a dime and it’s a good time to find out if bankruptcy will work in your situation.  When you meet with your lawyer, be sure to ask a few important questions.

  • Based on my income and job situation, do I qualify for bankruptcy?
  • Can I get rid of all my debts in bankruptcy?
  • Is property I own (bring a list of a few big items) unprotected or at risk?

A quick consultation with a good lawyer will help you understand a few things bankruptcy can do to help and what the risks would likely be or whether or not there are better options.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2017, by Ginger B. Kelly, Esq., all rights reserved.

8 Comments

Filed under Bankruptcy, Debt, Debt Collection, Filing, Massachusetts, Massachusetts law, practical stuff, Rhode Island, Student Loan Debt, Uncategorized

Should I choose Massachusetts or Federal Bankruptcy Exemptions?

choice

Should I choose Massachusetts or Federal Bankruptcy Exemptions?

By Attorney Ginger B. Kelly, April 1, 2017

Good news for Massachusetts residents. You have a choice weather or to protect your property using Massachusetts or Federal exemptions.

In many ways, Massachusetts is a great state to live in. Here, Bankruptcy filers have a choice whether to protect or to “exempt” property using Massachusetts bankruptcy exemptions or the federal bankruptcy exemptions.

In a Chapter 7 Bankruptcy, any property not exempted can be sold by the bankruptcy trustee and the proceeds used to pay creditors.  Nonexempted property can be kept, in a Chapter 13 case, but payment must be made for the value of that property, under the terms of a three or five-year payment plan.

For Massachusetts filers who have significant equity in their homes, the Massachusetts exemptions are substantial.  Federal law offers a larger wildcard exemption.  Since it is difficult to examine which exemptions work best, it’s very important to look at each exemption closely.

Mixing Massachusetts Exemptions with Federal Exemptions is not permissible.

In Massachusetts, a filer must choose one set of exemptions only.  When figuring out which set of exemption laws is best for your circumstances, mixing and matching is not allowed.

Doubling Exemptions for Married Couples.

For married couples filing, you can double the exemptions, apart from the homestead exemption for under the Massachusetts and federal exemption rules. In Massachusetts, the rule is typically called Exemption Doubling.

Which to choose, Massachusetts or Federal Exemptions?

The answer to this question depends quite heavily on your specific situation and set of circumstances.  For some filers, more property will be kept using the Massachusetts exemptions. For example, Massachusetts has more favorable exemptions for your house, your car, your clothing, other household items (like appliances and furniture), and tools of the trade. *

How do I keep from losing my home?

For Massachusetts bankruptcy filers, Massachusetts exemptions are excellent for homeowners.  Homeowners who have filed and recorded with the registry of deeds, a properly executed homestead declaration are entitled to receive a $500,000 exemption. If no homestead declaration is recorded, the automatic exemption is still a hefty $125,000.

As mentioned before, just like the federal law exemption, the homestead exemption cannot be doubled for married couples filing jointly.

In the alternative, the federal law exemption for a home is only $23,675 and $47,350 for married couples filing jointly.

So, the key to keeping your home in Massachusetts is, if there is more than $23,675 worth of equity in your home, and you want to keep it, the Massachusetts exemptions are the best choice.

 How do I keep from losing my car?

Under the federal exemptions, $3,775.00 is allowed for automobile exemptions.  This means, that if the Kelly Blue book value of your car exceeds #3,775.00, you may want to choose the Massachusetts exemptions.  Under the Massachusetts bankruptcy exemption law, $7,500.00 is allowed for the motor vehicle exemption. If a filer is over 60 years old or disabled, the Massachusetts exemption allows a $15,000.00 motor vehicle exemption.

If a filer’s car is worth more than $3775.00, or there is more than $3,775.00 worth of equity in that car, and they want to keep it, a filer would be better off using the Massachusetts exemptions.

How do I keep all my clothing?

Under the Federal exemptions, a filer can keep $12,625.00 in personal property, which includes clothing.  But the maximum value for any one piece would be only $600.00.  In Massachusetts, a filer can keep all of their necessary clothing in bankruptcy. So, under the Massachusetts exemption rules, a filer will likely keep more because the $12,625 federal exemption includes all other personal property as well, like furniture, appliances, housewares and other consumer goods.

How do I keep my appliances and furniture?

As mentioned above, the Federal exemption rules allow for only $12,625.00 in personal property. If a filer uses the Massachusetts bankruptcy exemptions, they will be allowed to keep any necessary beds and bedding, one heating unit, one stove and one refrigerator and one hot water heater. An additional $15,000.00 in home furnishings can be exempted, if they are necessary for the filer and the filer’s family.

Using the more plentiful Massachusetts exemption makes sense for most filers.  However, if a filer has an extra refrigerator in their garage, it is unlikely the second refrigerator would be considered a necessity. If the second refrigerator is really that important, the federal exemptions may be a better choice, as long the value is that second refrigerator is less than $600.

