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What do you do if you can’t pay your bills while injured?

Accidents do happen, sometimes they occur on a jobsite, and you can make a claim for workers compensation.  Sometimes, an injury can occur as a result of a slip and fall or car accident and an insurance company may eventually pay for your time away from work; Sometimes, you may even be hurt for so long that you can not work any longer and may have a right to open a social security disability claim.  However, in all of these situations, the issue many injury victims face is that at least for a short time, if not for many years, you may be out of work, not earning a pay check and unable to pay your mortgage, credit card bills or even basic living expenses.

If you are hurt and can’t pay your bills, what rights do you have?   There are many rights consumers have.  However, let’s talk about the possible solutions to your debt problem.  If you are being harassed by debt collectors and you do not wish them to call you any longer or send you harassing letters, all you need to do is inform them the next time they call that they can not contact you any more, pursuant to the fair debt collections practices act.

In addition there are specific state laws, such as those in Massachusetts (M.G.L. c 93 § 49) which make it unlawful to engage in certain debt collection practices that are considered unfair, deceptive or unreasonable.  The following types of collection attempts would be considered unfair, deceptive or unreasonable:

  1. A person trying to collect a debt informs you verbally or in writing they will communicate or discusses an alleged debt to someone else other than you, in order to persuade you to pay them.
  2. A person trying to collect a debt communicates directly with you after notification from an attorney representing you that all further communications relative to the debt should be addressed to the lawyer.
  3. A person trying to collect a debt communicates with you in such a manner as to harass or embarrass you, including, but not limited to communication at an unreasonable hour, with unreasonable frequency, by threats of violence, by use of offensive language, or by threats of any action which the creditor in the usual course of business does not in fact take.
  4. The creditor communicates with alleged debtors through the use of forms or instruments that simulate the form and appearance of a court.

It is also deemed unlawful under Massachusetts law and a violation of the debt collection laws for a Creditor to threatening that nonpayment of a debt will result in:

  1. You will be arrested if you do not pay the bill
  2. Suggesting that they can garnish your wages or attach any property without informing you that a court hearing will be required first and a Judge will have to rule on the matter.
  3. Using profane or obscene language in an attempt to intimidate you to pay a debt.

The bottom line is this, don’t let debt collectors push you around, you have rights as a consumer, and debt collections companies may not want to admit it, but they know it too.

This article on consumer rights fair debt practices was written by Attorney Michael Goldstein, a consumer debt advocate and bankruptcy attorney.

Advantages of Filing Personal Bankruptcy as a Debt Elimination Tool

Filing bankruptcy is a traumatic experience for  any individual as of its long impact on an individual’ financial life. Therefore, before filing for bankruptcy, it is wise for anybody to carefully reconsider his options such as debt settlement and debt consolidation programs to shed off debt. However, there are several advantages of filing for bankruptcy too as bankruptcy filing:

1) Discharges all your legitimate debts

2) Gives you a fresh financial start

3) Automatic ceases all collection calls and protects you

4) Preserves your exempted property

Discharges All your Legitimate  Debts

The primary reason that people file for bankruptcy  is to discharge all their legitimate unsecured debts. The bankruptcy court discharges a debtor’ debts under federal bankruptcy laws and lifts the debt burden from the debtor’ shoulders. If a debtor successfully files Chapter 7  bankruptcy, he needs not to repay his unpaid balances or his assets are never sold to satisfy the due payments as those are deemed as fulfilled.

Gives You a Fresh Financial  Start

Bankruptcy filing always protects a debtor, the most  significant of which is a fresh financial start and relief from repeated and harassing collection calls from the creditors. Once a debtor files for bankruptcy, all collection efforts immediately stop by the virtue of the automatic stay.

The aim of this statutory pardon is to help the debtor so that he may again stand financially straight and can repay his debts in a systematic way.

Automatic Stay Protection-

Once a debtor files for bankruptcy, the debtor immediately gets the benefits of an automatic stay. An automatic stay immediately puts an end to all collection attempts and prevents creditors to claim debtor’ assets.

Preservation of Exempted Property

Once a debtor files for bankruptcy, the debtor’ property goes beyond the grip of the creditor. In general, automobiles, clothing, household goods, life insurance, pets, and some segment of the earned wages are counted as exempted property.

Usually, state laws determine the types of exempted property in a bankruptcy procedure. However, in some places, the federal bankruptcy laws administer exemptions.

Can you collect accounts receivable after the Trustee abandons the asset?

Money from http://flic.kr/p/4KXNhCOne of the pressing questions that many business owners have while facing the prospect of closing their doors and ceasing business operation is how to satisfy their debts.  In most cases, businesses fail due to a very limited set of factors.  I have found that the most significant factor after the lack of business sales is the inability to collect accounts receivable from services or products already sold.

In many cases, part of the decision to cease operations also involves filing a Chapter 7 corporate bankruptcy.  When a business files a Chapter 7 bankruptcy case, there are certain requirements incumbent upon the business, such as listing all of the company’s assets as well as liabilities.  The main reason for listing of the assets, other then to disclose to all creditors what the business holds, is that the  Trustee of the bankruptcy estate has the right to take possession of assets and liquidate them in order to pay off the businesses’ creditors to the extent funds are available.  However,  in some  situations, the Trustee will decide that it is not worthwhile to liquidate assets.  The Trustee may decide that it will cost more money to liquidate then he or she may generate.  The Trustee may also decide that chasing after bad debts is simply going to take too much time and not result in positive cash flow that he or she can use to pay off the creditors.

