Bankruptcy Lawyers PLLC

Hospital, Detroit Area forced to give up bogus claim for co-pays, Client saves 6 Thousand Dollars

Expert Lawyer — Tue, 08 Jun 2010 17:31:35 +0000

A local hospital,Detroit Michigan area sued my client for $6,000 in co-pays after the health insurance paid them $180,000.00. The client and I were sure that there were multiple overcharges and challenged the bill in court. The hospital’s claim was dismissed because they filed a type of claim that would not have to be supported with a bill – and had no legal support for that assertion. The moral of this story is that collection suits can be successfully defended!

Can You Give Up Your Home in Bankruptcy and Live There Too?

Expert Lawyer — Fri, 28 May 2010 19:41:16 +0000

In my article on Chapter 13 I explained how you can save your home from foreclosure. In this article I’m going to explain how you give up your home and live rent free during and after bankruptcy.

If you file a Chapter 7 or 13 you can choose to “surrender” your home and not pay for it any longer. If you choose to do this the bank is then allowed to foreclose on your home. After the foreclosure process is completed you have six months, under Michigan law, to “redeem” your home. Redeeming your home means paying off the mortgage.

Most people are not able to redeem. However, during these six months, the banks will not put you out on the off chance that you will. Thus, you have the six months, plus any time before the foreclosure that you can live in your home rent free. Even better, some banks do not push you out afterwards! I have personally known of cases where people have lived in their homes as long as two years after the foreclosure rent free!

Collection Agency Pays 2 Thousand Dollars for Abusive Practices

Expert Lawyer — Mon, 24 May 2010 21:15:54 +0000

A collection agency violated the Fair Debt Collections Practices Act by contacting the client after it was informed by both the client and the attorney that the client was represented by an attorney. Suit was filed and settled for $2,000.00. Fight back! (248) 432-1612, SE Michigan only.

Your Options for Keeping Your House

Expert Lawyer — Wed, 19 May 2010 15:51:38 +0000

You were injured at work and didn’t receive a pay check for several months. Your house payment fell behind. Now the bank wants to repossess. What can you do in bankruptcy?

Chapter 7 and Chapter 13 give you two very different options for keeping your house. In Chapter 7 the only thing you can do is bring the debt current and sign a reaffirmation agreement. This type of agreement basically says that you are pretending that the bankruptcy didn’t happen, and your debt on the mortgage and note will not be discharged at the end.

If you could do this you probably wouldn’t be in bankruptcy. Fortunately, Chapter 13 gives you a better option. In Chapter 13 you can tell the bank that you will begin making the regular monthly payment and then pay back what you are behind over time, a minimum of 36 months. The bank will have to take this proposal in most cases. At the end of the bankruptcy your loan will be rehabilitated.

20 Thousand Dollar Credit Card Suit Dismissed for Filing Too Late

Expert Lawyer — Mon, 17 May 2010 20:09:41 +0000

Creditor filed a suit to collect a $20,000.00 credit card debt three and a half years after the last payment was made. The Michigan statute of limitations is six years. However, the credit card agreement stated that Delaware law governed all terms of the agreement. Delaware law provides a three year statute of limitation. Case dismissed for filing too late. Moral of the story: There are defenses to credit card debt. Call me at (248) 432-1612 to have your case reviewed.

What is Chapter 11?

Expert Lawyer — Wed, 12 May 2010 18:53:21 +0000

What is Chapter 11?

Chapter 11, like Chapter 13, is a reorganization process. It is primarily for businesses but is available for individuals as well. Due to its expense Chapter 13 is usually a better option for individuals, however in certain cases an individual may be ineligible for Chapter 13 due to the debt limitations in that chapter. If this is the case an individual may have no choice except to file a Chapter 11.

Unlike a Chapter 13 or Chapter 7, in most cases the debtor remains in control of its possessions and business affairs as a “debtor in possession” instead of having a trustee appointed. However, this status is very strictly watched by the court and the debtor must strictly abide by the court’s orders to remain in this position. Like the other chapters the automatic stay goes into effect at the time the case is filed.

The debtor must prepare a Chapter 11 plan and file it with the court. It must also prepare, file and have a “disclosure statement” approved by the court. If the disclosure statement is approved by the court it is sent to the creditors with the plan. The creditors may vote on accepting or rejecting the plan. If the plan is accepted it may be confirmed by the court. If the plan is confirmed the debtor receives its discharge. The debtor must then carry out the plan. After the plan is completed a final report is filed and the case is closed.

Lawsuit to Enforce Arbitration Award Dismissed

Expert Lawyer — Tue, 11 May 2010 17:07:37 +0000

Creditor sent a credit card dispute to arbitration. The arbitration was held in Delaware pursuant to the credit card agreement. (Probably a violation of the Fair Debt Collection Practices Act) Creditor then sought to reduce the arbitration award to judgment in Michigan. A provision in the credit card agreement provided that Delaware law applied to the agreement. Delaware law provided that the arbitration award was to be enforced in Delaware. Despite Delaware law the creditor sought to reduce it to judgment in Michigan.

