I hope this is a useful guide for anyone considering filing. This is general advice, and for SPECIFIC legal advice, talk to a lawyer. That being said, if this helps prevent a future catastrophe for you and your family, that makes me happy!
RENTERS: It's typically much easier in my jurisdictions (MI and CO) to get a place before you file than after, and very tough during the process. Secure your housing before you file, and make sure you have a plan B. Foreclosure coming up?
If you have the right to sue someone for any reason, class action, personal injury etc, let your lawyer know right away so it can be listed in your schedules. Leaving it out could be bad - look at 'Judicial Estoppel'. NEVER hide assets or income. This includes side cash jobs. Make sure your tax documents match your bankruptcy documents. Don't mistake bad credit with the expense of paying your debts back. Far too often people outweigh the negative credit hit against the tens of thousands of dollars they will pay back to creditors by NOT filing. Use this calculator to determine the costs of not filing. This is a financial and business decision. Treat your creditors how they treat you! https://www.bankrate.com/credit-cards/tools/credit-card-payoff-calculator/ With rare exception, vehicle-based Chapter 13s are a nightmare for everyone involved. With the higher interest rates, cost of insurance, 'adequate protection', if the vehicle was purchased sooner than 910 days ago, it's almost always extremely expensive. If you're in a Chapter 13 and you have a wage deduction, make sure it is working every time you get paid. Expect that there may be a mistake on the part of your employer in terms of frequency or amount. Contact your lawyer if something is amiss! Public student loans can now be credited in IDR plans through Chapter 13: https://library.nclc.org/article/new-rule-gives-chapter-13-bankruptcy-debtors-credit-toward-student-loan-forgiveness Additionally: Credit Unions are not your friend, or your family, even if they call you 'member'. They're in it to make money. Cash Advance/Payday Loans are satanic. Avoid them. In general, don't make any big money moves, buying, selling, moving stuff around. There may be exceptions to these statements, and for LEGAL ADVICE talk to a lawyer in your jurisdiction.
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The real estate industry is standing at a pivotal crossroads due to a recent settlement that has upended the age-old commission model. The customary 6% realty fee, traditionally split between buyer’s and seller’s agents, is no longer a market standard, paving the way for new negotiation dynamics and fee structures.
This paradigm shift prompts a critical examination of the old incentive system where higher property prices resulted in heftier paychecks for buyer’s agents, ostensibly benefitting both parties. However, today’s market-savvy buyers often commence their property searches online, making one wonder about the value proposition of a buyer’s agent who is not financially motivated to press for a lower price. Take the instance of purchasing a $1 million house. A $60,000 commission—once evenly split between agents—raises eyebrows when questioning the true cost-to-service ratio. The reformation opens the door for attorneys to step in as negotiators for buyers, working at hourly rates with a clear directive to lower costs, potentially providing a more cost-effective and goal-oriented service. The shift could also lead to a significant exodus of buyer’s agents from the industry. The absence of predictable commissions might drive them to seek retainers, but buyers, especially those reliant on mortgage financing, may find such upfront costs daunting. A silver lining, however, emerges in the potential decrease of “steering”. Agents have been known to favor properties offering higher commissions, often bypassing FSBO (For Sale By Owner) listings. The new norm could democratize property exposure, offering buyers a more comprehensive view of the market and sellers, even without agents, a fair chance. In essence, while this transition challenges conventional practices, it heralds an era of transparency and equity in real estate transactions. The alignment of fees with actual service, the potential for more vigorous negotiation, and an equitable market for all listings, could redefine the value of a home purchase, placing the true interests of buyers and sellers at the forefront. In today's economy, inflation is a reality that affects all of us, particularly when it comes to essential purchases like groceries. As prices rise, families and individuals may find it increasingly challenging to maintain their standard of living without adjusting their spending habits. For those navigating financial difficulties or bankruptcy, managing grocery expenses becomes even more critical. Here are practical strategies to combat inflation at the grocery store and keep your budget in check.
