Action Advocacy Bankruptcy Blog

BANKRUPTCY is a ‘dirty word’ by many people who do not understand the purpose of bankruptcy. It can be called ‘the poor man’s bail out’ because life is difficult and people have since the time of the Bible fallen into debt and become ‘debt slaves’. Most people do not know why America enacted the 13th […]

There was a time when student loans were treated much differently in bankruptcy than they are today. In the earlier years of federal student lending, they were generally handled like other unsecured debts. A person who filed bankruptcy and received a discharge could often eliminate student loan debt in the same way they could eliminate […]

Most people (attorneys included) believe that student loan debt is untouchable in bankruptcy. I used to think that too. But this past month, in a case here in Connecticut, I successfully helped a client discharge over $240,000 in federal student loans. No adversary proceeding. No trial. Just a signed attestation and supporting documentation. And yes, […]

You are about to read a simple how-to manual on credit improvement. This page can act as a compass to orient you in the direction towards success. I have seen too many people with negative attitudes which prevented them from either reestablishing their credit or improving their credit report, so my advice from the start […]

I am developing an outline for a paper I intend to write on the History of Bankruptcy which is really ‘Debt Cancelation- A short paper on how Western Culture has dealt with debt.” First, a ‘war story.’  A husband and wife came for a consultation about their debts. She was paying the bills and was […]

May you be born during interesting times! The above is a famous Chinese curse and it could mean that Connecticut actually does not have a homestead exemption in bankruptcy at this time. Why is this important? Chapter 7 Bankruptcy is really called a ‘liquidation’ of debts and assets! I have told clients who believe that […]

The answer to this question depends in large part on when you obtain the new debt. Generally, it is not advisable to acquire new debt after you file your Chapter 7 or Chapter 13 bankruptcy petition – but before you are formally discharged. There are practical and legal reasons for this. As a practical matter, you […]

There isn’t a minimum amount of debt you need in order to file a Chapter 7 or a Chapter 13 bankruptcy. If you owe as low as $1, you can still file for bankruptcy. There are, however, many practical reasons why you should seek other alternatives than filing bankruptcy unless your debts are too high. […]

The information in this document will help you understand whether you still have to pay your debts during the COVID-19 pandemic. The COVID-19 pandemic is devastating the country. Over 320,000 people in the United States have died due to the pandemic. A majority of workers, especially workers who can’t work from home, are suffering financially. […]

The short answer to this question is no. You generally cannot discharge your duty to pay child support even if you file bankruptcy. Child support is considered a priority non-dischargeable debt. You may be able to buy yourself some time to pay the arrears, provided you make the future child support payments on time. Bankruptcy […]

? People ask me, how can I keep my cars, home, pension and get rid of my debts, is that possible? In order to help consumers with their fresh start – and that’s what Congress has as an objective with the bankruptcy code – common sense concluded that if you take the clothes off someone’s […]

The effects that declaring bankruptcy can have on a divorce case can be complicated but its not as complicated as you would think it is. Divorces happen for many reasons; one of the reasons is when a couple can’t pay their bills. Even when they can pay their bills while living together, they quickly find […]

If you’re going through a divorce and are considering bankruptcy, these 10 important facts about bankruptcy and divorce are a must read. Spouses and parents going through a divorce and bankruptcy, often need to consult with both a bankruptcy lawyer and a family lawyer at the same time. Divorce and bankruptcy are both emotionally draining experiences. […]

One of the biggest challenges of a divorce is having to pay child support or marital alimony. If you’ve found that your payments are too high or that you cannot afford the essentials of living, it would make sense that you would consider declaring bankruptcy. Discharging Support Payments in Chapter 7 and Chapter 13 The […]

First, the 341 hearing is held within 30 days of the filing of your petition. Usually, creditors do not appear at this hearing to ask you any questions. Frankly, it can be a waste of time for the creditor. However, sometimes a disgruntled landlord will appear or in the case of a photographer who has […]

Most consumers are not thinking about making fraudulent transfers or preference payments and these terms are really technical in nature but can have a devastating effect on the filing of any bankruptcy petition. For example, let’s say that your mother, father, brother, sister, aunt, grandmother or friend gave you a personal loan of $3,000 to […]

In Chapter 7 the mortgage remains against the property. If you don’t pay on the mortgage the bank can and will bring a foreclosure action against your home. The answer to this question is as follows: ‘liens pass through bankruptcy unless acted upon’ and there’s nothing in the bankruptcy code which allows you to attack […]

