Point of No Return

By Donald A. Hayes, Attorney at Law


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

Don’t Feel Guilty About Filing Bankruptcy?

By Donald A. Hayes, Attorney at Law



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

Discharging Personal Taxes in Bankruptcy

By Donald A. Hayes, Attorney at Law



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

Dischargeability and Credit Cards

By Donald A. Hayes, Attorney at Law




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

Chapter 13 Bankruptcy – A Lender of Last Resort

By Donald A. Hayes, Attorney at Law


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

Bankruptcy is Not a Four Letter Word

By Attorney Donald A. Hayes



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

Timing is Everything When Divorce and Bankruptcy are Concerned

By Donald A. Hayes, Attorney at Law

The question is often asked, should I file my bankruptcy before I get divorced or should I get divorced before I file bankruptcy. Frequently people find themselves contemplating filing bankruptcy while they are at the same time embroiled in divorce litigation. This is caused because of the financial drain that goes with maintaining two separate households, while at the same time having much less income than was previously available before the marital break up. Also, there are lawyers bills for each side as well as child and/or spousal support to be paid, not to mention the pile of credit card and other debt which was accumulated during the marriage. Continue reading

Special Rules for Dischargeablility of Debts Created in Marital Settlement Agreements and in Divorce Judgments

By Donald A. Hayes, Attorney at Law

Until recently, debts incident to marriage dissolution and based upon a division of marital property could be discharegable in the debtor spouses Chapter 7 Bankruptcy. For example, Husband takes the former family residence with an equity value of $50,000 and is ordered to pay Wife $25,000 in the divorce judgment, Aas and for an equalization of community property and debts@. Now after the deed is conveyed to Husband and Wife no longer has title to the property, Husband files a Chapter 7 Bankruptcy seeking to discharge the $25,000 debt to Wife. Continue reading

Breach of Martial Fiduciary Dutites and Their Consequences

By Donald A. Hayes, Esq. Attorney at Law


In California each spouse owes a statutory fiduciary duty in transactions between themselves and in the management and control of the community property. That duty is codified in Family Code §721 and §1101. A fiduciary duty is a duty arising to the level of the highest good faith and fair dealing imposed upon those occupying confidential relations. The fiduciary duty is not unlike the duty imposed upon non-marital business partners, investment advisers, attorneys, accountants, and other professional relationships. Continue reading