This morning I received a voice mail message from a former chapter 7 client. She received her discharge in August 2012. In her voicemail, she stated that a collection agency was calling her to collect on a credit card that was part of the bankruptcy. I immediately called the collection agency and explained to them that they are violating federal law by trying to collect on a debt that was discharged in a bankruptcy.
The bankruptcy statutes are designed to give honest debtors a fresh start. They are not designed to allow individuals to discharge debts that they never intended on paying in the first place. Most debtors are honest people that have come on some challenges (loss of job, medical condition, etc.).
When someone files a bankruptcy there are different exemption amounts for different assets. The exemption amount for a residence, also known as the homestead exemption, is $40,000 for single filers and $50,000 if the debtors are married, jointly own the property, and it is a joint filing.
The Advantages of Filing Bankruptcy BEFORE You Get Hit with an Income Tax Lien Adam M. Weiner Bankruptcy Layer, Attorney, Tax LienBankruptcy treats creditors with collateral much better than those without. This is especially true if one of your creditors is the IRS or the Oregon Department of Revenue. The difference is that with them YOU have some control about whether these taxing authorities have collateral or don’t.
Are Creditors Right When They Say You Can’t Write Off Their Debt in Bankruptcy? Most debts ARE written off in bankruptcy. Most creditors or collectors who try to persuade you to pay a debt on the threat that it can’t be written off in bankruptcy are likely either ignorant or dishonest. Adam M. Weiner Bankruptcy Layer, Attorney, Write off DebtThis blog is not about secured debts—those with collateral like a mortgage or vehicle loan. It’s not about the relatively short list of special debts which are not written off regardless whether the creditor complains or not—child and spousal support, most student loans, many taxes. Instead this is about regular debts that would be written off unless the creditor objected.
Two Separate and Distinct Lists of Debts. Which Are Not Written Off in Bankruptcy Most debts ARE written off in bankruptcy. But there are two very different sets of debts which aren’t. To understand bankruptcy it helps to understand the difference between these two.
Some Divorce Debts CAN Be Written Off in Bankruptcy Adam M. Weiner Bankruptcy Layer, Attorney, DivorceYou may have heard that in bankruptcy you can never discharge financial obligations to your ex-spouse that were created through your divorce. This misconception is understandable because it’s true much of the time. You can’t discharge virtually any kind of obligation owed to your ex-spouse under Chapter 7. You cannot discharge child and spousal support with ANY kind of bankruptcy. As stated above, only NON-SUPPORT obligations can be discharged, and only under Chapter 13.
Oregon Employers Can't Use Your Credit Report Anymore When Deciding Whether to Hire You Adam M. Weiner Bankruptcy Layer, Attorney, Credit ReportOn July 1, 2010, Oregon's Job Applicant Fairness Act went into effect making it unlawful for most employers to require a job applicant to provide a credit report when applying for a job. There are some exceptions to this law, which include job applicants for bank jobs, police, security, and/or if credit information "is substantially job related." Nonetheless, this is a powerful law that not many other states have.
IF all of the equity in the home is completely covered by the “senior” mortgage(s), leaving not a penny of equity to cover the next-in-line mortgage or line of credit, then in a Chapter 13 Bankruptcy the junior mortgage and/or line of credit can be stripped away.