Portland Bankruptcy Lawyer Blog

Probably the most annoying thing I see in my practice as a Portland Oregon bankruptcy attorney is when a client has been duped by a credit consolidation scam and come to me for help. The typical scenario I see goes something like this. Client has over 10,000 in debt; mostly credit cards with some medical bills or child support in there. They are current or just falling behind and don't want to consider bankruptcy for either its complexity or its social stigma (there will be a future article on this topic). So they go to the credit consolidators.

You've probably seen them on TV all over the place these days. The promise to work with your credit card companies, stop the collections calls, reduce your debt and help you avoid bankruptcy. That sounds all well and good but in reality they do very little but snatch your money. The typical arrangement that's place on my lawyer desk after something has gone wrong with the consolidator usually involves my clients paying 2000-4000 dollars in fee's to the company, the company setting up a savings account for the client over a couple year period then promising to negotiate the debt once enough money is saved. Of course they get their fee upfront with no promise of the outcome.

In fact many credit card companies refuse to work with these companies and so their calls, lawsuits, garnishments, etc will continue. Even cards in their 'plan' will still try to collect the debt they are owed. All the while you are making your monthly payment, of which about 70% is your fee to the company with their promise that they are working 'behind the scenes' with the 'secrets' the card companies don't want you to know about. Its a scam in my opinion. While a bankruptcy may not be for everyone its usually better to either do it on your own and save to compromise with your lenders directly before going to any consolidator. Its always a good idea to talk to a licensed bankruptcy lawyer to learn your options. A good lawyer will tell you if its possible to work it out on your own or perhaps you should file a Chapter 7; I don't think I've ever recommended a client to go to a consolidator. Just my .02.

Enjoy the day

This will be a short one today. This week it seemed that I had many consults with clients with what I consider a small amount of debt. While I understand that to them the amount is beyond their current ability to pay and is large, in a bankruptcy context it can disqualify them from utilizing its procedures. Technically you can file a Chapter 7 bankruptcy with any amount of debt. I can help a client discharge $55,000 or it can be $1.00; it doesn't really matter.

What does matter is in the counsel you receive from a knowledgeable bankruptcy attorney; they should help you decide whether a filing makes sense both in the total costs to the client and the overall scheme of the clients financial life. In my practice I typically set a floor of around $10,000.00 for a single person or client. There are always exceptions to this and I've helped file for clients with much lower debt loads, so it always 'depends'. But in general if bankruptcy costs my client $900 or $1200 dollars and they only had $2000.00 in debt then that wouldn't make a lot of sense and a good lawyer would typically reject a case like this. Basically it comes down to a cost benefit analysis that you should discuss with your bankruptcy lawyer.

Could a client discharge one dollar; you bet. Should they? Probably not. Talk to a lawyer and see what might be right for you. Our office can always give you some clear paths and understanding of the process to help you make a decision.

Be well

On the lighter side today I thought it would be good for this Portland Oregon bankruptcy lawyer to give you some advice if you are heading to downtown Portland on where eat and drink around your hearing. As much as some clients would like for me to tell them what bars to go to; I'll confine this writing to coffee/food places near the hearing building.

The building currently housing the Chapter 7 341 meetings is located on Broadway in downtown Portland. Here's a link: http://tiny.cc/7bqZy If you start from the courthouse you'll find a Starbucks about 2 blocks away; before that is another coffee shop on 5th and salmon. Go figure there are coffee places in Portland Oregon. If I have a later hearing I like to stick around downtown and head to the melting pot; which is a great fondue place directly across the street from the Bankruptcy hearing rooms. Its a bit spendy but if you have any money left over after meeting with the trustee it might be worth a shot.

On the lower end of the spectrum there is a McDonald's about 2 blocks away down on 5th; I'm partial to their breakfast burritos now so I stop there a lot before my morning bankruptcy trustee meetings. Just make sure you bring some mints. If you are really feeling like something authentic to downtown; try walking down to pioneer square and hitting the vendor carts. The hot dog stand and the Philly cheese steaks are my favorite and on a sunny day sitting in the square is a nice break from the hearings.

Enjoy the day.

A big part of the work in putting together a Chapter 7 bankruptcy petition is finding acceptable, honest, fair market value for the debtors assets. It usually takes a good bit of work between my clients and my firm to make sure we are valuing everything fairly and according to good bankruptcy practice. There are basically three areas where this comes up most often. However its important to note that all assets need a value assigned; there are just too many classes to address here so if you have any questions please contact your attorney or do you own research to make sure you are complaint.

Continue reading "It's all about value: Finding the values you need when filing a Chapter 7 Bankruptcy" »

More and more these days in my bankruptcy practice I have clients coming to me as their lawyer and wanting to know what to do with not only their credit card debt but also their tax bills. I'll talk briefly today on what a Chapter 7 bankruptcy can do in terms of your Federal IRS tax debt.

The first question I must ask my bankruptcy clients is "did you file your taxes? And When?" These are probably the two most important questions when figuring out whether you can discharge your old IRS tax debt. The general rule of thumb is that you must have a tax debt that's at least 3 years old and that the obligation to pay that debt came about also 3 years back.

Continue reading "Chapter 7 Bankruptcy and Taxes: Does the IRS always get paid?" »