In federal court Minneapolis, MN Denny Hecker, a one-time mover/shaker and auto dealer empire Mogul in the twin cities was sentenced to 10 years in prison on 2/11/11 for bankruptcy fraud and conspiracy to commit wire fraud. The sentencing judge threw the book at him sentencing him to the maximum called for under the guidelines telling Hecker that he did not deserve a break and called him a scoundrel. Harsh words and a harsh sentence. Bad for Hecker no doubt but others can benefit from his experience. I'm hoping that his outcome will serve as a deterrent for anybody coming into the bankruptcy process with less than a full commitment to total disclosure and candor with the court as well as with their attorney. Lately whenever I've got someone consulting with me about a bankruptcy case and they either outright come out and ask me how to "game" the system or I get the sense that they aren't being totally candid with me I've pulled out the example of Mr. Hecker as good reason for being "honor bright" and truthful with all things in regard to their bankruptcy filing. It isn't worth it to try and hoodwink the court. You can lose your discharge as Mr. Hecker did...plus he still has to pay all the debt and he's spending the next decade in federal prison. That's not a typical result but he's an example that people can and actually do go to jail for bankruptcy fraud. It appears that he was his own worst enemy as he couldn't process the fact that he wasn't fooling anyone anymore. That failure and his continued contempt for the bankruptcy process led to the harshness of his sentence. Word to the wise...full disclosure and play by the rules. There are many benefits in bankruptcy for debtors but some stiff penalties for dishonest debtors. For my own practice...if I get the sense that someone isn't coming completely clean with me about their circumstances I give them a pass. I don't want their case and I won't be involved in it. There are too many other honest people out there who need my help.
If you've got questions about the bankruptcy process in Chapter 7 or Chapter 13 for individuals or small business we'd be glad to help. Connect with us at www.kingburylawoffice.com
Dave Kingsbury
Tuesday, February 22, 2011
Thursday, December 2, 2010
Debt buyers on a suing spree
I talk with a lot of people who presume that when a lender/bank/credit card company has informed them that the debt they owe has been "charged off" that they no longer owe the money and they, therefore, have nothing to worry about. Nothing could be further from the truth as there are collection firms that buy old debt for pennies on the dollar and hire outside counsel to collect and to sue on the debt. That practice has soared in the past 3 years as there has been a spate of bad loans and unpaid credit card accounts...which makes the debt for those accounts cheaper and cheaper to buy for those who specialize in this kind of market. It's estimated that outstanding debt on credit cards alone is in the neighborhood of $1.9 TRILLION dollars for 2007...back in the 90's it was in the neighborhood of $475 billion. Not an insubstantial figure in the 90's but an explosion of debt in most recent years. A consequence of the bad economy no doubt has lead to a plethora of loans and accounts gone bad. It's estimated that $3.2 trillion in consumer debt of all types has been written off since 9/07. For the debt buyers and debt collectors opportunity knocks! Most of the collection lawsuits are small claims or conciliation court matters where most defendants don't show and lose by default. Sometimes they aren't even aware of the lawsuit and many of the affidavits filed by the collectors aren't property verified as required by law.
The good news.......even if you've been sued and there are judgments against you is that if the debt was a debt that was dischargeable in nature in bankruptcy prior to acquiring judgment status we can still get rid of that debt for you in a bankruptcy case. There is a bit more to do after the bankruptcy case is discharged in order to remove the record of the judgment from the judgment roll in the court of record that had docketed the judgment. That's advisable because even if the debt is discharged the record of the judgment still survives and often appears on a person's credit report although the debt is now gone and truly uncollectible. Unfortunately anyone looking at your credit later will still see the judgment listed and can only assume it is left unpaid or unsatisfied. That, of course, is an impediment to acquiring new credit at reasonable rates, if at all. Most bankruptcy clients will hire us to perform the judgment removal service for them as well. Best case scenario is, of course, to come and see us before judgments are entered against you to avoid the additional expense and time involved in that process.
