Myth No. 7: If you file for Bankruptcy, you will never be able to get any new credit for anything.

Posted on November 6, 2009 by Kevin Gipson, Attorney at Law

You can get credit after you file for bankruptcy.

It takes time to re-establish credit, but you can if you want to get credit.

I say ” if you want to get credit” because it is a very tempting to start going back into debt.

The main reason you can establish credit after a bankruptcy is because your rights to discharge the debt again if you get in over your head are limited.

First, you cannot file another Chapter 7 bankruptcy for eight years from the date of the filing of a previous .  As a result of the eight year limitation on filing another bankruptcy, many creditors are willing to extend credit to people who have filed for bankruptcy.

The creditor knows that your only option if you get over your head during that eight year period is to file a Chapter 13 bankruptcy where you may have to pay all or part of your debt.

A second reason you can establish credit after filing for bankruptcy is that the creditors know that you have gotten rid of your other debt and are now more likely to be able to repay the newly incurred debt.

If you do decide to re-establish credit you need to take the time and read the terms and conditions of the creditor.

Many times there are high monthly and annual fees as well as high interests rates for post discharge borrowers.

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Bankruptcy Myth No. 6: You can no longer stop a foreclosure by filing for Bankruptcy.

Posted on September 18, 2009 by Kevin Gipson, Attorney at Law

The bankruptcy myth that you can no longer stop a foreclosure proceeding by filing for bankruptcy is simply no true!    Both a Chapter 7 bankruptcy and a Chapter 13 bankruptcy will stop a foreclosure, but with different long term results.

When filing a Chapter 7 bankruptcy or a Chapter 13 bankruptcy you receive a stay of all collection action.

A foreclosure proceeding is a collection action.

Filing of a foreclosure proceeding or going forward with a foreclosure proceeding would violate the bankruptcy stay.

If a creditor wants to file a foreclosure or continue with a foreclosure, it must file a motion with the bankruptcy court to “lift” the stay.

Since we are discussing a foreclosure we are of course discussing a situation where you are behind on your house note.

A Chapter 7 bankruptcy will stop, but only delay a foreclosure since a the Chapter 7 bankruptcy will not allow you to get caught up on the arrearages on the house note.

However, the Chapter 7 bankruptcy will force the creditor to start over with the foreclosure, which in many instances will allow you to stay in your home for several extra months.

A Chapter 13 bankruptcy will allow you to set up a Plan that will require the creditor to begin accepting the monthly payments from you on the future amounts that you owe and at the same time allow you to catch up on the arrearages over a period of 3 to 5 years.  As long as your Chapter 13 bankruptcy plan is confirmed and you make your payments, you will be able to keep your house.

The issues of bankruptcy as a way to avoid or delay a foreclosure are too complex for any more than a very general discussion here.

I provide a free 30 minute consultation to discuss whether bankruptcy is an option for you and also to assist you in deciding what type of bankruptcy is best for you.  

Give me a call!

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They Went Broke Too! Jasmine Guy.

Posted on September 18, 2009 by Kevin Gipson, Attorney at Law

JasmineGuy3Jasmine Guy, best known for her role as Whitley Gilbert in the late 80’s, early 90’s TV series,  A Different World,  has filed for Chapter 13 bankruptcy.

The bankruptcy results in part from financial problems following a recent divorce.

A Chapter 13 bankruptcy allows an individual to repay their debts over a period of 3 to 5 years.

The bankruptcy is filed in the Central District Bankruptcy Court for California under Court Docket Number 09-15561.

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They Went Broke Too! William Jefferson

Posted on September 1, 2009 by Kevin Gipson, Attorney at Law

William JeffersonRecently convicted U.S. Representative William “Bill” Jefferson, has filed for Chapter 7 bankruptcy protection along with his wife. 

The bankruptcy was filed on August 27, 2009 in the Bankruptcy Court for the Eastern District of Louisiana, which is the bankruptcy court that is located in New Orleans.

The Docket Number for Mr. Jefferson’s case is 09-12725.

The Meeting of Creditors is set for October 2, 2009 at 11:30 a.m. at the F. Edward Hebert Federal Building in New Orleans.

It is extremely unlikely that the forfeiture order for $470,000 in bribery receipts will be discharged.  Debts that result from criminal conduct normally must be paid.

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Myth No. 5: The Bankruptcy Court will take all of your property if you file.

Posted on September 1, 2009 by Kevin Gipson, Attorney at Law

One of the biggest misconceptions about bankrputcy is that the Banruptcy Court will take your house, car and belongings when you file and sell them to pay your creditors.

The truth is that most people who file for bankruptcy keep everything that they owned before they file.

This is for several reasons:

1) All states have either state exemption laws or federal exemption laws that allow you to keep your belongings.

Pretty much anything you use on a daily basis, clothes, furniture, your TV, computer, etc. will remain in your possession. Most states also have a homestead exemption that protects at least a portion of the equity in a house, and also an exemption for a vehicle, although these exemptions vary from state to state.

2) Even if an item of property is not specifically exempt from seizure, many times the item is not of a value that would make it worth the Trustee’s time and effort to seize it and sell it. In legal terms, the property is “not worthy of administration”.

3) Secured debt such as a house or a car has a lien on it. Therefore, for a Trustee to sell a house or a car to benefit your unsecured creditors, there would have to be enough equity in the house or car to pay off the secured creditor and still justify selling the property for the unsecured creditors.

Also, for many people these days, they may have little equity or no equity in their house and or their car. The legal term for this is that the property is “encumbered beyond its value”.

Get the facts. I am available to answer your questions about bankruptcy and creditor questions.

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Myth No. 4: The IRS Will Audit Your Prior Tax Returns If You File For Bankruptcy.

