Some people assume that bankruptcy is like a magic wand that will make all your debts disappear. The truth is that there are a few debts — student loans and child support arrears, for example — that are not typically dischargeable in bankruptcy. Most people, even some lawyers, think that tax debt cannot be discharged in bankruptcy. It can. After our consultation I can give you get a better idea of which of your debts can and cannot be dealt with through bankruptcy.  More bankruptcy information can be found at www.dlblaw.com

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How do you find the right bankruptcy attorney?  This is a common question.  I ran across this article recently that may be of interest written by Orlando bankruptcy lawyer and Chapter 7 Trustee, Lori Patton. An experienced bankruptcy lawyer will not be offended and will be happy to answer them:

1. How much of your practice has been bankruptcy since the new law hit in 2005? (the answer needs to be at least 50% or higher)

2. How many bankruptcies have you completed since the law changed in 2005?

3. Did you do bankruptcy before the law changed? If yes, how many years of experience?

4. Are you involved in any voluntary bankruptcy bar groups? (The answer to this really needs to be at least NACBA –National Association of Consumer Bankruptcy Attorneys-)

5. Do the local bankruptcy judges know who you are? (you need a “yes” for this one)

6. Can you name all of the local Chapter 7 Trustees and do they all know who you are? (you need a “yes”)

7. Who is the local Chapter 13 Trustee and does he/she know who you are?

8. Who is the United States Trustee for this area and do they know who you are?

If the bankruptcy lawyer you are considering trusting with your major lifetime event cannot comfortably answer these questions to your satisfaction, it may be a sign to move on and find someone who can.  http://www.nationalbankruptcyforum.com/hiring-a-bankruptcy-lawyer/choosing-a-bankruptcy-lawyer-eight-questions-to-ask-before-signing-the-fee-agreement/

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I get this question a lot from my clients.  If you are in a financial crisis here are a couple of ideas that may be useful:

PAY DOWN CREDIT CARD DEBT: Use your refund to pay off old debt. Usually the best bet to pay on is consumer credit debt (i.e. Credit Card debt)  this type of debt has the highest interest rates associated with it.  Remember it’s a bad idea to use the money to incur new debt, like a down payment on a new car, if you are in a financial crisis.

PAY FOR YOUR BANKRUPTCY:  Unfortunately filing for bankruptcy cost a bit of money.  Filing fees are up as are the other fee’s associated with bankruptcy.  Consult with an experienced bankruptcy attorney whom can advise you on the best options for use of tax returns since some acts, like repaying a family member, can be a problem to filing your case.

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Press Release

For Immediate Release

 Orem, UT - Douglas L. Barrett of Orem has been named for the seventh consecutive year as one of the top bankruptcy lawyers in Utah in a recent poll conducted by Utah Business, a state-wide publication. The announcement was made in the January 2012 Edition of the magazine. The "Legal Elite" represent those Utah lawyers who their peers believe are the very best in their respective areas of practice.

 Barrett was selected for his expertise in "Bankruptcy Law" Barrett received his undergraduate degree from Brigham Young University at Provo in 1993 and graduated from Whittier Law School in 2000, where he was a distinguished member of the Moot Court Honors Board. During law school he interned as a Law Clerk for the Hon. James N. Barr, U.S. Bankruptcy Court Judge for the Central District of California. After graduation from law School he served as Law Clerk for the Hon. Lee M. Jackwig, Chief Judge U.S. Bankruptcy Court for the Southern District of Iowa.

 Mr. Barrett opened his own bankruptcy practice in Orem in 2001. He is well known for his aggressive representation of consumer debtors. During the past several years he has helped hundreds of people file for bankruptcy protection in the U.S. Bankruptcy Courts. He is a member of the National Association of Consumer Bankruptcy Attorneys and has been a frequent speaker on consumer bankruptcy law and personal finance issues throughout the state.

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If after confirmation of a Chapter 13 Bankruptcy plan, circumstances arise that prevent the debtor from completing the plan the debtor may be able to obtain a hardship discharge. In such situations, the debtor may ask the court to grant a "hardship discharge." 11 U.S.C. § 1328(b). Generally, such a discharge is available only if: (1) the debtor's failure to complete plan payments is due to circumstances beyond the debtor's control and through no fault of the debtor; (2) creditors have received at least as much as they would have received in a chapter 7 liquidation case; and (3) modification of the plan is not possible. Injury or illness that precludes employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge.