If you've got debt issues and think you may need to file a bankruptcy we've got answers.
David D. Kingsbury Attorney at Law-Bankruptcy Lawyer
Kingsbury Law Office
14827 Energy Way Apple Valley, MN 55124
Tel. (952) 432-4388 Fax. (952) 432-4969
www.kingsburylawoffice.com
The good news.......even if you've been sued and there are judgments against you is that if the debt was a debt that was dischargeable in nature in bankruptcy prior to acquiring judgment status we can still get rid of that debt for you in a bankruptcy case. There is a bit more to do after the bankruptcy case is discharged in order to remove the record of the judgment from the judgment roll in the court of record that had docketed the judgment. That's advisable because even if the debt is discharged the record of the judgment still survives and often appears on a person's credit report although the debt is now gone and truly uncollectible. Unfortunately anyone looking at your credit later will still see the judgment listed and can only assume it is left unpaid or unsatisfied. That, of course, is an impediment to acquiring new credit at reasonable rates, if at all. Most bankruptcy clients will hire us to perform the judgment removal service for them as well. Best case scenario is, of course, to come and see us before judgments are entered against you to avoid the additional expense and time involved in that process.
If you've got debt issues and think you may need to file a bankruptcy we've got answers.
David D. Kingsbury Attorney at Law-Bankruptcy Lawyer
Kingsbury Law Office
14827 Energy Way Apple Valley, MN 55124
Tel. (952) 432-4388 Fax. (952) 432-4969
www.kingsburylawoffice.com
Tuesday, September 28, 2010
Credit Counseling
A lot of people can benefit from credit counseling services. Hopefully you can ferret out which one is a good one from the vast array of credit counseling companies who purport they are there to help you but in reality are interested really in lining their own pockets. I found a good article on line on some questions you should ask when considering using one of these companies to help you.
http://www.foxbusiness.com/personal-finance/2010/09/28/questions-help-right-credit-counselor/?cmpid=partner_aol
Good luck and remember....if you have questions or a need for an experienced bankruptcy lawyer we are here to help.
www.kingsburylawoffice.com
http://www.foxbusiness.com/personal-finance/2010/09/28/questions-help-right-credit-counselor/?cmpid=partner_aol
Good luck and remember....if you have questions or a need for an experienced bankruptcy lawyer we are here to help.
www.kingsburylawoffice.com
Thursday, August 19, 2010
Consumer bankruptcy filings up...Again
Recent statistics reflect that consumer bankruptcy filings in the first 6 months of 2010 totaled 770,117. That is a 14 % increase over last year for the same period and as a matter of fact is the highest total since the Bankruptcy Abuse Prevention and Consumer Protection Act (so-called) was passed in 2005 in an attempt to decrease the amount of bankruptcy filings. Typical government reaction to a problem....try to put a bandaid on something to make it look good instead of making real attempts to resolve the problems that push people into bankruptcy like high unemployment, high medical costs and low rates of insurance, predatory lenders and credit card issuers, etc. Since then we've had some efforts at reigning in the mortgage companies and the credit card issuers.....hopefully it will help. Unfortunately the housing market collapse and the attendant high unemployment are factors that will be around and impacting the American economy for some time to come.
For information on consumer and small business bankruptcy in Minnesota please connect with us at www.kingsburylawoffice.com
For information on consumer and small business bankruptcy in Minnesota please connect with us at www.kingsburylawoffice.com
Thursday, July 22, 2010
Debt settlement vs Bankruptcy
I must have some spare time on my hands....been reading a few articles in various newspapers. A timely issue is that of debt settlement companies and are they really providing a bonafide benefit/service for a reasonable fee. Frankly....not so much. Let's face it...the economy is in the tank...people are in financial turmoil/stress...perfect environment for the vultures to come out to take advantage.
