By Donald A. Hayes, Attorney at Law

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Everyone has a certain amount of credit card debt. In my practice I encounter people with credit card debt anywhere from $10,000 to over $100,000.The minimum payments due on a balance of $20,000 is approximately $600 or 3% of the balance. The minimum payment varies with each card issuer, but 3% is normal. Assuming a 22% interest rate, $366 of the $600 you pay goes toward interest. If your late on your payment, add another $25 or so. So if you do the math, when you are late, making a minimum monthly payment of $600 only reduces the balance by $209! And if you have used the card at all in the last 30 days you may be going into the hole each month even though you are making a payment of $600 a month! It=s easy to see why credit card balances never seem to go down, despite your making regular monthly payments. Continue reading →

By Donald A. Hayes, Attorney at Law

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Congress has allowed commercial credit card lenders to charge exorbitant interest rates of 21% and higher when at the same time the corporate prime rate, the home loan rate, and the new car rates are all below 10%. If you or I attempted to charge such rates it would be considered usurious and quite illegal. Why is this? The unstated policy of Congress is to allow the free flow of credit to spur the economy thereby maximizing tax revenues and lowering unemployment. As a trade off Congress, by enacting Bankruptcy laws, allows debtors to discharge their credit card, and other debt, so they never have to pay it back. This appears to be a fair trade off until we look closer at who is really making out. Continue reading →

By Donald A. Hayes, Attorney at Law

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Sadly this is tax season and a question often arises: can I discharge taxes in bankruptcy? The answer may surprise you, but yes you can discharge some taxes in bankruptcy depending on the type of taxes owed and other circumstances. Chapters 7 and 13 offer different forms of relief from taxes. The following is a general overview of discharging personal income taxes in Bankruptcy. In order to get a discharge of personal liability for tax obligations in a Chapter 7 Bankruptcy case: Continue reading →

By Donald A. Hayes, Attorney at Law

 

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Bankruptcy Code ‘523 (a)(2) makes obligations incurred through fraud non-dischargeable. The three basic types of fraud include: (1) fraud other than a statement concerning the debtor=s financial condition in order to procure credit; (2) a written statement respecting the debtor=s financial condition that is materially false, on which the creditor reasonably relies, made with the intent to deceive the creditor; and (3) for obligations incurred for luxury goods and cash advances aggregating more than $925 made within 70 days preceding the bankruptcy. Continue reading →

By Donald A. Hayes, Attorney at Law

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Normally an individual is interested in filing a Chapter 7 Bankruptcy in order to discharge all of their unsecured debts, i.e. credit cards, personal loans, lawsuits etc. However sometimes an individual has become delinquent in mortgage payments, car payments, or taxes and the creditor is threatening to foreclose, repossess, or levy on bank accounts. Filing a Chapter 7 case will temporarily stop the creditor from foreclosing on the mortgage or repossessing the car, but once the bankruptcy case is closed, or if relief from the automatic stay is obtained even sooner, the secured creditor will be allowed to continue with all of its collection remedies and the debtor will lose the property if the default is not cured. By filing a Chapter 13 Bankruptcy, the debtor will be granted protection from the foreclosing secured creditor and will be permitted to file a plan for individual reorganization. Continue reading →

By Attorney Donald A. Hayes

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Twenty years ago there was a work ethic in this country which held that if you made an honest living, you paid your taxes and your debts, then you would be rewarded in the end with the American dream. Most people could count on holding on to the same job until they retired. Bankruptcy was a four letter word and the thought of filing bankruptcy was a notion reserved for the deadbeats and the cheats. Continue reading →