How do I keep the tools I use for my job?

Filers in Massachusetts are in good shape when they have tools of the trade or tools used while doing business. The Massachusetts exemptions allow a $5,000 exemption for tools of the trade and an additional $5,000 for any materials used in their business. Federal law allows only a $2,375.00 exemption for tools of the trade. So, if a filer has more than $2,375 of tools and materials, used for their trade or business, then the Massachusetts exemptions would be the better choice.

Are Federal Exemptions Ever Better Than Massachusetts Exemptions?

In their entirety, the federal exemptions are less generous than many Massachusetts exemptions.  However, there are a few exceptions. One exception is that the federal exemption law will protect slightly more jewelry and a larger wildcard exemption.  This may benefit many filers, depending on their situation and what they want to keep.

How do I keep my valuable jewelry?

Since Massachusetts law offers only a $1,225.00 exemption and federal law a $1,600.00, a filer may choose Massachusetts exemptions over federal. $Granted, 375.00 worth of equity in jewelry isn’t a huge savings, but if it is important to the filer that certain jewelry is retained, the federal exemptions may be a better choice.

Which Wildcard Exemption do I chose?

Wildcard exemptions are used to protect assets not listed as exempt. In other words, a wildcard can be used to exempt nonexempt assets.

Per federal exemption rules, the federal wildcard exemption is currently valued at $1,250.00 plus any unused portion of the federal homestead exemption up to $11,850.00. * If a filer doesn’t need to claim their full homestead exemptions, they will be able to use up to $13,100.00 total.  If the filer has no homestead exemption, only $1,250.00 can be used to exempt nonexempt assets.

In Massachusetts, the wildcard exemption is different. Per the Massachusetts exemption rules, the wildcard exemption is $1,000.00, plus up to $5,000.00 of any unused portion of the total exemptions provided under the $15,000 household furniture exemption, the $5,000 tools of the trade exemption and the $7,500 motor vehicle exemption. This is good news for certain Massachusetts filers. Under the Massachusetts exemption rules, filers can keep up to $6,000 in nonexempt assets.

Now that I know more about the exemption rules, why do I need a Bankruptcy Attorney?

In Massachusetts, there is no one-size-fits all bankruptcy.  Even though Massachusetts law offers a more generous exemption package, federal law may be best for different filers for so many reasons. Thorough research of both sets of exemptions and all assets are critical, before making decisions. Attorneys can remove uncertainty, confusion and doubt and help you determine the best way to protect your home, your car and your personal property.

Hiring a competent, experienced bankruptcy lawyer to handle your case will save not only you a headache, but it may also end up saving you money. When everything is completed properly the first time, bankruptcy attorneys save you money. Mistakes are costly. Mistakes not only affect your time, but your finances and may end up costing your case.

Speak to an attorney who offers a free first consultation. Earlier I wrote about, “how to find an experienced and vetted attorney, FREE!”  This offers good advice on how to find an attorney on a budget or pro-bono (which means free).  Best of luck to you.

*NOTE: All the bankruptcy exemptions mentioned, above, may differ and are subject to change on or before April 2019.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  All electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2017, by Ginger B. Kelly, Esq., all rights reserved.

2 Comments

Filed under Bankruptcy, Debt, Federal Law, Filing, Financial, Law, Legal, Massachusetts, Massachusetts law, Uncategorized

Handle Student Loan Debt like a Boss

Gan Golan

“You snooze, you lose applies in every aspect of eliminating student loan debt.” ~Attorney Kelly

by Ginger B. Kelly, Esq.   Posted: March 9, 2017

We’ve all heard about, read about, or experienced it, crushing student debt.  Student loan debt can be quite paralyzing, overwhelming and downright horrifying.

That’s the bad news. The good news is, with good budgeting and planning, this beast like most others can be tamed. Dealing proactively with student loan debt is a far better plan than dealing with the nasty consequences of doing nothing and facing wage garnishment.  Wage garnishments are not pretty, believe me.

These are absolutely some of the best tips out there if you want to handle your student loan debt like a boss. Follow these, like a road map and find the light at the end of the dark student debt tunnel.

Get Over It, Get Your Paperwork Together and Pick Up the Phone 

The experts say, there is a time to cry, a time to grieve, and then there is a time to pull yourself up by the boot strings and get over it.  Getting over what grieves or worries you involves action. Ignoring this worrisome ‘ginormous’ problem won’t make it go away. Being proactive is what you do. It’s simple. Start by having your last tax return or your last W-2 ready, in hand, just in case. Then, call your student loan service provider or creditor.  Find out your best options. Write them down. If you need time to make a decision, take the time to think things through.   