The debt settlement industry has gotten HUGE....everywhere you turn in print, TV, internet, radio....you name it...someone is hawking a debt settlement or debt "management" program. I actually had a guy connect with me a couple of months ago...personal referral from a lawyer I've done business with. He sent me an email saying that I could make "Tens of thousands of dollars a month for only an hour a day of my time"----I sent him an email back saying it sounded a hell of a lot like a late night television infomercial for flipping houses with a real estate scheme used to before the housing market blew up. He apparently was insulted....cried foul to the guy that referred him to me and that lawyer says he won't refer me bankruptcy cases anymore. Tell you what...if the price of doing business with that guy is acting in concert with his "buddy" to defraud and victimize people like my clients I don't want anything to do with him anyway. My sense was he was going to get a piece of whatever potential business was generated by the referral and he didn't like the fact that I turned his pal down.
Back the the article. Says the the Better Business Bureau of Minnesota and North Dakota is warning people about misleading debt settlement companies that claim to have a program that can easily either eliminate or reduce credit card debt. Since the recession started...which would be what...late 07' I guess...over 3,500 hundred complaints. 3,500...that's a big number and that is just in 2 states. Plus quite a number of state's attorney generals offices (including Minnesota's) have gone after numerous places like Credit Solutions, Debt Rx USA, Financial Freedom of America, Debt Settlement America, Clear Your Debt and Swift Rock Financial Solutions (never heard of that last one).
Most complaints to the Better Business Bureau allege that instead of having the debt settled as promised the debtors were often sued by their creditors and driven deeper in debt all the while thinking that whatever company they had hired where going to be "fixing" everything for them. Some of them ended up having their wages garnished.... WHILE they were in a program of debt settlement.
First off....it is never an easy or a quick process that comes without any pain. Don't care how they advertise it...it just ain't so. Plus...there is the significant impact on the debtor's credit score. The creditors don't always stop reporting late payments/missed payments to the credit bureaus...hardly...I think they usually do...debt management program or not. Plus, one thing that I've notice in my practice. They never tell people that if they settle a debt for less than what was owed that the debtor will be issued a 1099 at the end of the year. So guess what? It is an income earning event as far as the IRS is concerned and you have to pay taxes on that "income" at your regular tax rate. Why do they rarely tell people about this? Because 99% of the people looking into it would decide there is a small benefit to be had if they also have to pay taxes on any forgiven debt. Conveniently not part of the conversation I guess.
Frankly....I'm a bankruptcy attorney. If you've been reading my posts you know this already. Do I have any faith in debt management/settlement programs. Not much really. I read an article a number of years ago. The IRS had investigated something over 40 of these companies and decided to revoke the non-profit status of a number of them. How many? If you guessed ALL OF THEM---you'd be correct. Interesting eh? I think that sums it up right there. Considering the hit you take on your credit, the exposure to lawsuits, wage garnishments and bank account levy's (levys they can do w/o warning by the way...nothing like getting a notice from your bank telling you that a creditor cleaned out your account and now your checks are bouncing all over town) I'd suggest that bankruptcy....once you've gotten to that point makes a hell of a lot more sense. It's faster. It's cheaper. It protects you from lawsuits, levys and garnishments and discharges the debt giving you the relief you need to get a "fresh start" envisioned by the bankruptcy code and lets you move on with your life and start rebuilding your credit not weighted down by all that old debt. Honestly...by the time people come to me it is one of two things. Either their credit is bad...or it's real good but it's going to be really bad real soon. So---the things that have an adverse effect on your credit have already been set in motion long ago. I mention all of this because people often ask me how badly a bankruptcy filing is going to "hurt" their credit. Honestly it generally helps a heck of a lot more than it hurts. It's not the black kiss of death and it doesn't mean you'll never get credit again. It is scored as another event of your credit report and given a certain "weight"....just like a missed payment or something would be treated similarly. The real "penalty" for filing is that the cost of money goes up...probably for a year or two. Which means you'll pay higher interest for awhile. Most people...or a lot of them anyway are in that boat when they come to see me regardless. The difference is that the bankruptcy filing is a watershed event. Once it is filed you're no longer taking steps backward...you're actually going forward. Lots of variables work into a credit score. Longevity and stability of employment, income levels, current debt loads, regular payments, etc. Over the course of time the credit score generally goes up and as more time passes the bankruptcy filing itself isn't such a significant item....creditors you are wooing to give you a loan are more interested in how you are doing now, what kind of debt load you're carrying relative to your income and whether or not you've got some disposable income available to service new debt.
