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When it comes to bankruptcy and family law, the justice system can seem like an endless web. We aim to simplify and offer as much insight in to the legal system as possible. Here you will find numerous articles in which we lay out our insight to the justice system. We will cover everything from chapter 7 bankruptcies to how to prepare for your divorce case.

To File Or Not To File

Daniel Usiak - Tuesday, November 17, 2015

I recently gave a brief presentation on bankruptcy to the Deacons of a local church. As part of their benevolences they assist parishioners who have financial difficulty. They needed some guidance to identify situations where bankruptcy would be an appropriate solution. The talk also addressed the differences between Chapter 7 and Chapter 13 bankruptcies. What follows is the outline handout for the presentation.

Bankruptcy is a system established by federal law that allows an insolvent honest debtor the opportunity to discharge personal liability of all allowed debts and achieve a financial fresh start.

Chapter 7
  • Usually 4 month process after the petition is filed
  • Usually no payments to the trustee
  • Trustee can liquidate non-exempt assets

Chapter 13
  • 3 to 5 year process after the petition is filed
  • Payments for 3 to 5 years pursuant to a plan approved by the judge
  • Trustee does not liquidate assets
  • Provides discharge of some debts not discharged by Chapter 7

Who can file?
  • Chapter 7, if no bankruptcy discharge in past 8 years and meet income “Means Test”
  • Chapter 13 if no chapter 7 discharge in past 4 years or chapter 13 discharge in past 2 years; also subject to debt limits

Reasons to not file
  • Too many assets
  • Too much income

Alternatives to Bankruptcy
  • Consumer Credit Counseling
  • Debt Settlement

“Capitalism without Bankruptcy is like Catholicism without Hell.”
~ Ziad K. Abdelnour, Economic Warfare: Secrets of Wealth Creation in the Age of Welfare Politics

Will Bankruptcy Fix the problem?

Daniel Usiak - Monday, July 13, 2015
Will Bankruptcy Fix The Problem?

Many people ask me, “Do I qualify for bankruptcy?” Actually a better question is, “Will bankruptcy fix the financial problem I face?” Usually the person asking that problem can benefit from a bankruptcy fresh start. . . but not always. Nearly every month have to tell one or two potential clients that bankruptcy is not the best course of action for them. Here are some questions to ask in analyzing whether to file or when to file bankruptcy:

  1. Do you have enough debt to justify filing a bankruptcy? You have to consider the price of your bankruptcy, including the attorney’s fees, the court filing fee, and any other costs. Also, the bankruptcy filing remains on your credit report for 10 years. So does the benefit of your fresh start provide enough bang for your buck?

  2. Do you have non-exempt assets that you could lose or have to buy back from the bankruptcy estate? Each state sets its own exemptions, which typically protect the property you need to live and make a living. You can exempt certain assets, usually up to a certain dollar amount, that are not at risk and you keep. These may include retirement accounts, household goods, homestead, cars, tools of a trade, jewelry, and clothing. With your attorney’s help you can determine whether the value of your assets exceed the amount you can claim as exempt and if the amount of any non-exempt assets makes bankruptcy a good or bad choice. Maybe in your situation avoiding bankruptcy or repayment over a few years in a chapter 13 makes more sense than chapter 7.

  3. Have you engaged in transactions that suggest that you should not file or wait before you file? These include transfer of money or other assets to friends or family members, recent use of a credit card, transfer of a credit card balance to another credit card, receiving a bankruptcy discharge in the past 8 years, or recent purchase of a new or used vehicle. There are other transactions that can impact your bankruptcy, so it is critical to accurately and completely disclosure all relevant information to your bankruptcy attorney so your bankruptcy can proceed as smoothly as possible.

You should consult a bankruptcy attorney when you realize that your debt is overwhelming your income to help you recognize the risks and benefits of filing a bankruptcy in your specific circumstances. Your attorney can help you navigate the process well before your bankruptcy is filed.

What’s the Matter with Low Cost Bankruptcies?

Daniel Usiak - Sunday, June 14, 2015

If the so called “bankruptcy mills” were to the legal sector what their industrial forebears were to the productive industries, then veteran lawyers would have no basis for complaint. Mills and factories made production of consumer goods cheaper, faster, and more accessible, and provided jobs to legions of unskilled rural peasants – suddenly, almost everyone could have off-the-rack clothing, factory made furniture, and the other staples of the modern comfortable life.

So what’s the matter with a large firm bankruptcy mill that churns out inexpensive boiler plate bankruptcies and employs legions of questionably-able lawyers?

It’s a simple case of getting what you pay for. And since each bankruptcy case is unique and no two individuals have the same financial history or legal needs, what you get is often a mass-produced solution that may or may not actually address the individual’s needs.

Many of these large operations are law firms in name alone. Working on a volume model of business, they aim to rope in as many clients as possible, using TV spots and highway billboards to advertise unbelievably low rates and too-good-to-be-true promises of economic salvation and legal recovery.

But there are several downsides. Since the large bankruptcy mills do not function like normal law firms, clients often have little contact with their appointed attorney. Lawyers from these massive firms struggle to try to find their clients at creditors meetings or court hearings. If one-on-one contact with an attorney is a high priority, then the mill model of bankruptcy law probably won’t satisfy. We urge consumers not to underestimate the importance of having regular and respectful contact with their lawyers. It’s a sad state of affairs when clients come to us complaining that their previous attorneys were disrespectful or uncaring – but sadly this happens all too often.

Another problem with “bargain basement” bankruptcy firms is that they often provide a la carte style services. While they may advertise bankruptcy filings for only $400, you’ll usually get only bare bones service for this price. It costs more to get comprehensive representation, and clients are often left disaffected by having to pay far more than they’d initially thought.