Be upfront and honest. Transparency is the best policy. Tell your loan servicer or creditor your situation. This will help them explain to you, better, your different options for repayment. There are a lot of legit options to look into, like forbearance, deferment, and, in some special situations, even debt forgiveness.

Not asking about these things means living in fear. Fear, in this context, brings nothing but trouble. It’s easy to ask about the interest, the length of time to repay and things that may impact your budget. Oh yes – always draft a simple updated budget, an easy to create, yet amazing empowerment tool. This will help with your discussions, ideas and planning.

For most folks facing serious trouble, like unemployment, underemployment, long or short term disability, the best piece of advice I can offer is to look into an Income Based Repayment Plan (IBR). Oftentimes, an IBR results in a zero dollar or very small bottom line payment. An IBR is based on your current income and family size. Check this out. Save the deferments and forbearance plans, for real issues like an injury, death or serious problems. Use the IBR when you are facing underemployment or unemployment issues, long term.

Discovering Repayment Options Online is “easy-peasy”

With the number of tools out there to use, there is no better time than now to find out what your repayment amount will be. One helpful online tool that comes to mind is the Department of Education Federal Student Loan Repayment Plan Estimator.  Use it.

Calculate different repayment plans.  Find out what plans include debt forgiveness if you still owe a balance after paying on your loan for 10 to 25 years. It’s easy-peasy and actually, many of my clients, family and friends use this tool.  It’s amazing. You can do this.

Frugal is the New ‘Thing’ 

OK, hundreds of thousands of people understand, the job market is tough.  This is a fact.  Moving right along, there are work-a-rounds to get through this. Try a legit side hustle, part-time gig or freelance work, like Uber, Summer Pizza Delivery, Coaching, Home Sitting, Garden Center or Nursery work. Try selling extra stuff, collectibles or homemade things on eBay, Etsy or at a flea market. Then, (this is the best part) you can usually save money, even big bucks, by decreasing spending.

Decreasing spending gets easier and easier the more you try it and the more you know.  Create, rather than consume. Save, rather than spend. It’s fun and it’s better for our family, environment and our communities. Websites like the Frugal Girl or Minimalist Mom are good tools to help along the way.

My friend Andy Prescot writes a great blog called, The Art of Being Cheap.  We learned how to reduce our mobile phone bill over $100 per month.  We have saved well over $3600 the past three years, based on Andy’s good tips regarding an inexpensive, but excellent, mobile phone service plan and provider.  Andy also has more good tips on fugal things like how buy a refrigerator, start an Uber business part-time or whether or not to take a 401(k) loan.

Many of these websites are excellent. The top 25 frugal bloggers for 2016 can be found, here.

Challenge yourself to do at least 3 new things this month to save money.  My three favorites are find new mobile phone provider and plan, make home-made pizza (rather than go out to eat) and how to service and repair my car.  It’s absolutely a blast and empowering.  However, I’m warning you now, frugal is contagious. You’ll get hooked. Your friends will get hooked. Seriously, frugal is a thing.

Ask your Boss, Like a Boss

A growing trend in the last few years has been for employers to offer student loan repayment assistance to employees as a benefit. Unlike tuition reimbursement (which has been around for years), student loan repayment assistance is a relatively new idea, a concept that’s gaining a lot of traction these days.

Last year alone, according to a recent study, 3% of companies offered some type of assistance program to help employees pay down their student debt and one thing’s for sure, this number is growing and growing strong.

If you are looking for a new job or are a new hire, negotiate. Most workers don’t negotiate, yet employers report that they are willing to pay more. Use this to your advantage. Some employers are now offering student loan repayment as a benefit.

There are tons of articles designed to help with this. Daily Worth, US News and Thrive powered by ADP are all helpful websites. Find out what you need to know about this new perk.  Work it to your advantage.

If a raise or bonus is in your future, ask your current employer or HR department about ways they can help you reduce your current student loan debt. Perhaps they can apply a new raise or bonus to your existing debt repayment plan.     

Find Experienced Help or Seek a Vetted Lawyer, FREE!

There are a few different professionals can help. Financial advisers are available if they are certified and affiliated with a reputable bank.  Oftentimes a certified public accountant (CPA) is full of free and helpful information.  Towns and cities quite often offer free credit and financial counseling services.  Check with your local library.  Go online.  Look into your local town or government website.

The Charlton Town Website, is here. On the clubs and organization page is a list of places you can go to get help. Quite often, places like the Lions Club, Food Banks, Veteran’s groups and Business Associations are networks of helping hands, ready to offer assistance if you ask.

Librarians are a treasure. The Charlton Public Library link is here.  Ask your local librarian when or where there is a class on debt, financial management or student loan debt assistance. If they don’t know, they will find out for you. Quite often sofa.org has classes held at local libraries. Ask your librarian about this. Be persistent.