Whether you quality for a Chapter 7 bankruptcy can be determined by taking the means test. If you pass the means test you are most likely able to file Chapter 7, if you don’t pass the means test, then you will be diverted into a Chapter 13 which means that you will have to repay […]

Fortunately, new foreclosure rules mandate that home loan servicers must cooperate with homeowners to seek loss mitigation options before foreclosing on your home. Why? For many Americans, a small financial hiccup can cause big trouble and a few missed mortgage payments can spell disaster. To take advantage of this forced cooperation, you must understand the […]

We have discovered through our clients that a good credit score is really and truly a representation of a fresh start. When you file for bankruptcy, your credit score is frozen at what it was just before you filed bankruptcy. Now, if you have a high credit score we have found that after filing, you […]

Is filing bankruptcy a good thing to do? Many times it is. Given below are some of the main reasons why such percent of total population find themselves in a position to declare bankruptcy even when up and running alright. The nature of having too much debt to creditors and other investors is a major […]

These days many homeowners find that their home is worth less than the amount of their mortgage. A tragedy yes, but this is largely due to the fact the most homes lost their economic value due to the 2008 recession. Because the homeowner’s judgments and liens are worth more than the value of the house, […]

When it comes to declaring bankruptcy it’s important to find out who you owe money to, even if they live out of state. For starters, if you don’t know whom you owe money to, go into a quiet room, sit down with a piece of paper and pencil, take out a calendar, and let your […]

Once upon a time many bankruptcy debtors lived in a land of golden sunshine. In that land, at that time, Chapter 7 debtors were not obligated to reaffirm a secured loan in order to keep a vehicle. The debtor’s personal liability was washed away by the Chapter 7 discharge, and only the lien against the […]

Just mentioning Section 727 of the Bankruptcy Code makes debtor attorneys cringe and bankruptcy trustees puff out their chests. This section deals with the discharge in a Chapter 7 case and is referred to when discussing a “total denial of discharge.” Very scary stuff! Section 727 is simply entitled “Discharge,” and its provisions only apply […]

Have you been ordered to pay restitution for a debt that was the result of drunk driving and want to know if the debt can be discharged in bankruptcy? The answer to your question in this regard isn’t an easy one. This article looks at some sections of the Bankruptcy Code that pose stumbling blocks […]

No reasonable person wants to go to jail, especially for failing to pay debts, like medical expenses or child support, but the fact is it can happen, and it can be avoided too. The great Victorian writer Charles Dickens wrote extensively on the grim social iniquities of his time. Meet the debtor’s prison Thankfully the […]

One of the most common economic events that will push a person into filing bankruptcy is a wage garnishment. An individual’s financial situation is often in some sort of disarray by the time he or she meets with an attorney and decides to declare bankruptcy. By then the bankruptcy case may contain a repossession, foreclosure […]

What happens to property that you’ve received 180 days before filing bankruptcy? Property that you’re entitled to receive prior to a bankruptcy filing is property of the bankruptcy estate even if the property does not actually come into your custody or control until a later date. An income tax refund is the most common example […]

Section 521 of the Bankruptcy Code requires a Chapter 7 bankruptcy debtor to file a statement of intention which is laid out as the following: “statement of his intention with respect to the retention or surrender of such property and, if applicable, specifying that such property is claimed as exempt, that the debtor intends to […]

When declaring for bankruptcy, it’s important to understand the difference between a consumer and non-consumer debt. Having this information in order will help you be prepared for what to expect at your bankruptcy hearing. The classification of a debt as a consumer or a non-consumer debt can have a significant impact on an individual’s bankruptcy […]

By taking the time to find a good bankruptcy attorney and thoroughly preparing for your initial meeting, you save yourself a lot of time and can substantially aid your attorney in spotting issues in your case and creating plan. Declaring bankruptcy starts early, even before your initial meeting with your attorney. Selecting an attorney Choosing […]

Finding out what happens after you declare bankruptcy is just as important as knowing what to expect during bankruptcy. Read the follow FAQs about what to expect after filing and how to get your credit back on track. Below are the general FAQs that we receive from many of our New London clients and if […]

Are considering declaring bankruptcy during a home foreclosure? If so, read on and get informed. When it’s time to face foreclosure Facing foreclosure is a very stressful time. Whether because of a temporary or on-going financial crisis, most homeowners work diligently to try and save their homes. Unfortunately, in many cases the mortgage holder will […]

When it comes to bankruptcy, court judges are often called upon to render decisions when the debtor can’t agree with the trustee or a creditor and this is where the appellate process comes into play. In some cases the issues are decided by a simple hearing, and in other cases by a separate lawsuit, called […]