1. Plan Your Purchases Start with a plan. Before heading to the grocery store, take inventory of what you already have. Plan your meals for the week based on these items and buy only what you need to complete your meals. This strategy helps avoid impulse buys and waste. 2. Embrace Coupons and Discounts Coupons, sales, and discount apps can be a game-changer for reducing grocery bills. Many stores offer loyalty programs that provide access to exclusive deals. Apps like Ibotta or Checkout 51 offer cashback on grocery purchases. Combining these deals with store sales can lead to significant savings. 3. Buy in Bulk Buying in bulk can offer substantial savings, especially for non-perishable items or products you use regularly. However, it's important to have storage space and to avoid buying bulk items that could expire before you use them. 4. Choose Store Brands Store brands are often significantly cheaper than their name-brand counterparts and the quality is usually comparable. Switching to store brands for staples such as cereals, baking ingredients, and canned goods can save a considerable amount each trip. 5. Shop Seasonally and Locally Produce that is in season is not only fresher and tastier but often cheaper. Farmers' markets and local produce stands can offer competitive prices and the opportunity to support local businesses. 6. Reduce Waste Americans waste a staggering amount of food each year. Being mindful of what you throw away can save money and help the environment. Freeze leftovers, repurpose food scraps, and be creative with meals to use up what you have before buying more. 7. Consider Plant-Based Proteins Meat is often one of the most expensive items in the grocery cart. Incorporating plant-based proteins like beans, lentils, and tofu can reduce your grocery bill and offer health benefits. 8. Limit Convenience Foods Pre-cut fruits and vegetables, pre-cooked meals, and other convenience foods are usually more expensive. Taking the time to prepare and cook food yourself can lead to significant savings. Inflation may be beyond our control, but how we respond to it, especially in managing our grocery bills, is within our grasp. By adopting a few, if not all, of these strategies, you can make your dollar stretch further without sacrificing the quality and enjoyment of your meals. Remember, managing your grocery spending is not just about surviving inflation but also about thriving despite it, making every cent count towards your financial health and well-being. Bankruptcy cases can be complex and challenging for both debtors and creditors. However, a recent Supreme Court ruling has shed light on an important aspect of consumer bankruptcy: the ability of consumer debtors to sue tribes for violating the automatic stay. In this blog post, we will explore the implications of the Lac du Flambeau Band of Lake Superior Chippewa Indians, et al. v. Coughlin case and discuss the specific requirements tribes must adhere to under the Bankruptcy Code.
Background of the Case On June 15, 2023, the U.S. Supreme Court delivered its decision in the case involving Lendgreen, a tribal entity that had provided a high-interest, short-term (aka a cash advance or 'payday') loan to an individual named Brian Coughlin. Coughlin subsequently filed for bankruptcy under Chapter 13. Lendgreen, believing it was exempt from certain provisions of the Bankruptcy Code, including the automatic-stay provisions, continued its debt collection efforts despite the ongoing bankruptcy proceedings. In response, Coughlin filed a motion to enforce the automatic stay against Lendgreen, its parent corporations, and the tribe. The Court's Ruling The Supreme Court's ruling in Lac du Flambeau clarified that tribal sovereign immunity does not shield tribes from specific requirements of the Bankruptcy Code, as outlined in 11 U.S.C. § 106(a). The Court determined that the definition of "governmental unit" within Section 106(a) includes tribal governments, effectively abrogating their sovereign immunity for the enumerated provisions of the Bankruptcy Code. This decision resolved a circuit court split that had persisted since 2019. Important Provisions Implicated by the Ruling The Lac du Flambeau ruling has significant implications for various provisions of the Bankruptcy Code. It's essential for tribes and tribal entities to familiarize themselves with these provisions and seek legal advice when necessary. Here are some key provisions affected by the ruling:
The Supreme Court's decision in Lac du Flambeau Band of Lake Superior Chippewa Indians, et al. v. Coughlin has clarified that tribes are subject to certain provisions of the Bankruptcy Code. The bottom line is that while in the past, where tribe ownership has been used as a shield to prevent debtors from clawing back funds in excess of $600 taken during or within 90 days of filing bankruptcy, if you file bankruptcy you are protected and can get your money back and prevent further collections actions. If this has happened to you, contact me at 248.719.5663 immediately so I can help you! The debt ceiling is the maximum amount of money that the United States government is allowed to borrow. If the debt ceiling is not raised, the government will not be able to pay its bills and could default on its debt. This would have a number of negative implications for the financial system, including:
As a lawyer, I often receive questions from clients about debt settlement and debt consolidation as alternatives to bankruptcy. While these options may seem appealing on the surface, I firmly believe that filing for Chapter 7 or Chapter 13 bankruptcy is almost always a better choice. Here's why:
Chapter 7 bankruptcy is sometimes called "liquidation" bankruptcy. This is because the court sells off some of the person's property in order to pay off their debts. This type of bankruptcy is usually for people who don't have a lot of money or property to begin with.