If your situation involves a little bit more than, “I hate my loan servicer and don’t know what to do about it,” an experienced student loan lawyer or debtor defense lawyer is probably your best bet. Here’s how…

  1. Lawyers can give you guidance regarding your legal rights and options.
  2. Lawyers can represent you in negotiating with your student loan creditor, services or debt collection agency.
  3. They can help you figure out the best way to work out delinquencies and defaults, or to apply for a discharge.
  4. They protect you from unfair debt collection practices or debt collector abuse.
  5. Lawyers manage credit disputes.
  6. Lawyers advocate and go to court for you, managing legal matters like student loan-related issues, collections lawsuits or cases involving schools or agencies for legal violations and causing harm.
  7. In Massachusetts, an experienced Massachusetts lawyer can sometimes get you money awards for violations of things like the FDCPA and Massachusetts law.

If you’re dealing with delinquency or default, considering filing for bankruptcy or applying for a disability discharge, a debtor defense/bankruptcy/student loan lawyer is the best way to fly.

 Why a Lawyer, Why Not DIY?

Since every person is different, and every situation is different, whether or not you should contact a student loan lawyer really depends on your specific circumstances.  In reality, you may or may not need a student loan lawyer.

There are really very few things that inherently require you to hire a lawyer.  Even filing for bankruptcy or defending against a collections lawsuit can be done ‘pro se,’ (pronounced, “pro-say”) meaning without legal representation or Do It Yourself (DIY).

While hiring a student loan or bankruptcy lawyer may not be required, a lawyer may be incredibly useful, especially if you’re feeling overwhelmed, you’re not sure of your legal options, you’ve been sued, or you’re dealing with a complex legal issue.

In other words, debtor defense and student loan lawyers can take a difficult, seemingly hopeless or complex situation and make it easy for you by offering steps and solutions to give you back your life and your ability to move forward.

Some lawyers, like myself, are successful at getting clients extra cha-ching, based on the mistakes and bad behavior of some debt collectors and creditors.

The Final Word

Before hiring a lawyer, talk to your student loan creditor or servicer and exhaust your options.  After using up all your options, get help immediately.  Like I said earlier, yes there is a ray of hope.  You can do this.  Check out lawyer websites in your area.  Pick up the phone.  Call a lawyer. I suggest that you find at least three local lawyers and comparison shop.  Ask each one of them if they offer a free consultation.  Then, schedule appointments on your own time.

For the unemployed or underemployed, quite often legal aid lawyers in your local area offer free or reduced fee services. In Worcester County the legal aid website is called Community Legal Aid.  Free is good. Free is frugal. Frugal is a new thing, remember?

Think of these tips as being your job.  It’s your job to save money and work toward the positive things in life.  In a sense, saving money and working toward the positive is powerful and self-soothing.  Do this. Do it now. Regain control of your new life. Feel liberated and pleased with your own good efforts. Empowerment feels good.  Empower yourself like a boss.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016, 2017, by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, business law, Civil, civil law, Debt, Debt Collection, Financial, Hiring Counsel, Law, Legal, Massachusetts, News, practical stuff, Retirement Savings, Rhode Island, Student Loan Debt, Uncategorized

Documents Needed Prior to the 341 Trustee Meeting (aka Meeting of the Creditors)

documents-required

Just the other day I was driving to my own client’s 341 Trustee meeting in Worcester, Massachusetts and I thought, most people have no clue what documents are needed prior to most trustee meetings.  So, here is the short list.

The documents you will need are generally the same whether you are filing a Chapter 7 or Chapter 13 bankruptcy.  However, specific documentation requirements are something different in most every local jurisdiction.  Be sure to check your local rules or contact your attorney in your specific situation.  Your attorney can notify the trustee and find out what is needed.

Tax Returns

Minimally, and most importantly, your last year’s tax return is required to be delivered to the trustee minimally seven days prior to your 341 meeting.  Local rules and trustees vary on what is required prior to the meeting.  If you do not provide this to the trustee, prior to your meeting, your case could be dismissed.

Other than this, you will typically need to provide copies of your tax returns or tax transcripts for the last two years during your meeting.  I have found, over the years, that it is best if you sign your returns.  If you have tax returns that haven’t been filed, you will need to explain why you were not required to file.  If you did not have a valid reason for not filing, most trustees, especially in Chapter 13 cases, will require you to file your taxes and provide copies before concluding or approving your case.  Again, some trustees may require more tax returns while others may ask only for your most recent one.

Income

If you are an employee, you will need copies of pay stubs (also known as payment advances) for the six-month period prior to the bankruptcy.  You will also need your past two years W-2 forms.  If you collect Social Security or Social Security Disability Income, you will need your award letter.  If you are self-employed, you will probably need to provide a profit and loss statement for the same six-month period as well as business bank statements to verify the amounts on the statement. If you have income from other sources such as rental properties or unemployment, proof of this income is also required.

