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Friday, March 25, 2011

Bankruptcy - can you just amend to make the problems go away?

The answer usually is yes... but this court decision begs to differ.
As quoted in the recent 7th Circuit decision

Stamat v. Neary, No. 09-3448 (March 24, 2011) N.D. Ill., E. Div. Affirmed

The US trustee objected to discharge of the debtor under 11 USC 724(a)(4). The debtor had several glaring omissions and errors in the schedules and statement of financial affairs. Apparently, the debtor misstated income on debtor's tax return, although defunct at the time of filing, the debtor failed to schedule interests in 2 former businesses, and 2 limited partnerships. Debtor also failed to list proceeds of the refinance of the debtors home, with receipts totaling $90,000. The court determined that these were not mere oversights for which an amendment could be made. the 7th circuit said that the bankruptcy court could properly rule that these omissions and errors were material and reckless given debtors' post-secondary education and business experience. The debtor did amend to correct these issues, but the court ruled that the objection to discharge would stand, as these did not mitigate the damage that was already done in the case due to the reckless omissions of the material facts of the case.

Therefore, moral of the story is to list all assets, debts, and fully complete the statement of financial affairs and the rest of the bankruptcy petition as required by law. You can't always file now, and fix them up later. Always use a competent, and diligent bankruptcy attorney when filing your case.

As a Chicago bankruptcy attorney, I understand the importance of having a bankruptcy petition that is true, accurate and complete, done right, the first time around.

Thursday, March 03, 2011

Debt Consolidation Companies

Hi All.
As I've discussed several times before, many clients come to me seeking help regarding their debts, after having tried every way to salvage their credit.

Among efforts they have tried:

- Debt Negotiation with creditors
- Debt Consolidation companies
- Debt Settlement Companies
- Rolling the dice and hiding from creditor letters, phone calls and lawsuits

Nearly every client who come to me, stating that they have tried any or all of the above, have told me they just don't work, and they are in a worse position than they were before they started!

Nothing can be worse than putting all your "eggs in one 'credit basket" just to find out that the basket has a hole in it!! I've heard nightmares of these companies who promise the world and do little but cash the debtors check. There have been lawsuits filed in various states in hopes to shut down this consumer fraud that is rampant in the credit-debt world.

We are here to help. Talk to an experienced attorney who handles debt matters for clients on a day to day basis. Bankruptcy could be the answer, even if it sounds scary. Not to worry, things get better after bankruptcy.
Credit scores nearly always improve if you can take the lesson to heart and start rebuilding credit. Bankruptcy clients are getting credit after bankruptcy. They are!
My clients are getting credit cards, loans, car notes, and even homes after bankruptcy.

It does not take forever either! Often a debtor can start rebuilding credit almost immediately after the discharge. You don't need to wait 7 years, which is a horrible misconception I hear all of the time.

With the bankruptcy law change from 2005, Congress now requires debtors to receive debt counseling. In fact,they have to take 2 courses in order to be discharged of their debts in bankruptcy.

These classes can be done online, by phone or in person, and are relatively inexpensive, from free up to about $50 or so for each course.

They offer long term solutions to help get back on track to teach you the real life tools that high school and college often do not!

For a free bankruptcy consultation in Illinois, we are available to help get you on the path to financial freedom.

It's a free consultation, it can't hurt!
Terry

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