Hello everyone. I have been absent from posting on the blog for almost a month due to a death in my family but I will begin posting again regularly sometime this week. In fact, I am going to begin a series of blog articles on the intersection of bankruptcy and family law issues such as divorce, custody, support, domestic violence, and property settlement agreements. So please, sign up for either an email subscription or an RSS feed which you should be able to find to the left of this post. Thanks!
There is a lot of misinformation out there as to who can and who cannot file a Chapter 7 bankruptcy. Some people will lead you to believe that since the passage of the new bankruptcy laws in 2005, only individuals with extremely low incomes can file a Chapter 7. This is another bankruptcy myth that needs to be dispelled.
First off, what is a Chapter 7 bankruptcy?
A Chapter 7 bankruptcy is designed to eliminate a debtor’s dischargeable debt. Some debt may not be dischargeable such as student loans, domestic support obligations, and certain taxes, but unsecured debt, including credit cards, medicals bills, club memberships, and deficiency balances, is typically dischargeable.
A forty year old man in Iowa, Keith Chapman, recently pled guilty to bankruptcy and tax fraud admitting that he made false statements in bankruptcy proceedings for Chapman Lumber. According to the Associated Press as reported by the Chicago Tribune, the Court records indicated that Mr. Chapman diverted more than $450,000 from the company to a bank account and used the money for his personal benefit, including a country club membership, jewelry, golf equipment, clothes, and other items.
Mr. Chapman faces up to 13 years in prison and fines up to $750,000. You can read about other cases involving bankruptcy fraud at the Bankruptcy Fraud Resource Center. The Internal Revenue Service website also publishes real examples of bankruptcy fraud investigations.
Many of you have probably read or heard about the recent staggering statistic regarding the number of foreclosure filings that have been filed nationally in the first two quarters of 2009 – one in 84 U.S. homes had a filing during that time according to RealtyTrac of Irvine, California, which tracks foreclosures nationwide. Well, the Philadelphia Enquirer published the rankings for Pennsylvania and New Jersey in its July 17, 2009 article “Foreclosure filings rise as unemployment takes toll”: Pennsylvania ranked 31st among the 50 states in number of filings (one in 230 homes), and New Jersey was 21st (one in 146 homes).
There have been quite a few news stories lately about sports stars who have filed for bankruptcy relief, along with even a sports team considering filing bankruptcy . The major league ballclub, the Chicago Cubs, is considering filing a Chapter 11 bankruptcy as part of closing the sale of the team by its parent Tribune Co. You can read the July 13, 2009 article in the Chicago Tribune here. If the Cubs seek bankruptcy relief, it would be the first team to file in nearly four decades.
I am not one to discourage people from seeking alternatives to filing bankruptcy, but most of the “alternatives” are not all they are cracked up to be. Advertisements and articles are popping up everywhere offering alternatives to bankruptcy, and the only thing I can say to that is if it is so easy to fix financial problems, why are so many people in such bad financial situations?
It has been one year since Philadelphia instituted its pilot mortgage-foreclosure diversion program. So far, according to the numbers published in the Philadelphia Inquirer on July 1, 2009, the following statistics have indicated that the foreclosure diversion program has been quite successful:
- Number of participating homeowners: 5,000
- Foreclosures averted: 1,400
- Sheriff’s sales postponed for more discussion: 700
You can read more about the program here.
This recent article in the New York Times is a poignant account of what has been happening when debtors enter into the mortgage loan modification process. Many of the examples in this article I have heard similar stories directly from my clients. I have only heard about a few success stories, yet there are allegedly tens of thousands of loan modifications which have been completed.
Hello…Although I have already introduced myself and gave lots of details on this blog’s About page, I thought I might as well give you a brief rundown about me and the blog as its first post. I am an experienced consumer bankruptcy attorney practicing in Philadelphia, PA who is trying to keep abreast of the everchanging law and economy.
I would like this blog to disseminate relevant and interesting information regarding consumer issues, whether it be about the new credit card laws, foreclosure issues, bankruptcy and non-bankruptcy options, debt collection issues, etc. There is a lot of information on this world wide web and hopefully I can bring to this blog’s readers up-to-date insights about relevant consumer topics and point readers in the right direction to find out more information. Please subscribe to the blog so that you can receive all the latest posts.
By the way, I also would like this blog to let people know in the Philadelphia area that I am here, a consumer bankruptcy attorney with compassion and experience. If you, or someone you know, would like to know your options and rights as a debtor and consumer, please contact me at kcoleman@shainberg.com or 215.988.9700.
