Filing for bankruptcy

Bankruptcy—It Affects Famous People, Too

by Jack Morrison on July 17, 2013

Money mis-management is a chronic issue that affects people of every age, race and social status. Debt can happen to anyone and doesn’t discriminate between low income, middle income and high income individuals. Just think of all the celebrities and athletes you hear about in the news that have had to file for bankruptcy.

If you’re thinking of filing for bankruptcy in Massachusetts, you won’t be the first to do so and you certainly won’t be the last. Your current financial problems won’t ruin your life forever. Hopefully you’ll feel a little bit better about your future when we share this next fact.

You’d probably never guess that these well-known figures have undergone bankruptcy and bounced back in a big way: P.T Barnum, Walt Disney Henry Ford, Larry King. These individuals had filed for bankruptcy but recovered so that it was only a blip on the radar of their life.

And what about athletes who receive huge signing bonuses worth millions of dollars? How in the world do they lose so much money so quickly? Just check out these statistics from SportsIllustrated.CNN.com:

• By the time they have been retired for two years, 78% of former NFL players have gone bankrupt or are under financial stress because of joblessness or divorce.

• Within five years of retirement, an estimated 60% of former NBA players are broke.

Wouldn’t you think someone making all that money could control it? Unfortunately, too often the wealthy don’t understand debt, income and credit. Just like the rest of us.

There are two primary misconceptions that individuals in debt have about money. First, they think they’re alone. As the economy took a nosedive during the recession, jobs were lost, hours were cut, unemployment benefits stopped and bills kept piling up. This affected millions of Americans across the country. You’re not alone. Second, they think that filing for bankruptcy signifies the end. In fact, many people who have filed will tell you that it’s actually a new beginning. It gives them a chance to start over, make changes and learn how to effectively manage their finances.

If you want to sit down and talk with a knowledgeable professional about your situation (who won’t judge you), then you might want to sit down with a Worcester bankruptcy lawyer for a free consultation. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

How Often Can You File for Bankruptcy in Massachusetts?

by Jack Morrison on November 17, 2011

Making the decision to file for bankruptcy is difficult. But the important takeaway after you do so and receive the discharge is to alter spending habits and make smart financial decisions so you don’t end up back on the same path. Unfortunately, many people don’t learn, and they end up having to file for bankruptcy two or three times. Some, even more than that.

New laws are in place that dictate filing for bankruptcy (and receiving a discharge) is limited to 8 years for Chapter 7 bankruptcy in Massachusetts and every 4 years for a Chapter 13 bankruptcy in Massachusetts.

Many people might still file—they just won’t get the discharge. That means they don’t get the protection of the automatic stay, and creditors can still move forward to do anything they’re legally entitled to do. 

If you’ve never filed before and you’re behind on your mortgage, filing bankruptcy will stop your foreclosure. However, depending on whether you file Chapter 7 or Chapter 13, you still have to make your monthly payment if you want to keep your house. Many people use this as a short-term strategy just to delay the foreclosure initially.

The Significance of Filing for Bankruptcy
Most people who file for bankruptcy are truly in need. And the benefit of bankruptcy is that it gives you a fresh start. To truly benefit from receiving a bankruptcy discharge though, you must not repeat the same habits that have landed you in the situation you’re in. In most cases, you won’t be that person. But sadly, there are others who will come back and file 2-3 times.

As a Worcester bankruptcy attorney, I make it a point to educate my clients about how to bounce back and never again have to make repeat filing. For tips and information on life after bankruptcy in Massachusetts, read this article. 

Do you want to talk out your situation? Then sit down with a knowledgeable, understanding professional. I am a Worcester bankruptcy lawyer and encourage you to call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. There’s no obligation and the call is free. If bankruptcy is not the best option for you, I’ll let you know straightaway. Thank you.

If you’re severely in debt with no hope of resolving your finances in the foreseeable future, you’re stuck in a very real hell. But like most people, you’d rather experience a root canal without morphine than file for bankruptcy. Why is that?

The social stigma and reputation of the “b” word: bankruptcy.

No one takes bankruptcy lightly. But chances are, your situation is not going to get resolved. And probably you’ve already beat yourself up enough. Bankruptcy could be just the salvation you need.