When you declare bankruptcy, you must describe the property that you own, its location, and its value. There are many forms of ownership, including sole or individual ownership, joint ownership, joint tenancy with right of survivorship, community property, tenancy in common, title by contract, etc. Some states recognize ownership by tenants by the entirety, a […]

The biggest assets most people have is their home. The fear of losing a home is one of the things that makes bankruptcy so traumatic. Before the bankruptcy filing, there are the constant calls from creditors, attempts by creditors to get judgments or liens against the property, and for many in the past decade the […]

There are a lot of questions as to how a person can save their home after declaring bankruptcy and the following information will give you plenty of the clarification you’re looking for. Our home is generally one of our greatest assets, and a home is certainly not something you want to give up because you’re […]

Exemptions play a large part in bankruptcy and knowing what they are and how they work is important to your case. Although your attorney takes care of working out this part of your case, it’s with your help that you get the protection you need. Exemptions play a part in other legal areas but today […]

Retaining property during bankruptcy is usually a matter of calculating equity in your property and applying legal exemptions. Equity is the difference between the amount you owe on the property and its fair market value. For instance, if you own a Ford vehicle worth $10,000, and you owe Ford Motor Credit $2,000, then you have […]

Anyone going through bankruptcy would like sound advice on dealing with the sale and proceeds of property they own. Read on to find information on how to properly handle the sale of your property and help your bankruptcy case move along smoothly. Let’s start with your non-exempt equity Non-exempt equity in a Chapter 7 bankruptcy […]

When it comes to bankruptcy, many clients question whether you can get rid of a second mortgage. Well in some cases you can through lien stripping which removes the second mortgage lien on your home. Read on for more information. Section 506(a) of the Bankruptcy Code separates the debtor’s obligations into two general categories or […]

There are instances when a lien can be avoided and today we’re going to talk about NPMSI. NPMSI which stands for “Non-purchase money security interest loans” that occur when a borrower already owns property that is used as collateral for a loan. For instance, as a borrower, you may take a loan from a finance […]

How do reaffirmation agreements work and what are my options? Chapter 7 debtors, if they end up passing the means test, can discharge all of their unsecured debts. Secured assets are normally sold by the Trustee in Bankruptcy or the creditor with the security interest acquires the property. Chapter 13 is a possible option for […]

One common myth is that you can stop paying your bills after deciding to declare bankruptcy but this idea needs clarification. You see, in a Chapter 7 bankruptcy case – an erase-your-debts-and-start-fresh bankruptcy – debtors are often advised to stop making payments on unsecured debts, like credit cards and medical bills. Unsecured debts are discharged […]

Occasionally a debtor experiences a substantial and continuing change of circumstances during a Chapter 13 bankruptcy case and need to convert it to a Chapter 7. This can occur because circumstances have made it impossible to continue to make monthly payments and a conversion to a Chapter 7 is in order. Debtors with secured possessions […]

How are unemployment benefits handled after declaring bankruptcy? The short answer is that they are considered income and the long answer is more complicated if you’re receiving unemployment insurance. While having spent many years helping my Connecticut clients through personal bankruptcy, I’ve found that unemployment is one of the most common reasons for filing choosing […]

If you are going to declare bankruptcy, here is a list of thing you should do beforehand. It seems counter-intuitive for a millionaire to talk about bankruptcy, but the millionaire’s riches are a target for litigation. Bankruptcy is a powerful tool that can discharge personal liability while protecting personal assets. Most of us never consider […]

Once step in the process of bankruptcy, specifically related to chapter 7 and chapter 13, are the filing fees. Knowing these fees are important, but for chapter 7 bankruptcy, it’s important to first determine whether you actually qualify for it. You can make this determination by completing the Chapter 7 Means Test for your county […]

In addition to filing the Voluntary Petition form, Chapter 7 consumer debtors need to file the following supporting documents. Your local bankruptcy attorney will explain the time requirements, and what each document means in more detail but this is a general list of the forms you can refer to once you’ve decided to go the […]

If you pay back income taxes (federal, state or local) you may be able to discharge them in bankruptcy. Alternatively, you may be able to use bankruptcy to better manage the time you have to pay your taxes and the amount of interest that you have to pay. Income taxes can be discharged if the […]

When declaring bankruptcy, your attorney needs specific information from you which will be a part of putting your case together. A bankruptcy case starts with a financial accounting of your income, expenses, assets, and debts. If you have been neglecting your finances for a considerable time, finding the necessary documents may be difficult. However, the […]