In Chapter 7 the hardship discharge is more limited than the discharge described above and does not apply to any debts that are nondischargeable. 11 U.S.C. § 523. More information on Utah bankruptcy can be found at www.bankruptcyprovo.co

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Yes. Actually there are two required classes you must complete in a Utah bankruptcy. The first class, Credit Counseling, informs you of all your options and advises you if bankruptcy is a good option. This class can be taken over the internet. This must be completed at least a day before your case can be filed with the bankruptcy court. See www.cricketdebt.com for more information on classes and class content.

After your case is filed, you must complete a Financial Management class. This class will help you learn to budget your money, avoid the pitfalls that may have led to your bankruptcy filing, and help you to re-establish credit in the future. This course is also offered over the internet and must be completed before your case is over. If you fail to take the class you will be denied your discharge of debt in your bankruptcy. The Law Office of Douglas Barrett, LLC located in Orem, Utah can help you find the class that is right for you to file your Utah bankruptcy. Visit us on the web at www.dlblaw.com

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One of the most common issues that my clients have is that they want to file for bankruptcy but they don’t have the money to do so.  Here are a couple options on how you can get money to pay your attorney:

Stop Paying Certain Bills:

If you are going to file for bankruptcy then there is little or no need for you continue to pay some bills.  Stop paying some of your unsecured debts, mostly your credit cards, and save that money to use for an attorney.  Don’t stop paying your utility bills, insurance, car payments (unless you are going to surrender the vehicle), or mortgage (unless you are going to surrender the home).

Sell some Assets:

If you don’t have the necessary money in the bank then you could sell some of your assets in order to file for bankruptcy.  Don’t sell these assets at below fair market value or to friends and family members.  If you have an mutual funds or stock accounts then you could sell or liquidate them to pay for your bankruptcy legal fees.

Ask Friends and Family to Help:

If you cannot come up with the money on your own then it may be time to call upon family and friends for a favor.  Inform them of your situation and ask them if they would be willing to help you out.

It is well worth the effort to come up with the money to pay for your bankruptcy legal fees.  Having your case done right with a successful outcome is well worth the price.  More information on filing bankruptcy in Provo can be found at www.Bankruptcyprovo.co .

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The Judicial Conference of the United States adopted a new court fee schedule on September 13, which will become effective November 1, 2011. The revenue generated by the fee change will go into the Judiciary’s budget.

The new filing fees will be:

·         Chapter 7: $306.00

·         Chapter 11: $1046.00

·         Chapter 13: $281.00

More Information on Utah Bankruptcy can be found at www.dlblaw.com

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The Principal Paydown Plan calls for a restructuring in Chapter 13 bankruptcy of certain underwater mortgages. 

Under this approach, homeowners will be able to eliminate negative equity, acquire modest equity and then reamortize the mortgage into a market rate loan.  The reduction of principal is not achieved by a cramdown, but rather by temporarily reducing the interest rate to 0% so that all payments made by the homeowner are applied to pay down the principal.  In exchange for this benefit, the homeowner would have to agree to a general settlement of claims against the servicer, trustee and investor.  This Plan will achieve a significant improvement in the overencumbered status of the home; provide needed and justifiable hope for the homeowner, many of whom have a legitimate claim against the servicer; and stabilize individual communities across the country, as well as the overall housing market.

This legislation is being sponsored by NACBA the National Association of Consumer Bankruptcy Attorneys.   More information on Chapter 13 Bankruptcy in Utah can be found at www.utahchapter13.com  

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PRESS RELEASE

For Immediate Release

Orem, UT – The Law Office of Douglas L Barrett, LLC announced the launch of their newest website www.Bankruptcyprovo.co .    The new site is geared to our clients in Provo Utah seeking up to date information on Utah Bankruptcy matters and Bankruptcy matters in general. The site includes video information and includes a link to download Attorney Douglas Barrett’s latest book The insider’s guide to filing bankruptcy in Utah.  This site joins the other informational sites provided by Mr. Barrett’s law office.

Barrett received his undergraduate degree from Brigham Young University at Provo in 1993 and graduated from Whittier Law School in 2000, where he was a distinguished member of the Moot Court Honors Board. During law school he interned as a Law Clerk for the Hon. James N. Barr, U.S. Bankruptcy Court Judge for the Central District of California. After graduation from law School he served as Law Clerk for the Hon. Lee M. Jackwig, Chief Judge U.S. Bankruptcy Court for the Southern District of Iowa.