The truth is, how can bankruptcy have such an unpleasant reputation if it provides people with an opportunity to start over financially? Let’s take a look at what bankruptcy can really do for the average hard-working American who has come upon some really bad luck. Bankruptcy eliminates your responsibilities to pay the debt that’s owed. Credit cards, deficiencies on mortgages, wage garnishments, etc. can be erased by filing. Other than paying your debt in full, bankruptcy is the most efficient, permanent method of resolving outstanding financial debt.

But negative portrayals in the media and misinformation leads people to think the worst. Bankruptcy’s bad reputation comes from society’s (and possibly friends and family) suggestion that people who file for bankruptcy are taking advantage of the system. There is a misperception that people who file for bankruptcy are outcasts, that they lived a good life and don’t have to pay for that advantage. Those who are financially solvent just can’t put themselves in your shoes.

In reality, the majority of us who file for bankruptcy are not bad people trying to evade the system. You never once imagined you would be in this situation. But if you’ve fallen on financially troubling times, you are not alone.

Are you interested in talking to someone trustworthy and understanding about your situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

Education Back to Basics: Life After Bankruptcy

by Jack Morrison on September 30, 2011

As September comes to an end, we’re wrapping up our “Back to Basics” education series by discussing a very important topic: Life After Bankruptcy. In case you missed any of our other topics on understanding the foundation of bankruptcy, you can catch them here:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation

Now let’s explore our next topic. 

Life After Bankruptcy in Massachusetts
If you’re deep in debt and haven’t yet gone through a bankruptcy, it’s difficult to imagine coming out on the other side intact. But not only do you survive bankruptcy, you’ll feel a huge weight lift off your shoulders. Starting on the road to debt recovery is like being underwater for too long and then coming up to the surface to take that much-needed gulp of fresh air. 

Contrary to popular belief, bankruptcy is not an end, but a beginning. Most of the time when clients come to me, as a Worcester bankruptcy lawyer, they’re experiencing overwhelming financial debt. Their major concerns are stopping the harassing phone calls, relieving stress and making the decision to proactively move on with their lives. Trust me: your life doesn’t have to stay in the hell it’s in now.

The primary thing bankruptcy does is permanently eliminate your responsibility to pay the debt listed in your bankruptcy petition. We call that a fresh start, meaning that hopefully after completing a bankruptcy, you’re able to afford the little expense you need in order to survive: food, shelter and clothing.

The best way to look at completing your bankruptcy is to say you’re starting your financial life over again. 

Think of yourself as being 18 again. What would you do to establish your credit? There are a number of things you can do after bankruptcy. Here’s one proven method:

 Establish and obtain a secured loan. Most credit unions will allow a $500 deposit into a credit union under a passbook savings account. Use this as collateral and ask them for a $500 loan. The passbook acts as collateral for the $500.00 loan. Most credit unions will give you the loan, even though you’ve just filed Bankruptcy and received your discharge. When you get the $500 cash, open up a checking account and deposit the money into that account. Set up the new checking account to have automatic monthly payments on the new loan. It’s all automated.

What this does is re-establish your credit. Every month that you pay on time, the credit union sends a notice to credit bureaus stating that payments were made timely. When paid in full, you get the $500 back, and you’ve improved your credit. 

For a list of additional credit-improving methods, click here.

Are you interested in resolving debt and talking to someone about your situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

Back To Basics Education Series: Reaffirmation and Bankruptcy

by Jack Morrison on September 23, 2011

This is the third week in our special “Back to Basics” education series in honor of back to school. Understanding the four basic topics of bankruptcy covered in this series is important. As a Worcester bankruptcy attorney, these critical concepts are important to help my clients understand their financial situation and make decisions about moving forward. The topics are:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation
  4. Life After Bankruptcy

Now let’s explore our next topic: Massachusetts bankruptcy and reaffirmation. 

Massachusetts Bankruptcy and Reaffirmation
When you file for bankruptcy and receive a discharge, it means that you’re not legally responsible to pay the debt listed in your petition. The discharge in Bankruptcy gives you a fresh start financially.

A Reaffirmation is a legal concept that re-establishes your obligation to pay, even after you file Bankruptcy and receive your discharge.

Let’s use an example to explain this.

In a Ch 7 bankruptcy process, if you have a car loan and can’t make your car payments, you have 2 choices: either you get current with your car payments, or you surrender the car. In either case, under a Chapter 7, you have no legal obligation to pay the debt. You can surrender the car and don’t have to worry about a deficiency ( a deficiency is when the auto loan company repossess your car, sells it, and sues you for any outstanding loan balance). IF YOU WANT TO KEEP YOUR CAR, YOU HAVE TO MAKE TIMELY PAYMENTS.  Otherwise, the auto loan company can ask the Bankruptcy Court for relief from Bankruptcy Court and repossess the car.