Real Estate

If you own real estate, a valuation of the property is required.  Generally, I recommend my client’s get a broker’s price opinion, or a full appraisal, but this depends upon the situation.  In some cases, this is not needed.  Mortgage statements showing current loan balances, deeds of trust, and proof of home insurance may also be required.

Vehicles

If you have titled vehicles, such as an automobile, you will be required to provide a recent copy of your vehicle registration.  I also recommend you have proof of insurance, and valuation information, such as a KBB (Kelly Blue Book) valuation (you can get this online). If you have a car loan, a recent loan statement showing how much you owe and what your monthly payment is, will be important.  For other titled property, such as boats or trucks, recent valuation may also be required.

Retirement Accounts and Other Bank Accounts

Recent bank account statements (checking and savings) and retirement account statements are usually very important to provide to the trustee.  Your attorney should have these.

Miscellaneous

If you have any other special circumstances, like child support or alimony, you will need to provide proof of these expenses.  Typically a copy of the judgment, order or agreement will be sufficient

Proof of Identification and Social Security Number   

This is very important.  When you go to your hearing with the trustee, you will be asked to show proof of identification.  So you must have these two things ready for the trustee at the beginning of your meeting.  Identification must be valid and include a recent photo.  Examples are a current state-issued ID card, a current driver’s license or valid passport.  You will also need to show proof of your social security number.  These documents are typically your state-issued social security card or employee-issued W-2 form.

That’s it. Now you are ready for your Meeting with the Trustee. If you have any questions or need any help, please give me a call. My direct line is 508-784-1014 (yes, this is the number that goes directly to me, personally).  I’ll be happy to set up your first free consultation, absolutely free.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, visit us at Ginger B. Kelly on Facebook or feel free to call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016, 2017, by Ginger B. Kelly, Esq., all rights reserved.

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Filed under Bankruptcy, Debt, Debt Collection, Filing, Financial, Law, Legal, Massachusetts, Massachusetts law, Uncategorized

Slip and Fall, an Icy Tail in Massachusetts

It’s official, Worcester County, Massachusetts just got snow dumped! Here’s the “scoop” on clearing the snow.

Source: Slip and Fall, an Icy Tail in Massachusetts

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The Domino Effect: Filing a First and Second Bankruptcy

domino-effect

By:  Ginger B. Kelly, Esq.

If anyone has played dominoes, they realize that one small mistake can cause an entire stack of dominoes to come crashing down.  The same is true for filing first and subsequent bankruptcies.  If a person has received a discharge or has filed for bankruptcy in the past, it’s important to know how soon they can file for bankruptcy again.  Time limitations for discharge under bankruptcy, after filing a prior bankruptcy in a Chapter 7 or Chapter 13 bankruptcy, may be tricky and are different under different circumstances and chapters.  This overview is intended to help potential filers make wise choices before the stack of dominoes collapses.

Technically, Time Limits Do Not Apply to Filings

In theory, there is no minimum time to wait before you can file for bankruptcy the second time around.  However, the dilemma with filing a second time is if a person files too soon after they received a discharge of their debts in a prior case, they can’t get another discharge. Filing too soon makes the second bankruptcy filing a waste of time and money.  This is why time frames apply to receiving a second discharge, not the filing of the case.

Filing Again Under the Same Chapter

If a person is filing under the same bankruptcy chapter, the time frames are different depending on whether they file successive Chapter 7 or Chapter 13 cases.

Filing Again Under Chapter 7

If the first discharge was under Chapter 7, a second discharge is not permitted under Chapter 7 again, until eight years from the date the first case was filed.

Filing Again Under Chapter 13

If the first discharge was under Chapter 13, a second discharge is not permitted under Chapter 13 again, until two years from the date the first case was filed.

The only issue with consecutive Chapter 13 bankruptcy cases filed too closely together is if the court refuses to confirm your Chapter 13 plan in the second case. Ordinarily, if the second plan is not confirmed a person can convert the bankruptcy to a Chapter 7.  However, in this set of circumstances, the rules for receiving a discharge under Chapter 7, after a discharge under Chapter 13 will prevent a person from getting a discharge in the converted case.  This is why converting a case from a Chapter 13 to a Chapter 7 too soon, isn’t a good idea in most situations.

Different Chapter Filings: Order Matters

If the second bankruptcy filing is under a different chapter then the first, order determines the time frame.

First, Chapter 13: Second, Chapter 7

If a person received their first discharge under Chapter 13, they cannot receive a discharge under any Chapter 7 case that is filed within six years from the date they filed the first Chapter 13.  Generally, the six-year waiting period exceptions are:

  •  if all the unsecured creditors were paid in full under the Chapter 13, or
  •  at least seventy percent of Chapter 13 claims were paid, the plan was proposed in good faith and the payments were the best effort possible.

