Portland Bankruptcy Lawyer Blog

Consumer Bankruptcy Filings Continue to Rise

2009-09-02T20:37:33Z

Just got back into my Tigard office from a short 341 Chapter 7 Hearing and saw this article in my inbox. Just like last month consumer bankrutpcy filings, both Chapter 7 and Chapter 13's, continue to rise.

"Consumers continue to turn to bankruptcy as a shield from the sustained financial pressures of today's economy," said Samuel Gerdano, the executive director of the American Bankruptcy Institute. "As a result, we expect consumer filings to top 1.4 million this year."

At this pace its going to be a busy year for bankruptcy lawyers and a sign of continued tough times for our country.

Out of Country Property: Do I Have To List That Down in my Bankruptcy?

2009-08-25T20:42:46Z

A good question came up the other day from one of my prospective bankruptcy clients. They asked what would happen to their real estate holdings in another country if they choose to file a Chapter 7 bankruptcy with my firm. They also asked if it was something that had to be disclosed since it was not in the U.S. The first question is a bit tricky so I'll address the second part first. Yes. You must disclose the foreign property in your bankruptcy petition. The law makes no distinction between your property located in the U.S. vs. property outside the U.S. If its yours it needs to be listed down in the petition. This would be the same logic if you had a bank account outside the U.S. You must disclose those in your Chapter 7; same goes for all your other assets.

]]> On the question of how would that asset be treated in a bankruptcy filing, I'll give you the typically lawyer answer...It depends. If you are otherwise qualified to file a Chapter 7 under the laws of your State, and in my clients case, Oregon; then as noted above you must disclose the existence of the property. Then we would need to determine a value for that asset. Is there a loan against it; how is the property titled, is their any government intrusion on the property that would preclude its sale? Also what affect would the currency of the home country have on the value currently and at the projected filing date as well as the possible date of the seizure by the trustee? Once you get all that then we would need to know if we can protect any equity that may be in there. Again it would depend. There is case law out there that states if you are not a resident of any State then you cannot claim an exemption in the property; if that was the case then you may have to forfeit the entire property to the trustee. If you can claim an exemption what State would it be. Just because Portland Oregon was your bankruptcy filing location doesn't always mean you would use Oregon exemptions.

As you can see this is a very complex question with a lot of moving parts. In order to successfully navigate such an issue its would be a really good idea to sit down with a knowledgeable bankruptcy attorney in your area to make sure you are property protected. If you are in the Portland Oregon area our team of bankruptcy attorney's would be happy to sit down with you for a no-cost consult and discuss if a Chapter 7, Chapter 13 or other filing would work in your situation. Feel free to contact us directly through this site.

"At times I think and at time I am"

Portland Bankruptcy Lawyer Discusses New Mortgage Value Numbers

2009-08-20T20:09:43Z

Portland Bankruptcy Lawyer Discusses New Mortgage Value Numbers:

In my bankruptcy practice most news releases that I monitor show the Portland, Oregon area in a negative light. While the info below is not great it does show the Portland area mortgage to value ratio's are holding somewhat firm and that for a change we are not the worst in the country.

"First American CoreLogic's Negative Equity Report shows about 24 percent of all Portland-area mortgage holders owed more on their home than it was worth on June 30. That's 114,585 mortgages and about $30 billion in total property value at risk of default. Statewide, about 23 percent were underwater. Nationally, the figure is about 32 percent. Nevada's rate is a stunning 65 percent. Read more from First American's news release. Calculated Risk's graph shows Oregon ranked 15th best in the survey when you include mortgages in negative equity and those near negative equity. Washington state was 16th. "

If your house is underwater water and you are facing trouble making your payments or are already behind, you might want to consider talking to a Chapter 7 or Chapter 13 bankruptcy lawyer to go over your options. Our firm has lawyers trained in getting positive results for our clients under the Bankruptcy laws. Feel free to call our attorney's to set up a no-cost consultation.

-Be well and enjoy the day

Portland Bankruptcy Lawyer Discusses the Failure of the Home Loan Modification Program

2009-08-19T23:02:39Z

Portland Bankruptcy Lawyer Discusses the Failure of the Home Loan Modification Program

Despite all the hype, the much tauted home loan modification programs set up by congress to help troubled homeowners...aren't providing much help. I cannot say this surprises me. As a bankruptcy lawyer in Oregon I hear tales everyday of the long lines, unending document requests, no call backs and 9 month waits. Simply put these programs are not working as advertised. This article details some of those stories and provides some insight on the issue.

