Kentucky Bankruptcy Law

Counsel with Care

Medical Bankruptcy

A young woman approached me wondering if “medical bankruptcy” was actually “a thing”. She had a lot of medical debt and a friend encouraged her to contact this place that promised to get rid of medical debt for $71.00. I had to disappoint her because one cannot just file on certain debts; all your debts must come in. Also, a bankruptcy for $71.00 is a scam. They are just selling forms that can be obtained online for free.

November 27, 2013 Posted by | Bankruptcy, Chapter 13, Chapter 7, Debt solution centers, Discharge, Fraud | , , , , | Leave a comment

Caveat Emptor: Debt settlement and “consolidation” services

The National Association of Consumer Bankruptcy Attorneys (NACBA) of whom I am a member has provided a great resource for folks struggling with debt and yet are trying to avoid bankruptcy. Here is an excerpt from the document attached here NACBA debt settlement trap consumer alert:

“Already struggling with home foreclosures, harsh bank and credit card fees, and other major financial challenges, America’s most deeply indebted consumers are now falling victim to a major new threat: so-called “debt settlement” schemes that promise to make clients “debt free” in a relatively short period of time. Unfortunately, most consumers who pursue debt settlement services find themselves facing not relief but even steeper financial losses.

Even the industry acknowledges – though not in its ever-present radio and online advertising–that debt settlement schemes fail to work for about two-thirds of clients. Federal and state officials put the debt-settlement success rate even lower – at about one in 10 cases – meaning that the vast majority of unwary and uninformed consumers end up with more red ink, not the promised debt-free outcome.”

I can tell you that a large percentage of my clients come in after trying a debt settlement service only to have thrown away scarce money.  So, I recommend you read this entire article before engaging a debt settlement center. There is only one reputable debt settlement center that I am aware of and they have an office here in Lexington, Ky.

May 31, 2013 Posted by | Bankruptcy, Chapter 13, Chapter 7, Debt solution centers, Fraud | , , , , , , , , , , | 4 Comments

Read this before trying a debt settlement center:

The National Association of Consumer Bankruptcy Attorneys (NACBA) of whom I am a member has provided a great resource for folks struggling with debt and yet are trying to avoid bankruptcy. Here is an excerpt from the document attached here NACBA debt settlement trap consumer alert:

“Already struggling with home foreclosures, harsh bank and credit card fees, and other major financial challenges, America’s most deeply indebted consumers are now falling victim to a major new threat: so-called “debt settlement” schemes that promise to make clients “debt free” in a relatively short period of time. Unfortunately, most consumers who pursue debt settlement services find themselves facing not relief but even steeper financial losses.

Even the industry acknowledges – though not in its ever-present radio and online advertising–that debt settlement schemes fail to work for about two-thirds of clients. Federal and state officials put the debt-settlement success rate even lower – at about one in 10 cases – meaning that the vast majority of unwary and uninformed consumers end up with more red ink, not the promised debt-free outcome.”

I can tell you that a large percentage of my clients come in after trying a debt settlement service only to have thrown away scarce money.  So, I recommend you read this entire article before engaging a debt settlement center. There is only one reputable debt settlement center that I am aware of and they have an office here in Lexington, Ky.

October 29, 2012 Posted by | Bankruptcy, Chapter 13, Chapter 7, Debt solution centers | , , , , , , , , , , | 1 Comment

Miracles HAMPen

I met with a new client recently and listened as they described their fifteen month attempt at getting a home loan modification. This time, though, the client had retained a national law firm to negotiated the modification. Did I mention they had been at this for fifteen months with professional assistance? The arrears now extended into the tens of thousands of dollars. They want to save their home!

My heart went out to them and I ended up feeling bad for being so negative about their prospects for finally getting the modification in place. They showed me a correspondence asking for just two more documents. So close….oh, why can I not encourage them on and give them some hope that these last two documents really would be the last two? What if they really are that close and here I am discouraging them? I am sure I mentioned the fifteen months invested so far…Sorry, I really want to be hopeful for them and I just keep being negative.

I want this home loan modification to work, but the best I can muster is this: I absolutely believe that miracles happen every day. Truly I do. I know this may sound like sarcasm and to a certain extent it is because I find it easier to believe the lame walking and the blind seeing than I do a bank modifying a loan voluntarily. But, I do believe in miracles and so I believe that home loan modifications happen. In fact, I have personal knowledge of one. I just ask that folks consider where their hope is springing from. If your hope is based solely in the representations made by the bank, then it is time to get a back up plan and start preparing along other lines. If you have hired an agency or law firm to do a modification, they need to be able to show you if your income, expenses and home loan debt fall within the ranges where you should qualify. Otherwise, take your business elsewhere.

September 25, 2012 Posted by | Bankruptcy, Chapter 13, Debt solution centers, Foreclosure, Home loan modifications, Plan, Pre-filing planning, Property (exempt, Security interests | , , , , , , , , , , | 1 Comment

Be cautious of debt solution centers

I just saw an advertisement for a debt solutions center that promises to settle your debts for pennies on the dollar. Many of these agencies are pure hogwash! What they do is have you pay in hundreds of dollars a month, charge huge fees, and then occasionally get a creditor to accept a lump some payment for less than you owe – usually for sixty pennies or more on the dollar (rather than just a few pennies). All too often, your money just disappears into a black hole and your debt situation ends up worse rather than better. Even when you do get a debt forgiven for less than what you owe, you get a nice surprise in January of the next year. Any debt forgiveness over $600.00 gets reported by the creditor as income to you. You have to pay taxes on forgiven debt and chances are money is still really tight for you and you don’t have the cash to cover the extra taxes.

So, you have paid huge fees to convert dischargeable credit card debt into non-dischargeable tax debt.

There are legitimate debt help agencies. One that I have had some experience with and feel good about is Apprisen Consumer Credit Counseling Service that I have mentioned before. They will sit down with you and tell you what relief you can expect and what your monthly fee would be and where it would go. The fees are distributed to creditors monthly. If, instead, the agency wants to just collect a large pool of cash with the notion that they may work out a lump sum payout, run away – run far, far away.

January 23, 2010 Posted by | Bankruptcy, Debt solution centers | , , , | 5 Comments