Chapter 13 bankruptcy, on the other hand, is sometimes called a "reorganization" bankruptcy. This is because the person keeps their property and works out a payment plan with the court to pay off their debts over time. This type of bankruptcy is usually for people who have a steady income and can afford to make payments. There are pros and cons to each type of bankruptcy. For Chapter 7, the biggest pro is that the person can usually get rid of all their debts quickly and start fresh. But the con is that they might lose some of their property, like their car or their house. For Chapter 13, the biggest pro is that the person gets to keep their property and pay off their debts over time. But the con is that they have to make regular payments for several years, which can be difficult. Now, let's talk about secured and unsecured creditors. A creditor is someone who is owed money by the person filing for bankruptcy. A secured creditor is someone who has a "security interest" in the person's property. This means that if the person doesn't pay their debt, the creditor can take their property. For example, if someone takes out a loan to buy a car, the bank is a secured creditor because they can repossess the car if the person doesn't make their payments. An unsecured creditor is someone who doesn't have a security interest in the person's property. For example, if someone owes money on a credit card, the credit card company is an unsecured creditor because they can't take anything from the person if they don't pay. In Chapter 7 bankruptcy, secured creditors usually get paid first because they have a security interest in the person's property. If there is any money left over after paying the secured creditors, it goes to the unsecured creditors. In Chapter 13 bankruptcy, the person works out a payment plan with the court that usually includes paying the secured creditors in full over time. Unsecured creditors might get some or all of their money back, depending on how much the person can afford to pay. In most cases they get close to 0%, but it depends on what's left over after net income minus 'reasonable and necessary expenses'. In conclusion, bankruptcy can be a difficult decision to make, but it can also be a way for people to get out of debt and start fresh. Chapter 7 and Chapter 13 have different pros and cons, so it's important to reach out to Sweeney Law Offices to go over your options! During Covid-19, the Federal Government mandated that Federally backed mortgage lenders offer their customers forbearance plans.
You had a right to a COVID hardship forbearance if:
Your initial forbearance plan typically lasted 3 to 6 months. If you needed more time to recover financially, you could request an extension. For most loans, your forbearance could be extended up to 12 months. Some loans were eligible for up to 18 months of forbearance, depending on when your initial forbearance started.
(a) Modify your loan. (b) Refinance your loan. (c) File Chapter 13 to get caught up. Let's go through each. Assuming your lender wants to resolve your deficiency for a loan modification, and you qualify for one based on your income and expenses, they can be of two types. First, they could offer you a separate claim modification. This type of adjustment pulls your forbearance balance away and segregates it until your loan is paid in full. It collects no interest, and you are not required to make payments on it. This is often the best outcome for these types of forbearance plans. However, one day, you'll run into that claim again when you want to sell, refinance or pay off your home in full. Be prepared for it as part of your long term plans, and also be aware that refinancing with that claim may be more difficult than without it. Second, they could offer that they modify your entire loan over 30 to 40 more years, including the balance of your forbearance. This is the worst of the two outcomes, likely increasing your payments each month and over time, the amount the mortgage company will receive with interest. It will be much higher than you would have paid had you stayed current. However, this option makes it more likely that you can refinance in the future. Your second option would be to refinance your home, but you may find it difficult to locate a lender who will work with you after a forbearance. You may need to wait 12 or more months with on time payments to qualify. While refinancing can look attractive, there are many downsides. First, the fees and costs that you might not notice get pumped into the loan, and you will pay tens of thousands of dollars on those over time. Second, oftentimes consumers will use a refinancing to pay off unsecured debt - essentially putting their home at risk over credit cards, and then paying interest over the next 30 years. It's a win for the creditors, but a loss for you, especially over time. Third, interest rates have gone up significantly recently. This can mean hundreds of dollars more per month than you would have paid during the pandemic. Your third option would be Chapter 13 bankruptcy. Many people have a negative view of bankruptcy in general thanks to the drum beat of negative press from the media and banks, and while it does hit your credit, it is often a perfect choice after major crisis like recessions and pandemics. Chapter 13 will help you get caught up, interest-free, over as long as 60 months. It will often pay your unsecured creditors as little as zero cents on the dollar, and resolve tax debt, vehicle payments and any other debt you might have. It is a one-payment plan, encompassing all of your debt, and often saving you thousands if not tens of thousands of dollars. It stops collections actions, stops foreclosures, and if your mortgage payment is too high to begin with, it can give you an opportunity to handle your other debt while requesting a loan modification within the safety of Chapter 13. If you have questions about any of these options, reach out to me personally so I can help you guide you on the best one to chose! - Jesse Sweeney, 248.719.5663 While it's a difficult decision to make, after going through your budget and realizing you can't pay off your debts before the year 3000, you decide to file bankruptcy. But what does it take to plan for a bankruptcy? Is there even such a thing? While there isn't a lot you need to do before filing, except speak to an attorney, there are some things you absolutely want to avoid to make your bankruptcy case as smooth as possible.