The reaffirmation is an agreement between you and your creditor that legally obligates you to repay the loan…even after you filed Bankruptcy. The creditor can’t force you to sign the reaffirmation agreement.   If you have an attorney representing you, your attorney must sign as well. The Bankruptcy Court has to approve all reaffirmation agreements.

I NEVER have a client sign a reaffirmation agreement.  It’s not in their best interest to do so. I always tell my clients, “if you want to keep your car, keep making regular timely monthly auto loan payments.”

Next week, stay tuned as we discuss life after bankruptcy.

Do you have questions about your financial situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

This week we pick back up with our special “Back to Basics” education series in honor of back to school. As a Worcester bankruptcy lawyer, I think it’s important we discuss four basic topics that are critical to understanding if bankruptcy is right for you:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation
  4. Life After Bankruptcy

Now let’s delve into our next topic: understanding Chapter 13 bankruptcy in Massachusetts. 

Massachusetts Chapter 13 Bankruptcy
Chapter 13—in a nutshell—means that you are committing to repaying individuals or companies some or all of the money you borrowed from them. Your proposal, the Chapter 13 plan, pays your creditors over a 3 or 5 year term.  The payment amount is a specified amount, depending upon certain criteria.    At the end of the term, any remaining unpaid debt is discharged…meaning you have no legal liability to pay the debt.

Why is a Chapter 13 Bankruptcy helpful for you? Let’s use an example:

Suppose you owe $45,000 in credit card debt. The credit cards are charging an AVERAGE interest rate of 15%. The interest only payment on that amount is $562.50 per month.

Even if you pay $1,000 per month, only $437.50 goes towards the principal, at that rate, it will take you over 5 years to repay the debt. Over the course of the 5+ years, you will have paid $66,548 ($45,000 principal and $21,548 interest) to the credit card company.

Under a Chapter 13, if certain criteria were established where your disposable income was calculated to be $500 per month and the term is 3 years,  you would pay $18,000, in total, to the credit card company.

    • No interest accrues during the Chapter 13 plan period
    • At the end of the Chapter 13 plan term, any remaining debt is discharged.

One of the most common reasons for filing a Chapter 13 Bankruptcy is to keep your home. If you find yourself behind on your mortgage payments and don’t have the cash to get caught up, filing a Chapter 13 Bankruptcy can help you keep your home. You have to show you have the ability to make monthly payments AND have the ability to repay the missing payments over the 3 or 5 year term. The bank can’t refuse or deny your payments under the Chapter 13 plan so long as they are paid each month.

Another reason you may want to file Chapter 13 is if you owe taxes to the IRS or State that arise within 3 years or less. Those taxes are not dischargeable – meaning you have to pay them. You can keep the IRS and State Taxing Authority off your back over the 3- or 5-year timeframe if you include payments into your Chapter 13 plan. A key advantage is the interest and penalties do not accrue during the Chapter 13 plan.

The payment plan that you propose in Chapter 13 is based upon a set of standards. This means looking at what disposable income you have remaining after calculating income and expenses.

As a Worcester bankruptcy attorney, it’s my job to help you figure this out. Don’t worry if you can’t calculate this on your own.

For more information on a Chapter 13 Massachusetts bankruptcy, read this article on my website.

Next week, tune in as we discuss the basics of Reaffirmation.

Do you have questions about your financial situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy attorney. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

This month, in honor of back to school, we’re dedicating the next few weeks to a special education series, “Back to Basics.” As a Worcester bankruptcy lawyer, I think it’s important we discuss four basic topics that are critical to understanding if bankruptcy is right for you:

  1. Chapter 7
  2. Chapter 13
  3. Reaffirmation
  4. Life After Bankruptcy

Now, let’s delve into our first topic: understanding Chapter 7 bankruptcy in Massachusetts.

What It Means to File Chapter 7 Bankruptcy in Massachusetts
From my experience working with hundreds of clients experiencing financial difficulty, I know that making the decision o file bankruptcy is not done lightly. There is always an emotional stage you must go through—and come out of. The vast majority of people experience denial, and they think, “Hey, I got myself into this, I can get myself out.”