If you've got questions about bankruptcy we've got answers. Give me a call at 9952) 432-4388 or visit us at http://www.kingsburylawoffice.com/.
Dave Kingsbury
Bankruptcy Lawyer/Attorney
The debt settlement industry has gotten HUGE....everywhere you turn in print, TV, internet, radio....you name it...someone is hawking a debt settlement or debt "management" program. I actually had a guy connect with me a couple of months ago...personal referral from a lawyer I've done business with. He sent me an email saying that I could make "Tens of thousands of dollars a month for only an hour a day of my time"----I sent him an email back saying it sounded a hell of a lot like a late night television infomercial for flipping houses with a real estate scheme used to before the housing market blew up. He apparently was insulted....cried foul to the guy that referred him to me and that lawyer says he won't refer me bankruptcy cases anymore. Tell you what...if the price of doing business with that guy is acting in concert with his "buddy" to defraud and victimize people like my clients I don't want anything to do with him anyway. My sense was he was going to get a piece of whatever potential business was generated by the referral and he didn't like the fact that I turned his pal down.
Back the the article. Says the the Better Business Bureau of Minnesota and North Dakota is warning people about misleading debt settlement companies that claim to have a program that can easily either eliminate or reduce credit card debt. Since the recession started...which would be what...late 07' I guess...over 3,500 hundred complaints. 3,500...that's a big number and that is just in 2 states. Plus quite a number of state's attorney generals offices (including Minnesota's) have gone after numerous places like Credit Solutions, Debt Rx USA, Financial Freedom of America, Debt Settlement America, Clear Your Debt and Swift Rock Financial Solutions (never heard of that last one).
Most complaints to the Better Business Bureau allege that instead of having the debt settled as promised the debtors were often sued by their creditors and driven deeper in debt all the while thinking that whatever company they had hired where going to be "fixing" everything for them. Some of them ended up having their wages garnished.... WHILE they were in a program of debt settlement.
First off....it is never an easy or a quick process that comes without any pain. Don't care how they advertise it...it just ain't so. Plus...there is the significant impact on the debtor's credit score. The creditors don't always stop reporting late payments/missed payments to the credit bureaus...hardly...I think they usually do...debt management program or not. Plus, one thing that I've notice in my practice. They never tell people that if they settle a debt for less than what was owed that the debtor will be issued a 1099 at the end of the year. So guess what? It is an income earning event as far as the IRS is concerned and you have to pay taxes on that "income" at your regular tax rate. Why do they rarely tell people about this? Because 99% of the people looking into it would decide there is a small benefit to be had if they also have to pay taxes on any forgiven debt. Conveniently not part of the conversation I guess.