In my bankruptcy practice I have Oregon clients coming to me trying to do modifications as part of their overall financial restructuring which usually includes a Chapter 7 or Chapter 13 bankruptcy filing. I must warn them they should not be too optimistic in receiving a modification and we must plan their filing and future finances not relying on that modification coming through. A good bankruptcy lawyer should give their prospective clients both a best-case scenario and a worse case scenario so the client can make a good decision. Hearing more and more of these delayed and denied modification stories keep me from implemented them or relying on them as part of my planing process. I wish it was the other way around as a good modification may keep some of my clients from having to filing a Chapter 7 or Chapter 13 in the first place.

-"It is not what we get. But who we become, what we contribute... that gives meaning to our lives".-

Portland Oregon Bankruptcy Lawyer Discusses Dealing with your Car after a Bankruptcy.

2009-08-18T21:52:13Z

Portland Oregon Bankruptcy Lawyer Discusses Dealing with your Car after a Bankruptcy.

Car loans and getting them straightened out during a Chapter 7 bankruptcy can be a maddening experience. Typically if you want to keep your car and you don't have significant equity in it then you'll be able to continue to make payments.

Typically after filing a bankruptcy petition all payments on the car loan will stop. Then shortly before or after your meeting of the creditors your attorney or you (if you file on your own) will receive a 'reaffirmation' agreement. This is basically a contract between the lender and you stating that you want to keep the car and can afford to make the payments after the Chapter 7 bankruptcy. Its really important to make sure that you get that agreement filed within 45 days of your hearing and long term that you'll be able to make those payments.

One of the selling points by lenders for those agreements is that they are reported on your credit file and can help re-hab your score by showing on time payments. If you read some of my other blog posts you can see my feelings on the need for a credit score at all. Assuming you do want a higher score then these agreements can help. You do need to make very certain either yourself or through your bankruptcy attorney that that agreement is filed and shows up on your report. I have heard of cases where the client didn't see the old car debt on his credit report then went out to buy a new car. Since there wasn't a payoff showing on the credit report he assumed he could but a new car and was able to. Shortly thereafter he received notice that his old car account was past due and the lender was going to repo the car and hold him responsible for the debt. Since it was reaffirmed it may be impossible for him to discharge it and he'd be stuck with the payments on the new car plus the old one. Not a good result. In general these agreements go smoothly and allow debtors to remain in the cars they enjoy and can afford, both during and after their Chapter 7 bankruptcy.

If you have any questions regarding a Chapter 7 bankruptcy, Chapter 13 bankruptcy or general creditor/debtors issues, our attorney's would be happy to go over your options and answer any bankruptcy questions you may have. Feel free to use the contact form or call us and we can set up a time to talk to one of our bankruptcy attorney's.

Live for today

Portland Bankruptcy Attorney Discusses Project Runway Star Jerry Tam's Chapter 7 Filing

2009-08-17T20:01:52Z

Portland Bankruptcy Attorney discusses Project Runway Star Jerry Tam's Chapter 7 filing

Nobody is immune from filing a Chapter 7 Bankruptcy these days. Case in point is Project Runway star Jerry Tam recently filed for a Chapter 7 liquidation bankruptcy. In a sad case of rags to riches to rags; Mr. Tam cashed in his life savings and life insurance policies to launch his own fashion label. He quickly rose up the ranks of the fashion elite and gained prominence on the hit TV show Project Runway. Hope was high prior to his bankruptcy filing.

Citing weak economic conditions and a lack of sales and investor interest Mr. Tam filed his Chapter 7 bankruptcy. This type of filing means that his interest in the fashion label "form" will be liquidated and all of Mr. Tam's property, which is not exempt under State law, will be sold to pay off his creditors. Its an end to a promising label. But without financing and cash flow there was no way it seems for Mr. Tam to continue on. Sometimes a Chapter 7 filing can be the best way to reset a career and start a new direction. We wish Mr. Tam well.

If you have any questions regarding a Chapter 7 bankruptcy feel free to contact one of our bankruptcy lawyers at 503-213-3842 for an over the phone or in person consultation in our Portland Oregon or Tigard Oregon offices.

What Debts can I Leave Out of My Chapter 7 Bankruptcy

2009-08-17T19:58:21Z

I get this question on at least a weekly basis. My clients and perspective clients would sometimes like to leave a debt off their petition or don't want to discharge it so want to leave it out. Sometimes its out of an obligation to the creditor (like a doctor or local business) or sometimes they may be embarrassed and don't want their bankruptcy publicly known. The short answer I give them: You must disclose it all.

