Tag Archives: Massachusetts

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

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

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

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.

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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

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.

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

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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Filed under Law, Legal, Massachusetts, Massachusetts law, New Law, News, Trending

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.

2 Comments

November 4, 2016 · 11:00 am

Debt Collection and 7 Deadly Sins

seven-deadly-sins by Drew Fairweather

Every year thousands of consumers get sued by debt collectors.  Beating a debt collection lawsuit is easier than most people realize.  Most of the time, the biggest issues people face are their own shortcomings.  Legal strategies are great, but they serve no good when people are paralyzed by fear, anger, sloth, envy or a number of deadly sins regarding dealing with debt collectors.

 1. Sloth    

The number one mistake defendants make when they are sued for a debt is giving up.  Doing nothing is a form of sloth.

Failing to respond to a summons and complaint, is most certainly the number one reason why most people lose and have default legal Judgments entered against them.  On the other hand, responding to a lawsuit opens the door to many promising things, like stopping collections, wage garnishments or a levy (taking money from your bank account).

Even if you owe the collector money, a two-sentence response simply denying liability to the lawsuit filed in court will tilt the scales in your favor.  Always do your best to consult a lawyer, first.  Even so, filing a response to the lawsuit is called an “Answer,” with the Clerk of Court, is generally the easiest first step to take.   Check your timelines on this.  Some jurisdictions only allow 10 to 20 days to respond after service of process, which also means after the defendant receives a notice and summons.  Keep an Answer simple and to the point.  Never ever make an admission.

Ask your Clerk of Court questions about the forms used to file an Answer or how to file an Answer.   Typically, Clerks are super helpful but keep in mind that they are never allowed to give legal advice.

Give up sloth.  Put one foot in front of the other, seek legal help and file an Answer with the Court and your chances of winning increase exponentially!

2. Pride

Debtors who give up on Collections lawsuits almost always have regrets.   Life after answering the notice and complaint involves a little bit more than simply showing up.  But it’s not that difficult.  One of the things that must be done is to challenge the collector’s ability to sue.  However, a defendant can never challenge anything effectively when pride gets in the way.

Pride steps in and wreaks havoc with our positive energy.  Pride opens door to excuses as to why we can’t or don’t want to move forward.  Pride paves the way for doing nothing.

The term, “Standing” means the legal right to sue.  Some collectors, also known as debt buyers, or junk debt buyers, often buy debt for pennies on the dollar.  They try to file lawsuits (or sue) against debtors to collect money on the debt that they buy.  When asked, collectors must prove that they have the legal right to collect.  Without the legal right to sue, debt collectors lack standing.  Standing is typically shown by a transfer or assignment of the original, signed credit card agreement from the initial creditor to the debt collector or debt buyer.  Many don’t have a signed transfer agreement.  Many don’t have a signed, initial credit card agreement.  When when the collector doesn’t produce a proper assignment or agreement, or the document they produce is inaccurate or not an original, a defendant can ask for the case to be dismissed, because of “lack of standing.”

Asking the Court (Judge or Magistrate) to dismiss a case, based on lack of standing or lack of chain of custody of paperwork is usually pretty straightforward.  Your lawyer will help you.  Chain of custody means that the collector must prove that they are, in fact, the ones who were transferred the initial signed agreement.

On a few occasions, I’ve noticed judges look at the paperwork collectors provide and comment, “you must be joking.”  On the other hand, some judges look at the paperwork and think, “It’s all good.”  It’s not always easy to tell the results, at least in Massachusetts.  Every jurisdiction is a little different.  If challenges aren’t raised, like a challenge to standing, the lawsuit is lost, plain and simple.

In essence, even when the effort is made to attend a debt collection lawsuit, pride can strangle all positive energy and be a reason for making excuses for not demanding the debt collector show you why they have any legal authority to ask you to pay them money.

3. Greed.

I’ll never understand why defendants never challenge the amount owed on a debt. Seriously, greed is more common than most people realize.  Often human beings become so greedy with time and energy, they can’t even ask simple questions.  Challenge the accuracy of the calculations on the debt and combat being paralyzed by greed.

When your lawyer, or you, choose to challenge the accuracy of the debt, the Judge or Magistrate will require the debt collector to show the original signed documents and all the paperwork. This means that the paperwork must prove the balance of the debt, from the first day to the present.  Every defendant has a right to know how an amount allegedly owed is calculated and why.  Be vigilant and ask for accurate figures on the debt.

More often than not, debt collectors miss documents or miscalculate and are not accurate.  Because debts typically change hands multiple times, it is very likely there will be some errors in the figures and documents.  If there are errors in the case, a defendant may ask for the case to be dismissed.

In a 2015 news article, a former employee of a major creditor mentioned that as many as a quarter of the files showed incorrect amounts owed.  If the credit card issuers can’t provide accurate documentation, there’s an excellent chance you will win.

4. Wrath.

 Yes, debt collectors make us mad.  However, many people get so angry that they do nothing.  Anger (like most negative emotions) paralyzes us from doing the right thing.  It’s easy to change this negative emotion by talking to your lawyer and by making solid plans to challenge the lawsuit against you in a timely manner.  Don’t let wrath, or any other negative emotions kill positive energy.