First, Chapter 7:  Second, Chapter 13

If a person received a discharge under Chapter 7 first, they cannot receive a discharge under Chapter 13 filed within four years from the date the initial Chapter 7 was filed.

It’s a bit tricky if a person files the second case under Chapter 13, between four and eight years after they filed the first Chapter 7 when the court doesn’t approve the Chapter 13 plan.  If the Chapter 13 plan was not approved, “technically” a person could convert the case to a Chapter 7, but this isn’t a good idea because the rules for successive Chapter 7 discharges would kick in.  In this situation, if the time frame between subsequent filings is not eight years, a person will not receive a discharge in the converted case. If this happens, it is probably best to ask for a dismissal of the subsequent Chapter 13 case.

When a Second Filing May be Helpful, Even Without a Discharge

In certain situations, filing a Chapter 13 case immediately after getting a Chapter 7 discharge might be beneficial.  This is often referred to as a Chapter 20 bankruptcy.

In this situation, for example, a person wants the protection of the bankruptcy court while paying something like a tax debt or non-dischargeable priority debts, under a Chapter 13 plan. Whether or not they will benefit from this type of Chapter 20 bankruptcy depends on the circumstances and the case law in their jurisdiction.  But despite its benefits, a Chapter 20 has many drawbacks and can be subject to bad faith filing objections.  An experienced bankruptcy lawyer in your area would need to be consulted for advice on this topic.

First Case Not Discharged

If the first bankruptcy case did not result in a discharge, typically, a person can file for bankruptcy again with no limitations on the second discharge.

Discharge vs. Dismissal

First, it may be important to note that there is a big difference between a discharge and a dismissal.  A discharge is an order from the bankruptcy court releasing a person from their debts.  A dismissal from a bankruptcy court is an order removing the case from the docket, typically without a discharge.  

If a person successfully completes a case and obtains a discharge, they are no longer on the hook for debts discharged in the bankruptcy. However, if a case gets dismissed, the person who filed will lose the protection of the automatic stay and their creditors are free to come after them to collect their debts.

First Case Dismissal

If a bankruptcy case was dismissed, a person can file again unless the court orders otherwise.  If the case was dismissed for failure to obey a court order, failure to appear in the case, or voluntarily dismissed after a creditor filed a motion for relief from the bankruptcy stay, a 180-day waiting rule applies.  However, quite often there are different rules regarding the bankruptcy stay.  A stay is an automatic injunction that stops actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy.

First Case Discharge Denied

If the discharge was denied in the first case, a person typically may file again but will probably not be entitled to a discharge of the debts from the first case. This is another special circumstance where it is always smart to seek an experienced bankruptcy lawyer for advice.

The take-away from all of this is, as a general rule, if a person files for bankruptcy too soon after they received a previous bankruptcy discharge, they cannot receive another discharge.  Like a neat little stack of dominoes, the second case is very dependent upon the first.  The good news is, avoiding mistakes can be easy.  Consulting an experienced attorney is the first step.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.com, or call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We cannot stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016, 2017, by Ginger B. Kelly, Esq., all rights reserved.

 

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When will the Massachusetts Ballot Questions become law?

ballot-questions

Now we know the election results in Massachusetts.  We had a few ballot questions, four to be exact.  Ballot questions are not laws that deal with taxes, but they are real issues that deal with policy. Ballot questions are policy issues that affect the quality of life in Massachusetts.

To understand a bit about ballot question law in Massachusetts, and when these questions may or may not become law, it is important to understand a little about the ballot question drafting process.

Each ballot question, also called an “indirect initiated state statute question“, is essentially a proposal regarding some sort of Massachusetts policy, made by concerned citizens.  Law-makers of either the Senate or the House of Representatives or both do not draft these types of laws.  Concerned citizens draft the proposed laws.

Concerned citizens take information on the topics that are important to them and draft proposals on the law.  The drafts may be redrafted a few times until the final draft comes out in the form of a ballot question.  The ballot question proposals must have petition signatures.  Then, the Massachusetts state legislatures, the Massachusetts State Attorney General and the Supreme Judicial Court (SJC) all play a roll in the approval process.  In the final step, the ballot question proposals or petitions finally become approved as Massachusetts state ballot questions.  If approved, the Massachusetts ballot question will become law.  Learn more about this process, here.

If approved, the dates the laws will take effect are drafted into the law itself.  The way the law was written or drafted, is the way the law will be interpreted.  The dates these laws will take effect or become actual enforceable state law, are included in the draft petitions.  In other words, effective dated are always drafted or written directly into the petitions that become final ballot questions.

Below, is the list of Ballot questions Massachusetts citizens voted on November 8th, 2016 and when they will become law.

Question 1 · Allows the state gaming commission to issue an additional slot parlor license.  Massachusetts voted No, by 61%

Since a “No” vote will leave the law as-is, there is no question as to when this law will be enacted.