Mr. Barrett opened his own bankruptcy practice in Orem in 2001. He is well known for his aggressive representation of consumer debtors. During the past several years he has helped hundreds of people file for bankruptcy protection in the U.S. Bankruptcy Courts. He is a member of the National Association of Consumer Bankruptcy Attorneys (NACBA) and has been a frequent speaker on consumer bankruptcy law and personal finance issues throughout the state.

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The following are tips that can help you succeed at a Utah Chapter 13 Bankruptcy:

·         Make all plan payments on time;

·         Keep your mortgage payments current, and the car - if that is being paid outside of the plan;

·         Take the required Personal Financial Management class early in your Plan period;

·         If you owe child support or alimony/maintenance you cannot fall behind on any payments.  At least by the end of the plan period all such payments must be current. The Debtor must file a certificate that these obligations are current, otherwise the Court will not enter a discharge;

·         Do not fall behind on new tax obligations during the plan period;

·         Don't incur significant new debt without court approval;

·         Keep current insurance on any asset that is collateral for a debt;

·         Provide the Trustee with information about change in income;

·         Provide the Trustee with copies of annual tax returns.

More information on Orem Utah Chapter 13 Bankruptcy can be found at my website www.utahchapter13.com

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Prior to filing for bankruptcy protection I suggest you obtain your credit reports.  You are entitled to a free credit file disclosure (credit report) once every 12 months from each of the three nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. 

You may request your free credit reports online at www.annualcreditreport.com .   You will be asked questions to authenticate your identity such as creditor names, loan payment amounts, employers and addresses.  If you cannot obtain your free credit reports online, you may request your report by phone or request your report through the mail. Free credit reports requested by phone or mail will be processed within 15 days of receiving your request.  To request your credit report by phone, call 1-877-322-8228. You will go through a simple verification process over the phone. Your reports will be mailed to you within 15 days.  To request you credit report by mail, download the request form, print and complete the form, mail the completed form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

More information on filing for bankruptcy in Utah can be found at my website www.utahchapter7.com

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NATIONAL ASSOCIATION OF CONSUMER BANKRUPTCY ATTORNEYS ISSUES RESPONSE TO OBAMA ADMINISTRATION PLAN TO SELL VACANT AND ABANDONED PROPERTIES IN FORECLOSURE

WASHINGTON, D.C.///August 12, 2011///National Association of Consumer Bankruptcy Attorneys (NACBA) President William Brewer today issued the following statement in response to the announcement on Wednesday by the Obama Administration that it is looking at developing a plan to sell vacant and abandoned properties owned by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) as rental properties:

“While there is value in cleaning up the abandoned and vacant foreclosed homes that are a blight on communities across the country, I question why the Administration isn't more concerned about avoiding preventable foreclosures in the first place.  Otherwise, you are looking at a situation here of closing the barn door after you’ve let the cows escape.  When provided the opportunity to embrace a plan for judicial mortgage modification in the early years of the foreclosure crisis, the Administration instead relied on voluntary efforts of the servicers to modify mortgages.  Their solution – HAMP – is a proven failure with serious nationwide consequences.  More than 2.5 million homes were foreclosed on through 2009 and another 8 million are projected to be foreclosed on by the time the crisis abates.  So, now we have only a plan to clean up the wreckage inflicted by a bad policy decision that went against US consumers exactly as many forecasted it would.

NACBA urges the Administration to take on the bigger challenge of finding ways of avoiding preventable foreclosures in the first place, rather than just cleaning up the mess after the fact.  Toward that end, we have presented the Administration with one possible option, the so-called “Principal Paydown Plan,” under which an undersecured mortgage would be restructured in a Chapter 13 bankruptcy so that the homeowner would immediately start paying down the loan principal and reduce negative equity by reducing the interest rate to zero percent for five years.  At the end of this five-year period, the remaining principal balance would be amortized over 25 years at the Freddie Mac survey rate. Leading housing economists have consistently cited the problem of negative home equity as a key factor pushing up the foreclosure numbers.

Not every individual foreclosure can or should be stopped, but there is an urgent need to stem the crisis by closing the growing chasm between prevention and losses. Without stronger policy intervention, not only will millions of families lose their homes unnecessarily, but massive foreclosures will continue to destroy communities, drag down the housing market, and keep a full economic recovery out of reach.  It’s time for the Obama Administration to stop focusing on disaster relief and instead put its energies into disaster prevention when it comes to the U.S. foreclosure crisis.”