Posted on July 28, 2009 by Kevin Gipson, Attorney at Law

I am unsure how the myth came into existence that the IRS will audit prior tax returns if you file for bankruptcy.

This is simply just not true!

I have been in practice for 23 years and have never had a bankruptcy where the client had their tax returns audited.

So, how does the issue of your taxes come into play in a Bankruptcy?

  • Tax debts are considered to be Priority Debts.   Depending upon how old the tax debt is, it will often have to be paid even if you file bankruptcy.   There are circumstances where the tax debt can be discharged, but that is a topic for another day. 
  • When you file for a bankruptcy, you must provide a copy of your most recent tax returns to the Trustee appointed to review your case.  Also, depending upon local practice, two years of tax returns may be required.  
  • In a Chapter 13 Bankruptcy, the debtor must have filed his tax returns for the four years leading up to the bankruptcy in order to get his Chapter 13 Plan confirmed.  Also, depending upon local practice, the debtor may be required to verify in writing that he has filed his taxes.

The message here is don’t let rumors and misinformation keep you from filing for bankruptcy.  Get the facts from an experienced bankruptcy attorney.

I do not charge for initial consultations.

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Myth No. 3: Credit Card Debts Can No Longer Be Discharged In A Bankruptcy.

Posted on July 26, 2009 by Kevin Gipson, Attorney at Law

One of the misconceptions some clients have is that credit card debts can no longer be discharged in a Bankruptcy.

This myth comes from changes in the Bankruptcy Code from when the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was enacted in October 2005.

As part of BAPCPA, a fairly small percentage of people filing for bankruptcy that could have filed a Chapter 7 bankruptcy and gotten rid of their credit card debt under the old law now had to pay some percentage of their credit card debt in a Chapter 13 bankruptcy.

For most people, BAPCPA made no change for them and they are still allowed to file a Chapter 7 bankruptcy and get rid of their credit card debt.

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Myth No. 2: You Can Only File For Bankruptcy Once.

Posted on July 24, 2009 by Kevin Gipson, Attorney at Law

You can only file for Bankruptcy once!  This is not true.

However, there are limitations on how often you can file a bankruptcy.

If you have received a discharge in a Chapter 7 bankruptcy, you cannot file for a Chapter 7 bankruptcy again for 8 years.

You can file a Chapter 13 bankruptcy in less than 8 years from a Chapter 7 bankruptcy, however, if the Chapter 13  bankruptcy is filed within 4 years of the discharged Chapter 7  bankruptcy, you cannot receive a discharge in the Chapter 13 bankruptcy.

There are other limitations on the frequency of filing bankruptcy which may or may not apply to your particular facts and circumstances.

An experienced bankruptcy attorney can assist you in determining your rights under the Bankruptcy Code.

by , New Orleans, Louisiana bankruptcy lawyer.

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Myth No. 1: You Can No Longer File For Bankruptcy.

Posted on June 19, 2009 by Kevin Gipson, Attorney at Law

Since the bankruptcy laws were changed in October of 2005 I have had several clients that were told they could no longer file for Bankruptcy.

This is simply untrue, but with almost four years since the changes in the bankruptcy laws, I still get the occasional client that comes in and tells me that they were told they could not file for bankruptcy.

Sometimes it is a friend or collegue that provides this information, sometimes it is a debt collector. Whatever the source may be, the fact remains:  You Can Still File For A Bankruptcy!

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) did make some changes that limit the type of bankruptcy a debtor can file. As an example, some debtors that could file for a Chapter 7 bankruptcy under the old law must now, because of their income, file a Chapter 13 bankruptcy.

Also, there are now a number of time delays that may either require more time to pass between bankruptcy filings or limit your protection under the bankruptcy laws.

However, let me say it again: You Can Still File For A Bankruptcy!

If you have any questions about whether or not you can file for a bankruptcy, contact an experienced bankruptcy attorney.

I provide a free initial consultation to new bankruptcy clients and would be happy to discuss your case with you.

by , New Orleans, Louisiana bankruptcy lawyer.

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Myths About Bankruptcy!

Posted on June 3, 2009 by Kevin Gipson, Attorney at Law

I am often surprised by some of the misconceptions that people have about bankruptcy.

Below are some of the more common bankrutpcy myths that I have heard:

  1. You can no longer file for Bankruptcy.
  2. You can only file for Bankruptcy once.
  3. Credit card debts can no longer be discharged in a Bankruptcy.
  4. The IRS will audit your prior tax returns if you file for Bankruptcy.
  5. The Bankruptcy Court will take all of your property if you file.
  6. You can no longer stop a foreclosure by filing for Bankruptcy.
  7. If you file for Bankruptcy, you will never be able to get any new credit for anything.
  8. You can never own a home if you have filed for Bankruptcy.
  9. If you already own a home you must give up your home if you file for Bankruptcy.
  10. You can pick and choose the debts to be included in your Bankruptcy case.
  11. You can pick and choose the property you tell the Bankruptcy court about when filing a Bankruptcy.
  12. You don’t need a lawyer to file for Bankruptcy because all it involves is filling out a bunch of forms.
  13. You can give or transfer property to a relative or someone else you know before filing for Bankruptcy, and that person you gave the property to will be able to keep it.
  14. Income tax debt cannot be discharged in a Bankruptcy no matter how old it is.
  15. If you’re married, both spouses have to file for Bankruptcy.
  16. Only deadbeats file for Bankruptcy.
As I previously stated, these are the most common myths about Bankruptcy that I hear.

In future articles, I will give you the true facts about Bankruptcy.

by , New Orleans, Louisiana bankruptcy lawyer.

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