Articles Posted in Bankruptcy Trends

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is a small business bankruptcy ?”

For years, retail chains have been collecting customer data to use for marketing, advertising and a host of other reasons that have nothing to do with consumers and everything to do with profiting off their information.

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 13 bankruptcy?”

 

Changes to the United States Bankruptcy Code enacted a decade ago were designed to lower the number of bankruptcy filings in the United States. Last year, bankruptcy filings were down about half from a decade ago, but bankruptcy experts wonder if the reforms “have done more harm than good,” according to The Economist.

Man at desk Local Bankruptcy Lawyer Charlotte Debt AttorneyAs a recent paper published by Stefania Albanesi of the New York Federal Reserve and Jaromir Nosal of Columbia University confirms, the decade-old bankruptcy reforms have “led to a permanent drop in the bankruptcy rate.”

However, Princeton assistant professor of Economics Will Dobbie and Jae Song of the Social Security Administration say that tightening bankruptcy rules may suppress the “good microeconomic effects” that easier bankruptcy rules produce. A bankrupt person has more incentive to work, for instance, if large chunks of one’s salary are not seized by creditors.

According to Dobbie and Song, people who were able to avail themselves of bankruptcy protection earned over $6,000 more in average income the year after declaring bankruptcy than those whose petitions were denied. Those whose petitions were denied, Dobbie and Song theorized, were more likely to “slip out of town, change [one’s] job and close down [one’s] bank account.”

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 11 Bankruptcy?”

 

The number of businesses that filed for bankruptcy in the State of Texas in 2014 declined by twenty percent compared with 2013, according to Androvett Legal Media. Business bankruptcy filings in the Lone Star State are down by more than half over the past five years.

Business 101 Mecklenburg Bankruptcy Lawyer North Carolina Chapter 7 AttorneyAs the United States’ economy sputtered into and out of recession in 2009 and after, the Lone Star State’s economy has boomed, leading some pundits to argue that Texas has been propping up the nation’s economy as a whole.

The state’s booming economy may be reducing bankruptcies, but it was not the booming economy that had a gathering of some 100 Energy Future Holdings advisers gasping in a boardroom last month. The gasps followed the revelation by former American Airlines general counsel Gary Kennedy that the airline’s daily legal bills in its recent bankruptcy ran to about $500,000 per day. Kennedy said businesses should seek alternatives to bankruptcy because, he said, the costs of a business bankruptcies have spiraled out of control.

Martin Sosland, a partner at Weil, Gotshal & Manges—a Dallas, Texas-based law firm—did not dispute that business bankruptcies can be expensive, but he cited the American Airlines bankruptcy as a perfect example of how a Chapter 11 proceeding can help a struggling business “restructure debt, renegotiate union contracts,” and merge or consolidate business operations in a manner that returns the business to profitability. Sosland said the airline’s creditors were paid 100 cents on the dollar and that American’s stock skyrocketed from 31 cents at the time of the bankruptcy filing to over $50 today.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Will I lose my property if I file for bankruptcy ?”

 

A Colorado couple say they have been unfairly penalized by a United States bankruptcy judge because they run a legal medical-marijuana business.

Medical Marijuana Charlotte Bankruptcy Lawyer North Carolina Chapter 7 AttorneyThe couple—Frank and Sarah Arenas—filed for bankruptcy in February of last year. A bankruptcy judge dismissed their bankruptcy petition in August because, the judge ruled, most of their income came from their medical marijuana business—an activity that is still illegal under federal law.

Through their attorneys, the couple appealed, arguing that the United States Justice Department created a “Catch 22” in which Frank and Sarah Arenas are ensnared by giving its tacit approval to the now-thriving medical and recreational marijuana industries in Colorado. Then-Attorney General Eric Holder announced in 2013 that federal law-enforcement officials would not prosecute federal pot crimes in the states of Colorado and Washington.

“Refusing to allow marijuana-derived assets to be protected in bankruptcy in the same way other assets are,” however, amounts to “passive prosecution” of crimes the federal government had pledged not to prosecute, attorneys for Frank and Sarah Arenas argued in an appeal of the bankruptcy judge’s ruling. The Arenas are seeking to overturn the judge’s ruling and have their bankruptcy petition reinstated.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is a bankruptcy discharge?”

 

Humberto Soto thought the $6,411 Chase credit card debt he incurred before his 2012 bankruptcy had been discharged, but when the 51-year-old former hospital worker tried to rent an apartment in January, a housing agency ran his credit and spotted the debt.

Zombie Debts Charlotte Chapter 7 Lawyer North Carolina Bankruptcy AttorneySoto called JPMorgan Chase, who held the debt. Chase told Soto he either had to pay or else lose the apartment. Soto called his lawyer, who called the housing agency. Soto got the apartment, and he did not have to pay Chase.

Soto’s experience is playing out by the thousand across the United States, with large financial institutions failing to extinguish debts that federal judges have ordered discharged in bankruptcy courts. By keeping the debts alive, banks are “essentially forcing borrowers to make payments on bills that they do not legally owe,” according to the New York Times. The Times calls the not-dead-yet debts “zombie” debts.

The banks say they comply with all federal laws regarding debt collection and sale of debt holdings, but lawyers in the United States Trustee Program are investigating Chase, Bank of America, Citigroup and General Electric’s financing arm, alleging that the institutions are effectively holding consumer credit reports hostage until borrowers pay—even borrowers whose debts have been discharged through bankruptcy.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Do I need an attorney to file bankruptcy?”

 

A Milwaukee bankruptcy judge has sanctioned a bankruptcy petition preparer after having the woman hauled into court in handcuffs and shackles by the United States Marshals Service.