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Orem, UT - The Law Office of Douglas L. Barrett, LLC provides bankruptcy legal representation for seniors who have become overwhelmed by the burden of their debts. We meet with seniors everyday who are concerned about the social stigma attached to bankruptcy. We listen to their compelling stories of trying to make ends meet for years before realizing that the credit industry has stacked the cards against them. We are helping seniors understand that millions of fellow seniors have filed bankruptcy in order to get the fresh start they deserve after a lifetime of honest work and generosity to our country.  If you are a senior citizen with overwhelming debt, or if you have an aging parent or grandparent who is considering bankruptcy, contact the bankruptcy attorney at the Law Office of Douglas L Barrett, LLC.  801-221-9911 call today.

How Bankruptcy Can Help

•             Eliminate medical and pharmacy bills

•             Eliminate credit card debt

•             Eliminate consumer bank loan debt

•             Stop harassing collections calls and mail

•             Protect savings, pensions, and retirement accounts

•             Save your home from foreclosure

More information on bankruptcy can be found at www.dlblaw.com

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Just ran across an interesting list of musicians that have filed for bankruptcy protection in the past few years.  As you will note the reasons to file are wide ranging just like we find with our clients. 

Mick Fleetwood

By the early '80s, Fleetwood Mac's drummer had sold more than 55 million albums and was selling-out tours all over the world. While his band mates were able to hold on to their wealth, Fleetwood filed for bankruptcy in 1984. He blew millions on real estate (including a $1.8 million farm in Australia and a$400,000 home in Hawaii) and failed restaurants. Oh... and drugs. Fleetwood estimates he spent $8 million on cocaine. He saved a bunch of money by kicking his habit in '91, then he got the band back together for a '90s bailout tour, which put an estimated $3.5 million in his pocket so he could get himself on his feet again.

Meat Loaf

Meat Loaf's 1977 album "Bat Out of Hell" earned him millions of dollars, but his managers were stealing most of it before he could see it. When he found new representation, the old managers had Meat's assets frozen and sued him for breach of contract. He was forced to file for bankruptcy in 1981. He made a new album to dig himself out of debt. No luck. It bombed, and the Loaf went bankrupt a second time.

TLC

Tionne "T-Boz" Watkins, Lisa "Left Eye" Lopes, and Rozonda "Chilli" Thomas were about to record their sophomore album, "CrazySexyCool," when Lopes set her boyfriend's house on fire in an alcohol-induced rage. The album ended up selling more than 11 million copies, but it wasn't enough to save the band from bankruptcy. They were on the hook for $3.5 million of debt from Lopes' arson, Watkins' medical bills (she suffers from sickle cell anemia), and a bad record deal. The band never fully recovered, and on the eve of the release of their fourth album, "3D," Lopes was killed in a car accident in Honduras.

Marvin Gaye

The Motown legend lost his fortune like a lot of dudes... in a divorce. Gaye's wife, Anna (sister of Motown founder Berry Gordy), filed in 1975, and Gaye agreed to give her royalties from his next album as his alimony payment. "Here, My Dear" was released in '78 and was filled with intimate, angry details of Gaye's failed marriage. It tanked. Gaye also owed money to the IRS and a few drug dealers. He filed for bankruptcy in 1979 and ended up living in a van in Hawaii. He was shot to death by his father in 1984.

Willie Nelson

Long before Wesley Snipes decided he didn't need to pay the IRS, Willie Nelson was dodging the tax men. In 1990, they caught up with him. Nelson's real estate (in six states) and bank accounts were seized in order to pay his $16.7 million tab. That didn't close the gap entirely, so he released an album called "The IRS Tapes: Who'll Buy My Memories" to settle the matter for good. By 1993 Nelson was IRS-free.

Cyndi Lauper

Cyndi Lauper got her bankruptcy out of the way before she made a bunch of money. Prior to releasing her 1983 multiplatinum debut, "She's So Unusual," Lauper held down a bunch of odd jobs and released a 1980 album with her band, Blue Angel. Predictably, it bombed and led to the firing of their manager. You know what happens here: manager sues band, band goes broke, Lauper files for bankruptcy. The good news? By the time she got her '81 solo deal, she had lots of money for thrift shop clothes.