In Massachusetts, in most cases with a few exceptions, creditors have a maximum of six years to collect on most credit card (revolving) debt.  Other states and jurisdictions are different.  Ask your lawyer about the Statute of Limitations in your jurisdiction.

The Statute of Limitations is an awesome defense to have in your legal defense tool box, so to speak.  Sometimes, collectors don’t stop collecting and taking people to court, even after the Statute of Limitations has run out.  The reason is because debt collectors are hoping and assuming people don’t want to be bothered and they won’t show up in Court.  This is true.  But defendants who raise the Statute of Limitations defense will typically win.  With a solid Statute of Limitations defense, the Court will recognize that the debt can no longer be collected upon and, like magic, a Court will dismiss a collections lawsuit.

It is important to know how to legally apply this handy dandy tool.  Also, paying or agreeing to pay on an old debt may start the Statute of Limitations clock ticking all over again.  Never pay on an old debt without first consulting a good lawyer.  If the Statute of Limitations has expired, and it is used properly and timely as a viable defense, a collector stands a good chance of losing.

Tame the wrath by fighting fairly and civilly.  Wrath turned around and channeled into controlled, positive, motivated beneficial action is a very good thing, indeed.

5. Gluttony.

 Plain and simple, most everyone has the right to take action against collectors, but they don’t.  This could simply be a matter of gluttony?  Perhaps.  Retaining paralyzing feelings of grief, powerlessness, becoming overly indulgent in thoughts that are self-critical, are negative negative feelings.  Self indulgence is a form of gluttony.  Gluttony is crippling. The negative energy of gluttony gets in the way of taking positive action.

There are rules and laws, under the Fair Debt Collection Practices Act (FDCPA) that may turn the tide in your favor and help you to turn gluttony into positive energy.  If you have consulted a good lawyer, chances are that you may be able to discuss the odds of getting a good money award from a debt collector if they violated any part of the FDCPA.  People who successfully sue for violations of the FDCPA may be entitled to receive from the collector, statutory damages of $1000, plus punitive and economic damages, and even attorney’s fees and costs.  Extra money is always a welcome bonus!  This is also a good reason to hire a good consumer defense and bankruptcy attorney who can help.

Pity and self-gluttony have no place if you want to win a lawsuit.  Snooze and you lose. This is the very thing debt collectors are counting on.

6. Lust.

Lust is a big one.  Have you ever been around someone who loves themselves so much, they think they can do things all by themselves, when they really need help?  It is very important to become a smart consumer and know when to find help.  Smart people tend to kick lust to the curb.  Call a professional to get the best results possible.  In other words, bring out the big guns.

Once a collector is notified that you are represented by an attorney, it’s usually all over.  Most collectors are more than anxious to settle a debt, out of court, rather than fight over it with a lawyer.  Hesitating hiring a lawyer will only serve to reduce your chances of winning, significantly.

Attorneys who regularly take these types of cases will typically offer a free consultation.  On some occasions, they may represent you for free if they think the collector has broken the law.  This is because the attorney will expect to collect their fees from the collector.  Most people don’t know this.

Lust has no place for winners.  Fighting a legal battle with expert help makes sense.

7. Envy  

Most people think Bankruptcy is for “those” people.  If you really believe that Bankruptcy is for those pitiful people who have no common sense or self control, or for people who want to take advantage of the system, guess again.  Bankruptcy laws are designed so that fraudulent claims are virtually non-existent.  Furthermore, some of the most successful people in our country legitimately and legally have filed successful Bankruptcy Petitions, for very good reasons.

Everyone makes mistakes and goes through struggles in life.  How people overcome and manage those struggles makes all the difference.  In the US today, we are lucky enough to have Bankruptcy law.  Think of Bankruptcy as a beneficial tool, a way to move forward, unlike envy that will hold most of us back.

Bankruptcy often is the best solution because it will not only give a person a fresh start, Bankruptcy will also stop all collections.  The day a Bankruptcy Petition is filed with the Court, a person will be protected from all collection efforts by something called an “automatic stay.”

See if Bankruptcy is an option suitable for you.  A good lawyer will be happy to guide you to make the very best decisions for you.

Tip:  Monitor your credit scores and credit reports from time to time to see where you stand.  You are entitled to one free annual credit report from all three major credit reporting agencies, each year.  Search on the Internet or ask your lawyer or certified public accountant (CPA) how to obtain a free credit report and do this, annually.

Being paralyzed by any of these deadly sins happens to the best of us.   Indulging in any one of these things will greatly reduce the odds in your favor.  Vigilance, by taking action now, is your best path to success.

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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.squarespace.com or www.attorneykelly.wordpress.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 © 2016 by Ginger B. Kelly, Esq., all rights reserved.

4 Comments

Filed under Bankruptcy, Civil, civil law, Debt, Debt Collection, Law, Lawsuits, Legal, Massachusetts, practical stuff, Trial