In order for the bankruptcy case to be complete, the Trustee must file a final report with the court, either stating he or she has liquidated assets, or that he or she is abandoning the assets and has neither received any property nor paid any money on account of this estate.   Section 544(a) of the Bankruptcy Code allows the trustee to abandon any property of the estate that is burdensome to the estate or is of inconsequential value and benefit to the estate.  As I said before, sometimes a Trustee simply abandons his or her right to property.

So what happens if the Trustee makes the decision not to go after old accounts receivable and in fact abandons those particular assets?  Your company has ceased operations and the bankruptcy has effectively closed the business forever.  Yet there are companies or individuals out there, who still owe money to products or services received.  Who now has the right to try and collect those debts?  What can happen now is that the business owners do have the right to try and collect.

The follow up question though, which occurs more then you might think is when a business files a Chapter 7, often the business owners also file their own personal bankruptcy case with it.  So what now happens if you can collect on some corporate debt which becomes a personal asset?  The analysis to this question is the same as what if I file bankruptcy and then win the lottery.  Personally, you have an obligation to inform the court of your win fall, if this occurs with in 180 days of filing of a personal bankruptcy petition pursuant to Section 541 of Title XI.  So the bottom line is you still may loose some of the collection, if you receive funds with in 180 days of the owner filing for personal bankruptcy, but you may also keep it, depending on the specifics of the owner’s personal finances.

Bankruptcy Is NOT a Dirty Word?

In my last Blog we discussed the fundamentals of Bankruptcy and its basic history. Unfortunately, in recent years many debt consultation companies, loan modification companies and real estate and mortgage brokers have attempted to mislead the public into thinking that bankruptcy is a dirty word and can end your credit life. The truth is bankruptcy is actually the best course of action when you are struggling with debt.

I am not going to sugar coat bankruptcy because if you are in debt no matter if it is credit card or mortgage issues; it is not a great place to be in. However, bankruptcy law is the Federal sponsored and regulated course of action to help consumers get out of their debt and start their lives again. Unlike bankruptcy, debt consultation companies, loan modification companies and real estate and mortgage brokers are not sponsored or regulated by the Federal Government.

Bankruptcy law is as old as our country. If it was such a terrible thing to do, the Federal Government would certainly have removed it from the laws and not sponsored it. So, the dirty word is not bankruptcy rather all the other marketing schemes to get you to spend more money are the dirty part of consumer debt business. I would suggest you go right to source to fix your debt with a bankruptcy counsel rather than waste both time and money with companies that are not sponsored by the Federal Government.

What is Bankruptcy

In my ten plus years of practicing as a consumer advocate, I’ve heard a lot of confusion around what exactly bankruptcy is. Bankruptcy is defined by Black’s Dictionary as “a federal system of statutes and courts which permits persons and businesses which are insolvent (debtors) or (in some cases) face potential insolvency, to place his/her/its financial affairs under the control of the bankruptcy court.” See Black’s Law Dictionary. What do all those fancy words mean for you?

In a nut shell, it means that people or companies that are struggling with debt can seek protection from their creditors through the bankruptcy court. This is not a new concept in American History; rather bankruptcy law existed from the beginning of this country. It was so important to our Founding Fathers that they gave congress the power to create bankruptcy courts and rules in Article III of the Constitution. Not, Article Ten or Twenty but as early as three in the Constitution.

Why did our Founding Fathers do that? Well, the reality is that America was designed to allow people to be free to make mistakes without facing Debtors or prison and ruining their entire life over Debt issues. Bankruptcy is a process that provides consumers an option to seek protection from the Federal Government, from their creditors and not to be harmed for the rest of their lives due to the Debt mistake they made.

Bankruptcy is a tool provided to the citizens of the United States to help those who have unfortunately gotten into some debt that they cannot handle.

Celebrities who have filed Bankruptcy Cases

Everyone wants to know about celebrities, what there doing, how they did it, who they did it too, etc. Well one thing that many people do not realize is how many of today’s celebrities and those of the past have used the United States Bankruptcy Code to their benefit.

When contemplating filing for protection under the bankruptcy code, you should realize that you are not alone. It is not an judgment on your financial responsibility, but rather, it is a form of debt relief that not only you, but many people, including some of the most influential and famous business people in the history of our great nation have used to rebuild their financial future.

In 1994, 2004, and 2009, Donald Trump was in danger of loosing his New Jersey casino projects, where he would have been fired, but for his multiple bankruptcy filings. Those filings may have saved a great deal of the Jersey Shore tourism, long before Snookie and Paulie D started fist pumping their way into our culture.

It should be noted that if Henry Ford did not file bankruptcy, the world may not have known many great accomplishments, including the model T Ford, as this financial mogul was involved in multiple bankruptcy filings.

Countless children may not have known the joy of Mickey Mouse, Space Mountain and Hanna Montana, but for Walt Disney’s foray into the bankruptcy court.

One of the 1980’s biggest movie stars, Burt Reynolds filed for a Chapter 11 bankruptcy, owing over $10 million in debt after several of his movies left the audience entertainment value bankrupt.

Consider that several of the most intelligent people in our history such as Samuel Clemens (“Mark Twain”) and Thomas Jefferson filed bankruptcy in order to obtain the debt relief they needed to move forward with their careers.

Anyone who grew up in the 1990’s as I did will remember M.C. Harmer. However, what many people don’t remember is how he had to tell the Bankruptcy Trustee, “you can’t touch this” when exempting his assets on Schedule C.

The thing that I would like all consumers to take away from this blog is the facts that no mater who you are, and how successful you may have been or plan to be in the future, you can always have a slight hick-up in your finances and there are tools available in the law to help you reorganize and get back on your feet. If you find yourself in the position that Donald Trump, Walt Disney or even more recently, Eva Longoria was in, speak to a bankruptcy attorney in your area and see what options are available for you.