Andy Gibb

The baby Gibb was riding high in the late '70s with such disco hits as "Shadow Dancing," "I Just Want to be Your Everything," and "(Love Is) Thicker Than Water." He even dated "Dallas" star Victoria Principal. By the '80s though, Gibb was drug-addicted and reduced to playing gigs in hotel casinos. He went broke in 1987 and died within the year.

Isaac Hayes

Hayes' "Black Moses" was a critical and commercial success in the early '70s. His theme for "Shaft" won him an Oscar, and his album "Hot Buttered Soul" (released in late 1969) is considered a milestone for soul music. Despite the sales, Hayes' record label, Stax, was in dire financial straits and not paying him. Hayes, in turn, was not paying the bank that loaned him money. And so the drama began. Hayes sued Stax. The bank sued Hayes. $6 million in debt, he lost his house and all royalties to his music. Some 20 years later, Hayes' 1997 debut as "South Park's" Chef helped get him back in positive cash flow.

Tom Petty

Tom Petty's 1979 bankruptcy became a negotiating ploy against The Man. In this case, "The Man" was MCA Records, which bought Petty's indie label, Shelter Records. Petty didn't want to go to a new label without consent. The bankruptcy allowed him to negotiate a fresh deal with his new label home. The first album under the new arrangement, "Damn the Torpedoes," was Petty's biggest album to date. We presume he spent the money wisely.

More information on Utah Bankruptcy can be found at www.dlblaw.com

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A writ of garnishment is the most common method of collection in Utah. It allows the creditor to garnish someone's wages, meaning they'll get a portion of that person's paycheck until the debt is paid. In most cases the maximum amount that can be garnished from a paycheck is 25% of the check gross.  If child support is involved this percentage can be higher.

To obtain a writ of garnishment, the creditor must properly identify where the debtor works. They must then pay a fee to have someone, like a constable, serve legal papers to the debtor's employer. The employer then deducts money from the debtor's paycheck and sends the creditor a check.

However, if the debtor quits or loses his job, there's no paycheck to pull from, no money to be had. And, since only a certain percentage of the debtor's paycheck can be garnished at any given time, if anyone else is garnishing his wages — the creditor must wait in line.

Information of stopping a Utah wage garnishment can be found at www.utahchapter7.com  

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No! The 2005 changes to the bankruptcy laws require a debtor remain current on all domestic support obligations such as alimony or spousal maintenance, and child support, throughout the duration of the bankruptcy.  If a debtor falls behind on his or her domestic support obligations during bankruptcy, the bankruptcy could be dismissed or converted from a Chapter 13 to a Chapter 7 proceeding. Visit us at www.UtahChapter13.com  for more information on bankruptcy in Utah.

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PERSONAL BUDGET: The Envelope Accounting System

In my law practice I have realized that many of my clients have never taken the time to make and live on a budget.  Many times the first time my clients have ever made a budget is when they sit down with me to file for bankruptcy.  The other day I ran across this personal budget idea that I thought mat be helpful.

The Envelope Accounting System is a method of budgeting where on a regular basis (i.e. monthly, biweekly, etc.) a certain amount of money is set aside for a specific purpose, or category, in an envelope marked for that purpose. Then anytime you make a purchase you look in the envelope for the type of purchase being considered to see if there are sufficient funds to make the purchase. If the money is there, all is well. Otherwise, you have three options: 1) you do not make the purchase; 2) you wait until you can allocate more money to that envelope; 3) you sacrifice another category by moving money from its associated envelope. The flip side is true as well, if you do not spend everything in the envelope this month then the next allocation adds to what is already there resulting in more money for the next month. With envelope budgeting, the amount of money left to spend in a given category can be calculated at any time by counting the money in the envelope.

More ideas on money management and filing bankruptcy in Utah can be found at my website www.utahchapter7.com .

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One of the easiest and cheapest way I have found for my clients to rebuild their credit is to take $500 and deposit it into a savings account with a reputable and known bank or credit union.  If you don’t have $500 right now, save out $10 or $20 every paycheck (you’ll never miss it) until you have the $500.

            After you deposit the $500 into the bank, you apply for a secured bank loan for $500.  The bank will give you the loan because they will put a “hold” on your savings account, assuring them they will not lose their money.  Make your payments on time every month and never miss a payment.  Within 90 days, you will have credit with the bank or credit union.  This fact alone will outshine those other “high risk” credit cards and build your credit faster than using credit cards.

            More information on bankruptcy can be found at www.dlblaw.com.

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