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Lien Removal via bankruptcy

MortgageLaw

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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Filed under Auto Loans, Bankruptcy, Chapter 7, Collection, credit card debt, Debt, Debt Collection, Empowerment, Execution, Filing, Judgements, Law, Lawsuits, Legal, Legal Rights, Liens, Massachusetts, Massachusetts law, Mortgages, Rhode Island, Short Sale

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

o-LAWYER-CLIENT-facebook

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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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

Boxing gloves business woman angry
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

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.

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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.

~~~~~~~~~~~~

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.

~~~~~~~~~~~~

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