Paperwork Charlotte Foreclosure Lawyer Mecklenburg Bankruptcy AttorneyThe woman, Katee Sims, faced contempt charges for continuing to prepare bankruptcy petitions for third parties, despite being ordered in July to stop doing so.

Sims said she first got into the business when she was at the courthouse working on her own bankruptcy petition. A man sitting next to her told her he was a bankruptcy petition preparer. Although Sims had filed bankruptcy herself five times, she had no professional experience or training helping third parties prepare petitions.

Nevertheless, she launched a bankruptcy petition preparation business, offering to assist people with filling out bankruptcy forms. Bankruptcy petition preparers are prohibited by federal law from providing any legal advice or answering even basic questions for clients. The Milwaukee Journal Sentinel described petition preparers as “typists.”

The Journal Sentinel reported that, until 2012, the Milwaukee area was a bankruptcy petition preparer hotbed, and had more preparers in business in its federal court district than nearly every other district in the country. Many of these petition preparers charged clients what were seen as excessive fees, and they were accused of submitting bankruptcy paperwork rife with errors.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What are my alternatives to bankruptcy ?”

 

As North Carolina continues to struggle with the issue of whether to opt in or opt out of the Affordable Care Act’s Medicaid expansion, economists at Columbia University are touting what they see as one of the expansion’s indirect benefits: a reduction in bankruptcies.

Ear Examination Charlotte Bankruptcy Attorney North Carolina Debt LawyerAs is now well known, the Affordable Care Act—known in common parlance as Obamacare—gave states the option of expanding Medicaid coverage to low-income citizens.

As it turned out, the “option” was not really an option at all. It was a requirement. States were required to expand Medicaid eligibility to people whose incomes were less than 138-percent of the Federal Poverty Level. That amounts to an annual income of $19,530 for a family of three, by year-2013 standards.

A number of states took the word “option” seriously and opted out of the Medicaid expansion. They fought the Obama administration all the way to the United States Supreme Court. In 2012, the high court sided with states that viewed the term “option” as just that. States could opt out, the court ruled.

Officials in states that opted out worried that swelling Medicaid rolls would drain state coffers. The federal government has agreed to foot the bill for Medicaid expansion until 2016, with its share of the bill dropping to 90-percent thereafter.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I buy a home after bankruptcy?”

 

Mary Santiago has lived in an East Village apartment for nearly 50 years. She still pays a monthly rental of $800. Her right and the rights of other New York residents to rent-stabilized leases may be in jeopardy after a bankruptcy trustee sold Ms. Santiago’s lease to her landlord.

NYC Charlotte Bankruptcy Lawyer North Carolina Foreclosure AttorneyEast Village is a neighborhood in Manhattan, which is one of five boroughs that make up New York City, New York. In 2014, the average monthly rental of a studio apartment in a building without a doorman in East Village has run between $2,000 and $3,000. Monthly one and two-bedroom apartment rentals can exceed $4,000.

Rent stabilization programs are used to “protect tenants in privately owned buildings from illegal rent increases” and to ensure tenants receive required services, have their leases renewed if desired, and protect them from illegal evictions. The New York City Rent Guidelines Board enforces the city’s rent stabilization policies.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 11 Bankruptcy?”

 

Though most people have heard of Chapter 7 bankruptcies (known as liquidation bankruptcy) and Chapter 13s (used to restructure debts), Chapter 12 bankruptcies are far less common. To find out more about what a Chapter 12 bankruptcy is and how it is used, keep reading.

 

Number 12 sign Charlotte Chapter 12 Bankruptcy Lawyer North Carolina Debt AttorneyWhat is a Chapter 12 bankruptcy?

 

Chapter 12 is actually one of the newer categories of bankruptcy and was only formally made permanent in 2005. Chapter 12 is used specifically for family farmers and family fishermen. Chapter 12 is similar to a Chapter 13 in that it allows the restructuring of a person’s debts to avoid liquidation or foreclosure.

 

Who is eligible for a Chapter 12 bankruptcy?

 

Very few debtors are actually eligible to file Chapter 12 bankruptcy and in 2011, the most recent year that numbers have been made available, only 630 of the overall 1.4 million bankruptcies filed in the U.S. were for Chapter 12 cases.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I get credit after filing personal bankruptcy?”

 

A recent article on CNBC discussed the issue of increasingly pricey prescription drug bills and how the escalating costs associated with treating illness can drive families into bankruptcy.

 

Prescription bottle Charlotte Bankruptcy Attorney North Carolina Chapter 11 LawyerThe report noted that in 2013, Americans forked over more than $41 billion in unreimbursed prescription drug costs. This number has continued a steady march upwards and is reaching levels that are impacting the financial health of some homes. The reality is that many insurance plans today carry not only steep monthly premiums, but large annual deductibles that must first be hit before coverage kicks in, putting those families with low incomes in trouble.

 

One bankruptcy attorney interviewed in the article noted that half of his clients have medical-related debts. In other cases, experts say that a person’s debt may appear to have nothing to do with medical expenses, for instance, it may be exclusively on credit cards. However, this usually is because the family chose to use their cards to pay for living expenses after their income went towards prescription drug bills.

 

Sadly, the implementation of the new Affordable Care Act appears to have done little to solve the problem. Those with chronic health conditions must still pay large monthly premiums and contend with potentially thousands of dollars in annual deductibles. Additionally, a lack of knowledge surrounding the confusing insurance plans and their offerings make it even more difficult for consumers to understand how best to minimize medication costs.

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