Unfortunately, by the time these people come to grips that they can’t climb out of the financial hole by themselves, they’ve wasted precious time, money and emotional energy.

Chapter 7 provides protection for individuals to give them a fresh start. Anytime I counsel a client, the one question I always ask is: “if you could pay your debts in full in 5 years or less without any problem at all, can you?”  If the answer is no, then Chapter 7 is an option worth exploring.

Chapter 7 Bankruptcy in Massachusetts is referred to as a “straight bankruptcy” because it entails a liquidation of all your assets in order to repay your financial obligations. As soon as your case is filed, you no longer owe any debt; and, creditors and collection agencies can no longer contact you trying to collect. The law allows you to “wipe out” your obligation to repay the money you borrowed from them. You walk away without being legally responsible to repay the debt. Read here for more information about Chapter 7 in Massachusetts.

Next week, tune in as we discuss the basics of Chapter 13.

Do you have questions about your financial situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy attorney. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

This week wraps up our Massachusetts bankruptcy foreclosure series. Did you catch our previous videos? If not, check out the links here:

Do I Qualify to File for Bankruptcy

Do I Have to Include My House and Car

Can I Keep My Credit Card When I File For Bankruptcy

Can I Keep My Car

YouTube Massachusetts Bankruptcy Video Series #5: What Can I Do To Keep My Home?

As a Worcester, MA bankruptcy attorney, I got the inspiration for this video from a common question that comes up from my clients: “If I’m behind on my mortgage and don’t qualify for a loan modification, what can I do to keep my home?”

 In this 1 minute and 40 second video, I’ll reveal the answer to this question and discuss the reasoning behind it.  We’ll also go over an example situation. Click below to watch now:

 

Thank you for joining us with our bankruptcy video series. Throughout September we’ll be featuring our special education series, “Back to Basics” and discussing Chapter 7, Chapter 13, Life After Bankruptcy, and more.

Do you have questions about your financial situation? Then you might want to sit down with a knowledgeable Worcester bankruptcy attorney. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form. Thank you.

 

Can I Keep My Car?

by Jack Morrison on August 25, 2011

This week we’re continuing our Massachusetts bankruptcy video series. Our previous videos discussed the answers to the following questions:

Do I Qualify to File for Bankruptcy
Do I Have to Include My House and Car
Can I Keep My Credit Card When I File For Bankruptcy 

This week we’re bringing you the answer to an often-asked question: can I keep my car after filing for bankruptcy? 

YouTube Massachusetts Bankruptcy Video Series #4: Can I Keep My Car?
As a Worcester bankruptcy attorney, my clients often ask if they can keep their car after they file for bankruptcy.

The answer is: it depends. It depends on the equity you have in your car. In this brief 2-minute video, we’ll share with you the answers to:

  • How is equity obtained?
  • How do you get the market value of your car?
  • What do federal and Massachusetts laws say about equity and exemptions?
  • What one thing do you have to do in order to keep your car?

We’ll also explore this further by giving you an example. Click below to watch now:

Again, thank you for joining us. Stay tuned for the final bankruptcy Q&A video you’ll see this month:

  • What Can I Do to Keep My Home?

Get your financial situation resolved once and for all. Sit down with a knowledgeable Worcester bankruptcy attorney. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form.

Can I Keep My Credit Card When I File for Bankruptcy?

by Jack Morrison on August 18, 2011

Thanks for joining us as we continue our bankruptcy video series. Did you catch our previous discussions, Do I Qualify to File for Bankruptcy? Or Do I Have to Include My House and Car? Today, we’re bringing to you a common question: Can I keep my credit card after I file for bankruptcy?

YouTube Video Series: Video #4 – Can I Keep My Credit Card?
In my Worcester, MA bankruptcy legal practice, many clients want to know if they can keep their credit card after bankruptcy. I tell them two things: 1) No, you cannot legally keep your credit card. You must include all your debt when you file. And 2) you don’t WANT to keep any credit cards when you file.

Want to know why? Then click below to watch our 2-minute video:

Stay tuned for the next two videos you’ll see this month:
Can I Keep My Car?
What Can I Do to Keep My Home?

Get your financial situation resolved once and for all. Sit down with a knowledgeable Worcester bankruptcy lawyer. Call my office, the Law Office of Jack Morrison, today at 508.852.7800 or reach out via our contact form.