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Articles Tagged with Bankruptcy effects

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 “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 “Are my 401k and IRA protected in bankruptcy?”


This is a new year, and no time beats the present when it comes to throwing the lasso round out-of-control debts.

Credit Cards Charlotte Debt Lawyer North Carolina Chapter 7 AttorneyHow do you know when your debts have spiraled out of control? One expert, writing in the Orange County, California Register, has devised a simple equation you can use to determine whether you have too much debt: Pretend you don’t have to make a mortgage or rent payment for the next year. With the money you have and the money you will save on rent or mortgage payments, can you pay off your debts? If the answer is no, you probably do not have a firm handle on your finances.

Other telltale signs of an impending personal financial crisis include a reliance on credit cards to pay for every day expenses, payment of only minimums due each month on credit cards, late or missed payments on credit cards, taking out new loans or credit cards to pay off old ones, or taking on a second (or third) job just to keep up with your current obligations.

If you have done the math and you are drowning in debt, the first, crucial step is to be honest about how much you owe and whether there is any reasonable likelihood that you can ever repay your debts. The best practice, of course, is to not fall into credit-card trouble in the first place—that is, you should always pay your credit card balances in full, every month.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “How do I find a bankruptcy attorney in Charlotte?”


Now is the time for New Year’s resolutions. As 2015 swings into gear, a leading bankruptcy adviser is offering tips for individuals and businesses who are contemplating bankruptcy.

Out of business sale Charlotte Mecklenburg Bankruptcy Lawyer North Carolina Debt AttorneyJustin Harelik, founder of Westgate Law in Los Angeles, says an effective bankruptcy is as much a result of solid pre-bankruptcy planning as it is a result of actions undertaken during the bankruptcy process.

Too often, Harelick said, bankrupt consumers and businesses wait too long to take action. Many times clients hire Harelick and pay their attorney fee but then hold on to their paperwork for too long. Only after creditors begin levying on property or garnishing accounts, Harelick said, clients follow up with him about their paperwork.

A bankruptcy attorney can stop garnishment, Harelick said, although sometimes one is unable to recover monies seized in a bank levy. Once a client has paid for a bankruptcy attorney’s services, Harelick said, it is important to follow up to ensure that everything necessary to get the bankruptcy action filed has been completed. The longer a client holds onto documents, the longer the relief that a bankruptcy affords may be delayed.

Since it is much easier, in the digital age, for creditors to levy bank accounts, Harelick encourages those facing bankruptcy to keep their bank account balances low. That will stem the tide of losses due to bank levies, particularly if the bankruptcy filing is made after levying of accounts has commenced.

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


Anyone who has passed through the bankruptcy process and received a bankruptcy discharge notice in the mail may experience an understandable sense of joy and relief. It is over. Or is it?

House Auction Charlotte Bankruptcy Lawyer Mecklenburg Chapter 7 AttorneyAt the risk of sounding like a lawyer, whether “it” is “over” depends upon what one means by “it’ and what one means by “over.” In the world of bankruptcy, very little is ever really over, and even the bankruptcy discharge—while an important formality—does not end any actions that are still pending in a bankruptcy.

A bankruptcy, at its essence, is less like a lawsuit and more like probate—gathering the assets of a dead person and using them to pay off the person’s debts. The difference is the person is not dead; the person is you, and sometimes the best recourse you have against creditors is to sue. In bankruptcy, your trustee may sue creditors for a variety of reasons, and your trustee may answer and defend against creditors or others who sue you, for whatever reason. These cases can drag on long after a person has received one’s bankruptcy discharge.

A bankruptcy discharge does not, as many believe, wipe the proverbial slate clean, so if clearing yourself of any and all debts is what you define as having “it” over and done, then you may misunderstand the effect of a bankruptcy discharge.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What is Chapter 7 Bankruptcy?”


A Milwaukee, Wisconsin-area Conservative activist is blaming officials in Milwaukee’s municipal government for his bankruptcy.

Tom Barrett Charlotte Bankruptcy Attorney North Carolina Chapter 7 LawyerThe activist—Orville Seymer—said he has been targeted by city bureaucrats for speaking out publically against the actions and decisions of local officials.