The action was met with an immediate motion to dismiss for lack of jurisdiction. The Michigan court agreed that Delaware law applied and the proper place to bring the action was in Delaware. Ironically the creditor argued that it was forbidden to bring suit in Delaware under the Fair Debt Collections Practice Act. The Michigan court ruled that the specific language of the contract bound the creditor and dismissed the case. To date the suit has not brought in Delaware and the creditor has an unenforceable $27,000.00 arbitration award.

Once again, debt collection actions are defensible. Contact me to see if you wish to defend rather than go into bankruptcy.

The Fair Debt Collections Practice Act

Expert Lawyer — Fri, 07 May 2010 19:21:37 +0000

Believe it or not debt collectors are regulated by law. The reason you probably don’t believe it is because they routinely ignore the law. Debt collectors are forbidden by Federal Law from:

1. Physically threatening you;

2. Using obscene language;

3. Continuous calling;

4. Failing to identify themselves;

5. Calling before 8 AM and after 9 PM;

6. Calling you at work if your employer forbids it;

7. Calling you if they know you are represented by an attorney;

8. Calling anybody except you, your attorney, or a credit reporting agency about your debt;

9. Contacting you after you notify them in writing that you are not going to pay the debt.

Furthermore, if you “dispute” the debt or demand “verification” of the debt in writing the debt collector must cease debt collection activity until “verification” is provided.

Failure to comply with any of these provisions results in damages of at least $1,000.00 plus your attorneys fees.

If you are the victim of any of these tactics, and reside in South East Michigan, please feel free to contact me at (248) 432-1612 to discuss your options.

What is the Difference Between the Discharge and the Automatic Stay?

Expert Lawyer — Thu, 06 May 2010 17:07:24 +0000

There are two events in bankruptcy which bring collection efforts to a halt. They are very different in the way that they operate. The first is the automatic stay. The second is the discharge.

The automatic stay comes into effect at the time of filing. It basically tells your creditors that you have filed bankruptcy and is an order from the court that your creditors have to stop trying to collect their debts from you. (See the separate article on the effect of the stay for more detail) However, it only lasts as long as the bankruptcy is pending. If the case is dismissed the stay is dismissed with it. If your case is dismissed after filing there are penalties for re-filing. The second time the case is filed you have to ask for court permission to extend the stay beyond a thirty day period after the re-filing. The third time you file there is no stay after filing unless the court grants permission to put one place. Finally, the stay does not cancel the debt.

The discharge, again, is different. The discharge cancels the debt. The discharge is entered at the end of the case. At the same time the discharge is granted a permanent injunction (a permanent order from the court) is entered forbidding your creditors to ever try to collect the debt again. Like the automatic stay, if the creditors try to collect in violation of the discharge injunction, they will be fined and you will be awarded damages and attorneys fees.

What is Chapter 13?

Expert Lawyer — Fri, 30 Apr 2010 17:16:38 +0000

Chapter 13 Bankruptcy is a bankruptcy process that allows the debtor(s) to repay their debt, partially or fully, over time. Its use is required when certain income tests are made. Otherwise, it is optional. It is most useful when the debtor(s) want to save a home or there is too much equity in the debtor(s) home. It is also useful when there are significant IRS problems or student loan debt.

In a chapter 13 case we first prepare a budget based upon the debtor(s) net income and average monthly expenses. We include secured debt payments, such as a car and/or mortgage payment. Whatever is left over after the budget is prepared is used to repay unsecured debts, such as credit card debts over the life of the plan.

Here are some very simplified examples:

Joe and Mary come to me because they are several months behind on their mortgage, totaling $3,600. They have $14,400.00 in credit card debt. They make $3,500 net per month. They have a mortgage payment of $1,000.00 per month, car payments of $500.00 month. Their monthly expenses are $1,000. So, we have $500.00 per month left over after meeting their expenses and secured debt payments. The first $100.00 of this will go to pay the amount they are behind on their mortgage – it will caught up at the end of a 36 month plan. The remaining $400.00 will go to pay the credit card debt. At $400.00 per month the credit card debt will be paid in full in 36 months.

There are three advantages for Joe and Mary under this hypothetical. First, they can catch up their mortgage and save their home from foreclosure. Second, because of the Automatic Stay (see the article entitled “Bankruptcy Stops Debt Collector Harassment!”) any pending foreclosure, garnishment, or just simple harassment stops while they are in bankruptcy. Third, all interest on the credit card debt stops as of the filing date – saving them thousands of dollars.

Here’s another hypothetical. Instead of $14,400.00 in debt Joe and Mary have $28,800.00 in credit card debt. At $400.00 per month there is only enough money to re-pay 50% of this over the 36 month plan. At the end of the plan Joe and Mary will get a discharge (forgiveness) of the remaining 50%.

The advantages here are the same as before with the additional advantage of the discharge. Chapter 13 requires that the debtor(s) pay as much as they can afford into the plan – but also allows forgiveness of whatever debt can’t be repaid. Theoretically, debtor(s) can repay as little as 1% of their debt.