Often when someone applies for a loan, the loan applicant gets a cosigner to sign on it too. Sometimes this is because the applicant is young and needs a parent to back the loan. Other times, the business or person giving the loan wants someone with a stronger credit record to cosign the loan. When […]

Many times married couples will have to decide if they should declare bankruptcy together, file separately or, whether only one spouse needs to file. There can be financial and practical advantages and disadvantages to all scenarios. There may also be legal pros and cons to each scenario. The Bankruptcy Court does allow a husband and […]

A common question my clients as me is what happens if you win the lottery during bankruptcy and how would it affect my chapter 7 filing? There are 3 parts to this question involving a ticket that was bought before, during or after the petition was filed. In short it depends on when you bought […]

Bankruptcy laws try to balance the rights of the debtor and those of creditors in the case. Some of these laws can seem unfair from the honest debtor’s perspective. One such section of the Bankruptcy Code permits a bankruptcy trustee (and sometimes a debtor) to force a creditor to turnover payments received from the debtor […]

Once you have decided to file for Bankruptcy, you will understand that it is no easy process. Even after reading a lot about it, you could be unsure of which type of Bankruptcy you should file. Sometimes it’s hard to decide whether you should even file at all. And by then, you will have understood […]

Can I actually buy a house after declaring bankruptcy? Can it be done? The first question to be asked is, do you really want to buy a home or are you just wishing to buy one? If you really want to purchase a home after bankruptcy, i can assure you that i have many clients […]

I want to quote from Atty Robin Miller: In a surprising decision by a court of appeals not noted for its sympathy for debtors’ positions, the Eleventh Circuit Court of Appeals, relying on circuit precedent, has held in a unanimous panel decision that a Chapter 7 debtor may strip off a lien that is wholly […]

When it comes to obtaining a parent student loan after having declared bankruptcy, there is a downside being that a bankruptcy discharge during the previous five years likely precludes the parent from obtaining a PLUS loan for the child. There is one certainty for every person who files bankruptcy: Life Goes On but the question […]

The Automatic Stay is part of the US Bankruptcy law. It provides a certain degree of comfort and protection for debtors. It is a very useful tool in a lot of ways. If you’re considering declaring bankruptcy, you should review your case with your attorney first. An automatic stay applies to both Chapter 7 and […]

Today we’re going to look at 3 giants of the American economy who declared bankruptcy. One giant started his life as a watch-maker. This watch-maker pioneered a revolution in transportation and indeed his contribution is still with us in the world every day of the week. Our second giant started life as a farm boy […]

Today we’re going to take a look at 3 celebrity bankruptcies who were very successful during their time but had to rebound from catastrophes or reversals of fortune; to go on and again achieve great success. It goes to show you that even people of immense talent have problems just like everyone else. Our 3 […]

Today our featured celebrity that declared bankruptcy is John Connolly. John Connally is certainly an Irish name. We might think of John Connolly the Irish author, who wrote about a former police office who became a detective hunting for the killers of wife and daughter. You may think of His Excellency, John Connolly the Second […]

We do indeed take on and help clients who have been sunk by gambling debts. Can gambling debts be discharged in bankruptcy? It’s a tough question but the short answer is yes. Discharging gambling debts in bankruptcy Gambling is often the tip of the iceberg for debtors. Debtors who have gambling debt usually use up their […]

Students are desperate to find a remedy for their student loan problems. It’s near impossible to obtain a discharge of a student loan in Bankruptcy Court due to the ‘Brunner Test’. Passing the ‘Brunner Test’ in order to prove a hardship is more difficult than the Marines raising the flag at Mount Suribachi during the […]

Historically bankruptcy is found in the bible, in chapter 15, in the book of Deuteronomy. Is says that at the end of every 7 year period, “you shall have relaxation of debts, which should be observed as follows:” every creditor shall relax his claim on what he has loaned his neighbor he must not press […]

Double Standards in Bankruptcy was the headline which was recently published my the New York Times as an Editorial, April, 2014. The Editorial Board pointed out that the bankruptcy of the City of Detroit in Chapter 9 exposed this double standard. The pensioners payments from the City of Detroit are guaranteed under the Michigan Constitution, yet […]

Recently The Day ran a column on the front page about student loans. The journalist, Natalie Kitroeff, wrote for the New York Times, “Aggressive action of agency that monitors student loans faces scrutiny’. In the article Natalie introduced us to Stacy Jorgensen who had pancreatic cancer and couldn’t have her student loans discharged in bankruptcy […]