When you sign your Chapter 7 petition you declare under the penalty of perjury that you have listed accurate data and that you have disclosed all your debts. The bankruptcy code does not allow one to pick and choose what debts to list down and be noticed about your bankruptcy filing. You simply must poor everything out.

All hope is not lost however. There are strategies that you can employ that can address the concerns noted above. Sometimes you can enter into reaffirmation agreements so that the creditor is repaid; sometimes the notice of the bankruptcy can be sent to an agent and not directly to the creditor. If this is a concern then its always a good idea to have a sit down with a knowledgeable bankruptcy lawyer in Oregon and see what we might be able to do for you; just don't ask us to leave out creditors...It wont happen.

"In three words I can sum up everything I've learned about life; it goes on..."

1-800-CONSOLIDATE: Should you roll it up instead of filing a Chapter 7 Bankruptcy

2009-07-21T15:11:26Z

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

$1.00 in debt: How much debt is too little for a Chapter 7 filing

2009-07-16T23:12:59Z

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

Where to eat before and after your 341 meeting of the creditors in Portland Oregon

2009-07-06T17:11:05Z

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.

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

2009-07-02T18:15:14Z

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.

]]> That said, cars can provide a healthy discussion during your 341 meeting if you don't have a good honest value assigned. The U.S. trustee office in Portland assigns the trustees the NADA guides for car values; some trustee's use these other use Kelly blue book private part value. There is no standard. In my bankruptcy practice I like to pull down values from NADA, Kelly, Black book (auction values) and Edmund's and blend them all together I might sure my clients don't over estimate the qualify. I try to remind them that this isn't a ego thing and we're not trying to get top dollars; we're trying to get an honest assessment of what the car will sell for in today's market. Typically my clients first estimates are higher then what we find Kelly or Edmund's ends up saying. I would suggest that folks take their time with their research; the right value is very important in your bankruptcy filing and if you have any questions be sure to talk to your bankruptcy lawyer. They should have the experience to help you find the proper value for your vehicle. But what about your home?

This is a harder one to come up with. There are no good online measure of a homes value. In my bankruptcy practice I have clients who will return a value that seems either way too high or way too low; my first question is 'where did you get this value?" "On zillow.com" they'll reply. While sometimes I may be tempted to use a value zillow comes up with I know that its not a true market value and that the trustee office typically doesn't put much stock in its value. I've also seen online valuations from Bank of America come up too; same issue. If it looks like there may be an exemption issue or if their may be some equity in the property I will typically suggest that getting a competitive market analysis from a licensed real estate broker is a good idea. This report will typically have recent sales for similar property in your neighborhood and can provide solid evidence of what your home may be worth. You can also pay for an appraisal but these are rarely needed in most low or no asset Chapter 7 bankruptcy cases. As always; this is a complex issue and cannot be addressed in just this article; so please consult a bankruptcy attorney with your personal case details or carefully do your own research.

If you put tomfoolery into a computer, nothing comes out of it but tomfoolery. But this tomfoolery, having passed through a very expensive machine, is somehow ennobled and no-one dares criticize it.

Chapter 7 Bankruptcy and Taxes: Does the IRS always get paid?

2009-07-02T18:08:08Z

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.

]]> The best example would be its 2009 now; you filed your taxes on time back in 2003 and owed the IRS 5,000. You never paid the bill and now you owe 9,000 with interest and penalties. Since you filed the return on time and your debt arose three years ago due to the filing you should be able to discharge that debt.

What if I didn't file, you ask? Well then it will depend. An easy case is where the IRS has filed for you; even if the debt is more than 3 years old but you haven't filed or the IRS filed on your behalf the debt is non-dischargeable in a Chapter 7 bankruptcy. Basically the main issue that tax debt and chapter 7's revolve around with is time.

Tax law and dischargability is a very complex area of bankruptcy law and this short discussion covers only the most basic rules...and these rules change. Please be sure to seek out a good bankruptcy firm and sit down with an attorney before making a decisions or taking any actions.

-One day at a time

ITS OK TO GIVE MY BROTHER MY ANTIQUE FISHIN' POLE BEFORE BANKRUPTCY RIGHT?

2009-06-30T23:16:57Z

So like it or not every bankruptcy lawyer in Portland has probably had a question like this come up. The client is worried about loosing their stuff as part of a Chapter 7 bankruptcy filing. They have a sentimental item they don't want to part with or just don't think their creditors should not be able to get paid back from its sale. They come to an attorney and look for a way to hide these items. Can they do it...absolutely not.