Question 2 · Allows the Board of Education to approve up to 12 new charter schools or enrollment expansions in current charter schools each year.  Massachusetts voted No, by 62%.

Since a “No” vote will leave the charter school cap as it stands, there is no question as to when this law will be enacted.  There are no changes to the law.

Question 3 · Prohibits selling farm products from animals not raised in spaces that meet a minimum size requirement.  Massachusetts voted Yes, by 78%

Because this law was approved, this law will go into effect on January 1, 2022.

Question 4 · Allows the possession, use, distribution, and cultivation of limited amounts of marijuana by persons age 21 and older.  Massachusetts voted Yes, by 54%.

Because this law has passed, this law will take effect December 15, 2016 and stores could open by early 2018.

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The Law Office of Ginger B. Kelly is now accepting new clients.  Call and schedule your first appointment.  We are a small law office offering your first confidential consultation, absolutely free of charge.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.wordpress.com, or call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We can not stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016 by Ginger B. Kelly, Esq., all rights reserved.

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Basic Estate Planning in Massachusetts

last-willProtecting loved ones and establishing wishes prior to death is pretty basic and important part of life.  Sometimes families with children don’t realize how essential it is to select a guardian.  Oftentimes grandparents would like to leave a legacy to their grandchildren or skip a generation.  We all need to think about our essential health care and financial decisions now, before these kinds decisions are made for us.

If you do not have a will, or if your will is invalid, you will die what is called, “intestate.” In cases when a person dies intestate, their probate assets are distributed according to statutory guidelines.  These guidelines are extremely rigid. When a person dies intestate, the process of distributing assets does not take into consideration any of the wishes and desires the person who died (the decedent) or the family.  Furthermore, this process takes a considerable amount of time.

In Massachusetts, there are four basic legal documents needed to protect a basic estate and avoid the hassle, time and expense of probating an estate for those who die intestate.  A basic estate is an estate valued at less than $1 million dollars in total assets.  These four documents are:  a Will, a Durable Power of Attorney, a Health Care Proxy and a Health Care Directive.

  1. The Will

A will is a document that you use to specify your wishes as to how to distribute your assets after you pass away.  Your assets are your personal property and real property, like your home, automobiles, bank accounts, and other personal items.  For a will to be legally valid, it must be signed in front of at least two witnesses and notarized.

The will also designates an executor for your estate.  An executor is the person whom you choose to administer your estate.   An executor should be reliable and trustworthy, because they will have broad powers over all of your assets after you have passed away.

After appointment of the executor, a will lists individual items that will be distributed to certain individuals.  A will can designate anything to be left to anyone, as long as the conditions and items are lawful.

The last section of a basic will usually involves paying of taxes, debts and expenses like funeral expenses and things that must be paid by your estate, which is part of Probate.  Only probated items will be included in your will.  Non-probated items will pass by operation of law.

A non-probate item is anything that passes by operation of law, like a contract or an insurance policy or jointly held property, like property held by tenancy by the entirety or joint tenants.  Many homes and bank accounts are held jointly.  Property and assets held jointly with someone else passes automatically to the other person and doesn’t pass by will and is considered a probate asset.

A few things that may pass by contract are life insurance policies, retirement accounts and most annuities.  The general rule is, property that has a beneficiary designation is something that passes by contract.  Therefore, property with a beneficiary designation is not a probate asset.

Even if your home is owned jointly, and a provision in your will designates something otherwise, the provision in your will, generally, will be ignored in most cases.

  1. Durable Power of Attorney

A will is an instrument that helps people know what to do with your things after you pass away, but a Durable Power of Attorney (DPOA) is a planning tool, or legal instrument, for use during your lifetime to provide for your wishes, if you were to become incapacitated.

A DPOA is a document that gives another person of your designation the right, (or power) to act on your behalf.  Essentially, anything you can do, your attorney-in-fact can do for you.  The Attorney-in-fact is the person who is designated by you, in the DPOA.   A DPOA controls your estate finances.  For example, your attorney-in-fact can act as your representative to withdraw money from your bank account to pay for your hospital bills and pay your mortgage, if you were to become unable to do so, because you became incapacitated.  A DPOA can be temporary or permanent, depending upon your mental and physical state and capacity.

A DPOA is a very important part of successful estate planning, because without someone to act on your financial behalf, you might not have access to resources you need when you need them.  A person who is completely trustworthy should be designated your attorney-in-fact.

  1. Health Care Proxy

A health care proxy (HCP) is similar to a DPOA, except for one thing.  The HCP does not designate someone to make financial decisions on your behalf, if you were to become incapacitated.  Your HCPO designates someone to make medical decisions on your behalf, if you were to become incapacitated.

Choosing a responsible HCP is also very important.  A HCP is someone you can trust to act as you would act, or do as you would do regarding medical decisions.  Oftentimes, family members are not always the best choice.  If a family member is likely to impose their own will, rather than follow your wishes, chose another person as your HCP.