1. DON'T GIVE AWAY ANY PROPERTY One of the biggest mistakes I see before people file bankruptcy is that sometimes they decide to sign the title over to their home or car to a friend or relative 'to protect it from creditors'. Not only won't this protect your property from creditors, but it could put those items at greater risk. In bankruptcy you have the ability to protect some personal property and real estate with state or federal exemptions to a certain extent, and if you cannot protect all of it in a Chapter 7, you can typically in a Chapter 13 case. Even if you don't file a bankruptcy, giving away your property to a family member or friend when you owe your creditors money can be completely set aside by those creditors. Instead, before you act rashly, contact an attorney to go over what you need to do with your big ticket items to ensure they are protected. If you want to see what could go wrong when transferring your property to someone else, check out Tiger King on Netflix. 2. DON'T SELL ANY PROPERTY As a corollary to the first mistake, this isn't the time to start raising cash. This can present two problems: first, the sale might be closely scrutinized to determine if it was at fair market value. That could mean the trustee in your case contacts the buyer and sets the sale aside. Second, assuming you sell the property and it was exempt, converting it to cash may not protect it at all. Exemptions are different for each type of property. For example, you may be able to exempt thousands of dollars for your personal residence, but much less once it is sold, depending on the circumstance. So do yourself a huge favor – talk to an attorney first before you make any major moves. 3. DON'T BORROW MONEY If you're filing bankruptcy, now is not the time to borrow money. Why? It looks bad if you borrow on the eve of filing, especially if it's unsecured debt like a line of credit or a credit card. If you borrow money and then file bankruptcy right away, creditors may object to your discharge unless you exclude them from the filing. Moreover, what are you borrowing money for exactly, and where will that money go once it is borrowed? If it's going to buy food, that may not be as big of a problem as going to Disney World, but before you borrow a penny, talk to an attorney. As a corollary to this, don't co-sign on any debts, whether it's for your friend or family member. Not only could you put their co-signed collateral in jeopardy, it may make you chose between your relationship and getting a fresh start from your debt. 4. DON'T PAY FAMILY, FRIENDS OR ASSOCIATES BACK Borrowing before filing is one thing, but paying back your relative or your buddy who loaned you more then $600 could be a problem. Paying back an 'insider' as they are called, more than $600 in the prior year before filing means that the payment can be clawed back by the trustee and distributed to your creditors. Worse? You may feel morally compelled to pay them once your case is over, and then you'll wind up paying twice. Instead, let your friend or family member know you cannot pay this debt, or any debts and you are filing bankruptcy. Do you believe you must pay them back, no matter the consequences and you don't want the trustee to take this money from then? You can do that, but you're going to need to wait another year to file bankruptcy. 5. DON'T GO ON VACATION It's certainly not illegal to go on vacation before filing your bankruptcy case, but understand that your bank accounts may be subject to careful examination, and if they see you dropped $1500 to go to Europe a few weeks before filing, they might have reason to believe your case was not filed in good faith. Also, did you have to borrow money to go on that vacation? See number 3 above. In summary, these are the top 5 things you don't want to do before filing bankruptcy. There are more than these above, but in general, if anything you're trying to do involves more than $600, stop, wait, and seek legal advice. Big moves arouse suspicion. Lay low, and you'll stay under the radar. For more information, feel free to contact me. |
AuthorJesse Sweeney is the President of Sweeney Law Offices, and an American Board Certified bankruptcy attorney licensed in Michigan and Colorado. He has been practicing for over 20 years, and has spoken on a variety of bankruptcy related topics. Archives
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