Usually with a chuckle I have to inform these clients that we must disclosure everything they owe and be 100% honest in the entire filing. If you do that then usually the bankruptcy filings go very smoothly. Do it not (as yoda would say) and you can get screwed. Perjury and fines come to mind; plus if you talk your lawyer into doing it, they could loose their license. So what to do?

A skilled bankruptcy attorney should be able to find an exemption for the item you are looking for. Clients seem to forgot that there are exemptions for jewelry, home equity, mobile homes, furs, livestock, firearms, etc. In my practice I can usually find protection for my clients items; it just comes down to value. The problem I've found with clients seeking a quick fix to their asset problem is that they are overvaluing the item they are trying to hide. Once I dig into their case and see what it is they are talking about and talk with them on how to properly value these items and they provide back that data we see that it easily falls within an exemption and is protected. This is a much better route then playing games and trying to hide the items...believe me the Court and Trustee has seen it all and will find it; much better to be honest and comply with the court and have a clean filing. Honestly is always the best policy.

Have a prosperous day

Bankruptcy and Student Loans: Are you stuck with them forever?

2009-06-30T01:09:56Z

Today issue is a common one in my bankruptcy practice and as a lawyer I'm presented with this question all the time. What to do with my student loans when I'm filing for bankruptcy? The hard part for me is that the answer is pretty simple and not one that I like telling. Basically you are going to be stuck with your student loans.

The law is very clear that student loans are darn near impossible to discharge in a chapter 7 bankruptcy filing. As a lawyer and working with my bankruptcy clients I would have to show that the debtor has no good faith or likely way to pay back the loans in their lifetime. Basically a case of extreme hardship. The bankruptcy courts have ruled that there is a very narrow definition of hardship and granting requests for discharge on student loans are pretty rare.

]]> The way I explain it to my clients who ask is basically this: You need to be in such a terrible emotional or physical state that the prospects of you working again and earning a living are virtually nil. I tell my clients that you darn near need to be in a coma or committed to an institution before a discharge would be granted. Temporary problems typically do not cut it.

In short, as part of the planning I do with my clients in making sure a Chapter 7 bankruptcy filing is right for them is a thorough analysis of all their debt, including student loans and making sure that when they exit a Chapter 7 with their student loans in tact they are able to make their payment since typically we cannot do anything with them in the filing.

Finally, like everything law and bankruptcy there are variations and exceptions to many rules and this article is just a short description of the very basics and should not be taken as legal advice. Please discuss any questions about student loans and their effect on you when considering bankruptcy with a knowledgeable attorney.

Have an exultant day.

Bankruptcy and Lawyers: Do you really need one to file a Chapter 7?

2009-06-24T23:17:45Z

I'm sure this is heresy, but I'm here to tell you that it is not required to have a lawyer to file a Chapter 7 bankruptcy in Oregon. I'm sure this sounds odd coming from a Bankruptcy attorney but its honest. Not all cases require the help of an attorney and in many cases the persons finances would preclude them from paying for an attorney in the first place. I'm not trying to cost myself business but I think its important to be honest with people and make sure they understand all their options attorney use or not.

]]> When you do you not need an attorney? Typically if your case is simple, you don't' have many assets you are trying to protect and the debts you have are consumer in nature. The problem that some potential clients run into is that they have a fairly small amount of debt, say 4-8 thousand dollars but one or more of those debts has gone to garnishment or levy and they 25% reduction is forcing their family into a tight financial bind. An attorney assisted Chapter 7 will probably run between 700-1,000 dollars plus court fees which they do not have or could not come up with in a short enough time to stop the garnishments. If the facts of the case are straight forward I may advise them to do it on their own.

When I do that I note to them that there are many great references out there to help them prepare their petitions. Nolo press (www.nolo.com) has a great book out there for doing your own Chapter 7. I also advise them to look at the Oregon bankruptcy Court website (www.orb.uscourts.gov) for guidance. You can typically find what you need in those places. People should not be afraid of proceeding on their own if they take the time and do their research. If they do that then a Pro se filing is something they can do.

As always its a good idea to talk to a bankruptcy attorney before you decide and make sure you are not missing something obvious. Most attorneys have free or low cost consults and they can help you figure out whether your filing is something you may need help with. The law in this area is complex but still manageable for the non-attorney.

Be well and live for today