The 61-year-old Seymer owns—through his company ODS Properties—as many as seven rental properties in the Milwaukee area. Seymer’s buildings have been cited over the years for numerous code violations by the city’s Department of Neighborhood Services.

Seymer told the Milwaukee Journal-Sentinel that a city inspector revealed to him that “higher-ups and City Hall” were conspiring to get even with Seymer for helping expose issues with the city’s “OpenSky” digital police radio system, which came to light during Milwaukee Mayor Tom Barrett’s unsuccessful 2010 gubernatorial campaign against current Governor Scott Walker.

In his bankruptcy filing, Seymer listed some $147,126 in assets and more than a million in liabilities. Department of Neighborhood Services head Art Dahlberg told the Journal-Sentinel that Seymer’s own bankruptcy petition shows he only owes about $10,000 in forfeiture and re-inspection fees.

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


The unveiling of the American Bankruptcy Institute’s proposed Chapter 11 bankruptcy reforms has been “long-awaited,” reports Katy Stech in the Wall Street Journal.

Old Bankruptcy Ad Charlotte Mecklenburg Bankruptcy Lawyer North Carolina Chapter 11 AttorneyIf you have been waiting for the Institute’s proposals, wait you will no more. It unveiled its recommended changes to Chapter 11 bankruptcies on Monday morning. Some of the proposals might someday become law.

The Institute’s proposed changes would streamline the Chapter 11 bankruptcy process for small businesses, or private companies with less than $10 million in assets or debts. The process would be cheaper as well, eliminating the automatic appointment of an unsecured creditors committee. The Institute also proposed to allow business owners to retain their ownership interest by repaying creditors based on their companies’ market value, as opposed to having to repay all their debts in full, as required under current rules.

Retailing businesses would be given additional time under the proposed changes to decide which store leases to continue and which ones to break. Current rules provide that tenants have 210 days after filing a bankruptcy petition to decide whether to assume or reject a lease. Stech reports that professionals who assist retailers in restructuring business operations have said the 210-day deadline leaves little time to renegotiate leases. Under the Institute’s plan, retailers would have one year to assume or reject leases.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get credit after filing personal bankruptcy?”


What is the first thing a person should do after bankruptcy? Get a credit card!

Life after debt Charlotte Chapter 13 Lawyer North Carolina Chapter 7 AttorneyNot really, but you should at least think about opening some new credit lines, according to Gene Melchionne, a Connecticut-based bankruptcy attorney. Think about credit, but “Don’t go crazy trying to get new credit right away,” Melchionne advises.

The nice thing about emerging from bankruptcy, Melchionne says, is that you no longer have to worry about the debts that were dragging down your budget before bankruptcy. On the other hand, your credit score is in the gutter, and you need to take on some credit in order to start to bring the score up.

Melchionne suggests starting with a small credit limit and monitoring credit card use closely to make sure you can pay off the entire balance each month.

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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 “What is a small business bankruptcy?”


The craziness in Washington, D.C. is heating up, as one party has foisted onto the floor of the House of Representatives a bill that will be considered under rules suspension. That means the bill will not be amended and will be subject to limited debate.

Bailout money Charlotte Mecklenburg Bankruptcy Attorney North Carolina Chapter 13 LawyerIt is not what you might imagine, however, and far from the advertised “gridlock” that is supposed to have been ensuing in the nation’s capital. The Financial Institution Bankruptcy Act actually enjoys broad, bipartisan support and is co-sponsored by powerful members of both predominant political parties, including Reps. Spencer Bachus (R., Ala.), John Conyers (D., Mich.), and Bob Goodlatte (R., Va.).

Many critics of the 2010 Dodd-Frank Act complained that it enshrined in law the kind of taxpayer bailouts of large companies and financial institutions that were employed on an emergency basis during the Great Recession. The new Act creates a new section of the bankruptcy code, which vests in the bankruptcy courts the authority to oversee bankruptcies involving large financial firms. This authority would appear to supplant the “orderly liquidation authority” created by the Dodd-Frank Act, which critics said enabled bureaucrats to pick and choose among creditors.

The new Act, however, does not eliminate or sap power from the “orderly liquidation authority.”

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