  1. Health Care Directive

A health care directive (HCD) is also known as a living will and is the only document in your basic estate planning package that has no legal power or effect.  A HCD is a document that guides your HCP as to your own wishes and desires for Health Care treatment.  In the HCD, you can choose to list the different types of treatments you want and what treatment you wish to refuse. Since some people would not want to live if their brain was not functioning, for example.  The HCD is the place to tell your HCP your wishes regarding whether or not to resuscitate, in this instance.

Since the HCD isn’t a legally binding document in Massachusetts, your HCP can make decisions that override any provisions in your HCD. However, a HCD is a useful tool that guides doctors and family members during times of medical decision-making.

Advanced Estate Planning

Estates involving over $1 million dollars in assets require something more than basic estate planning.  Massachusetts has an estate tax on estates that exceed $1 million dollars, so tax planning is an important and a valuable tool.  With a proper tax plan, even if your estate exceeds $1 million dollars, estate taxes are often avoided.

Tax planning and advance estate planning typically involves the use of different types of trusts. Tax planning and advance estate planning involves the four documents, used in basic estate planning, plus the use of any additional needed trust instruments.

Estate Planning Costs:

By executing a will and signing a couple other basic documents, you could save your loved ones loads of aggravation and unnecessary expenses.  The value of this is something that can’t be counted in pure dollars and cents.  Nevertheless, the price range for a basic estate plan is wide.  Attorneys will often charge anywhere from $800 to $4,000 for a basic estate plan.

Typically, Attorney Kelly’s fees are very reasonable and will only charge, depending upon your specific situation and other factors like size and complexity of the estate.  Options for pro-bono (free) and reduced fee legal services are also available for those in financial need.

Call the Law Office of Ginger B. Kelly now and schedule your first appointment.  We are a small law office who offers your first confidential consultation is always free.

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ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit, www.attorneykelly.wordpress.com, or call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We can not stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016 by Ginger B. Kelly, Esq., all rights reserved.

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November 4, 2016 · 11:00 am

Slip and Fall, an Icy Tail in Massachusetts

February 19, 2015, (republished February 13, 2017)

It’s official, Worcester County, Massachusetts is the snowiest place in the US.  It’s only February 19th and so far this year we’ve had over 107 inches of snow!  This means that people who live in Massachusetts, particularly in Worcester County, are on double duty to prevent injuries from slip and fall accidents.  Here’s the “scoop” on clearing the snow.

John Cole Northeast American Gothic

In the past, Massachusetts law regarding snow and ice injuries exempted property owners from liability if someone was injured as a result of snow that naturally accumulated and had not been cleared.

However, in 2010 things changed.  Pursuant to Papadopoulos v. Target Corporation, SJC-10529 (July 26, 2010), the Massachusetts Supreme Judicial Court changed this nearly 100-year old rule. Now, Massachusetts property owners must remove snow and ice to protect others and to protect themselves from slip and fall liability.

What does this mean to you?  Homeowners in Massachusetts have a responsibility to clear the snow and ice from their driveways, walkways and other areas of their property. It is important to make sure your family and others, such as friends, postal carriers and delivery workers, can safely visit your property without slipping and falling.  If someone slips and falls on the ice or snow, on your property, you could be held liable for damages even if that person was not invited onto your property.

If you have issues, regarding a slip and fall injury, or snow and ice buildup, ice dams or something under contract, it’s always best to contact your attorney.  If you need an attorney, give me a call.  I always enjoy listening, answering questions and speaking with others.  Your first consultation is free and our driveway and walkway is free and clear of snow and ice. Just sayin’ 😉

ABOUT ME:  Attorney Kelly is an attorney in good standing, licensed to practice in both the Federal District and State Courts of Massachusetts and Rhode Island. Her law practice is focused on consumer debt, finance, bankruptcy and District Court matters. Attorney Kelly is experienced in both criminal and civil trial work. On a personal note, Attorney Kelly enjoys writing and other things, like conservation and agriculture.

To find out more, visit www.attorneykelly.com, or call us at (508) 784-1444.

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NOTICE:  Attorney Kelly does NOT provide legal advice to anyone via social media or anywhere over the Internet.  Any and all electronic posts and writings, by Attorney Kelly, does NOT establish any type of attorney-client relationship, whatsoever, neither perceived, actual, material, implied or other.  We can not stress enough, if you need personal legal advice, always see your attorney.  Do not rely upon Attorney Kelly’s posts, writings or any Internet information on websites or social media for your own personal legal advice.  Seek legal advice and representation from your own personal attorney.

Copyright © 2015, 2016, 2017 by Ginger B. Kelly, Esq., all rights reserved.

1 Comment

February 20, 2015 · 3:33 am