The New Year is fast approaching and It’s time for a review or retrospective of the new Bankruptcy Code which was enacted in 2005. The official title to the New Code is: “Bankruptcy Abuse Prevention and Consumer Protection Act” or ‘BAPCPA’ for those who are familiar with the term. Let’s start at the beginning. This […]

Lost Appreciation in Chapter 7 bankruptcy In the United States Supreme Court case of Schwab v. Reilly, 130 S. Ct. 2652 (2010), the Court turned the bankruptcy world’s understanding of debtor exemptions on its head. The Court held that when a debtor ascribes a dollar value to property of the bankruptcy estate and claims an […]

The bankruptcy system deals with fraud by relying on the honesty of the debtor, the attorney, the trustee, creditors, the judge and bankruptcy court clerks. The federal bankruptcy laws also require full and complete financial disclosures for the system to work properly. In order to deter abuse during the bankruptcy process, Congress has described debtor […]

Before you can obtain a full discharge in Chapter 7, you must first obtain a Certificate of Credit Counseling which is completed in two phases, namely by obtaining your Certificate of Credit Counseling and your Certificate of Financial Education. Here is a list of the approved credit counseling agencies for the district of Connecticut. You […]

Read the Federal Bankruptcy Exemption Laws The following are bankruptcy exemptions (d) The following property may be exempted under subsection (b)(2) of this section: (1) The debtor’s aggregate interest, not to exceed $15,000 in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in […]

This page details and explains Connecticut Bankruptcy Exemptions laws and how they can help your specific case. Laws that protect your property from creditors Connecticut State bankruptcy exemptions laws Laws that protect your property from creditors Exemptions are laws passed by every state that allow you to protect certain types of your property from your […]

Bank of America, Citigroup, J.P. Morgan Chase, Wells Fargo—some of the nation’s largest lenders whose shady banking practices—“robo-signing,” liars loans, and so on—helped tank the housing market and send many millions into foreclosure—out of the goodness of their hearts are coming to the rescue to help beleaguered homeowners. Well, not really. These banking giants have […]

Who among us has almost $7,000 to blow on athletic shoes? Warren Sapp, a top NFL defensive tackle who patrolled the gridiron trenches for over a decade, has the dough. Or at least he had. Sapp, a seven-timer Pro Bowler for the Tampa Bay Buccaneers, and currently a football analyst for the NFL Network, is […]

Like any CT bankruptcy lawyer, attorneys, I had never handled a Chapter 12 and that’s when a farmer or fisherman files for bankruptcy. Indeed, most consumer bankruptcy really don’t know about Chapter 12. Very few can tell you what it does but I’m in Connecticut and there are very, very few Chapter 12’s.I spent many, […]

Abraham Lincoln was one of our greatest famous presidents—winning the Civil War to keep the Union together and emancipating the slaves. But—he was a terrible businessman and declared bankruptcy. Lincoln tried many occupations as a young man, including buying a general store in New Salem, Illinois, in 1832. But his sales were dismal and the […]

Why has American gone from a forest or wilderness and in 200 years to the world’s superpower? ANSWER: We have had a dynamic economic where people can start again after an economic set-back. Without bankruptcy protection most of us might still be driving horse-and-buggies—or schlepping around on bicycles—while the wealthy one percent are motoring around […]

How many other celebrities who have earned tens of millions of dollars from movies, have declared bankruptcy? The ranks are legion.Kim Bassinger, Burt Reynolds, Debbie Reynolds, MC Hammer, Meat Loaf, Latoya Jackson, Mickey Rooney, Gary Coleman, Tammy Wynette, Sherman Hemsley, Wayne Newton, Which begs the question from the 99% of us who are ordinary Joes […]

The Supremes: ‘You Keep Me Hanging On…..’ I called the US Supreme Court: The Supremes because they ‘keep me hanging on for justice’. Presently, there’s a consumer bankruptcy case before The Supremes and it’s In re Ransom. This case is very important to the little guy trying to get out of debt. Why? This case […]

Foreclosure Notice? Mortgage “Experts” to the Rescue! –But Beware of Greeks Bearing Gifts! The day you’ve been dreading: a foreclosure notice from your bank arrives in the mailbox. Your mortgage payments have been late—or not paid at all. You’re about to lose your home. Then you get a call from a “mortgage specialist,” claiming years […]

This is my letter in response to an article in The Day ‘Personal bankruptcies easing after dramatic increase in ’09’ by Lee Howard. Hi Lee Howard: I read your article regarding bankruptcy statistics. I respectfully disagree with the interpretation of the bankruptcy statistics presented. Let me first cite a little piece of bankruptcy history as […]