Frankly....I'm a bankruptcy attorney. If you've been reading my posts you know this already. Do I have any faith in debt management/settlement programs. Not much really. I read an article a number of years ago. The IRS had investigated something over 40 of these companies and decided to revoke the non-profit status of a number of them. How many? If you guessed ALL OF THEM---you'd be correct. Interesting eh? I think that sums it up right there. Considering the hit you take on your credit, the exposure to lawsuits, wage garnishments and bank account levy's (levys they can do w/o warning by the way...nothing like getting a notice from your bank telling you that a creditor cleaned out your account and now your checks are bouncing all over town) I'd suggest that bankruptcy....once you've gotten to that point makes a hell of a lot more sense. It's faster. It's cheaper. It protects you from lawsuits, levys and garnishments and discharges the debt giving you the relief you need to get a "fresh start" envisioned by the bankruptcy code and lets you move on with your life and start rebuilding your credit not weighted down by all that old debt. Honestly...by the time people come to me it is one of two things. Either their credit is bad...or it's real good but it's going to be really bad real soon. So---the things that have an adverse effect on your credit have already been set in motion long ago. I mention all of this because people often ask me how badly a bankruptcy filing is going to "hurt" their credit. Honestly it generally helps a heck of a lot more than it hurts. It's not the black kiss of death and it doesn't mean you'll never get credit again. It is scored as another event of your credit report and given a certain "weight"....just like a missed payment or something would be treated similarly. The real "penalty" for filing is that the cost of money goes up...probably for a year or two. Which means you'll pay higher interest for awhile. Most people...or a lot of them anyway are in that boat when they come to see me regardless. The difference is that the bankruptcy filing is a watershed event. Once it is filed you're no longer taking steps backward...you're actually going forward. Lots of variables work into a credit score. Longevity and stability of employment, income levels, current debt loads, regular payments, etc. Over the course of time the credit score generally goes up and as more time passes the bankruptcy filing itself isn't such a significant item....creditors you are wooing to give you a loan are more interested in how you are doing now, what kind of debt load you're carrying relative to your income and whether or not you've got some disposable income available to service new debt.
If you've got questions about bankruptcy we've got answers. Give me a call at 9952) 432-4388 or visit us at http://www.kingsburylawoffice.com/.
Dave Kingsbury
Bankruptcy Lawyer/Attorney
Wednesday, July 21, 2010
Credit card debt--the true cost of paying the minimum
I was reading an article in the Dallas Morning News last week while there on a seminar for Chapter 13 Bankruptcy Trustees. It was sobering. Many personal stories of people trapped in a cycle of debt they are having a hard time escaping. One of the many points of the story was regarding how long it really takes you to get out of debt by just paying the minimum balance. Hypothetical situation was $10,000 in debt presuming a 14% interest rate (national average...many of my client's cards are much higher). Payment was set at interest due plus 1% of the balance to determine the minimum payment which apparently is standard as well. At that rate it takes 27 YEARS AND 9 MONTHS to pay off the $10K balance. That is phenomenal. The total payout is $21,166.00 which is more than 2x's the initial balance. Friends....obviously this is a good deal only for the bank. Do what you can to lower your interest rates and pay off your cards pronto!
If you've done what you can and still can't make it work consider bankruptcy as a viable option. A chapter 7 bankruptcy case can discharge or wipe out unsecured debt like this and if not available to you due to high income, too many non exempt assets, etc., a chapter 13 bankruptcy case will pay off all or part of the debt over a maximum 60 month period. A plan can often provide for payment of just pennies on the dollar for this kind of debt. Even if it was a full repayment plan due to the income available the interest stops dead as of the date of filing for credit card and other unsecured debt. There is hope and a way to manage all of this.
If you've got questions about bankruptcy we've got answers. Call us at 9952) 432-4388 or visit us on the web at http://www.kingsburylawoffice.com/.
Dave Kingsbury
Bankruptcy Attorney
If you've done what you can and still can't make it work consider bankruptcy as a viable option. A chapter 7 bankruptcy case can discharge or wipe out unsecured debt like this and if not available to you due to high income, too many non exempt assets, etc., a chapter 13 bankruptcy case will pay off all or part of the debt over a maximum 60 month period. A plan can often provide for payment of just pennies on the dollar for this kind of debt. Even if it was a full repayment plan due to the income available the interest stops dead as of the date of filing for credit card and other unsecured debt. There is hope and a way to manage all of this.
If you've got questions about bankruptcy we've got answers. Call us at 9952) 432-4388 or visit us on the web at http://www.kingsburylawoffice.com/.
Dave Kingsbury
Bankruptcy Attorney
A penny saved may cost you a bundle! Bargain basement bankruptcy attorneys means poor results.
I was in court earlier this week. Witnessed a hearing where an inexperienced attorney was representing a chapter 7 client. First the trustee admonished the attorney for using the property tax id number instead of the legal description of the property as the documents call for. Had not the trustee brought this to his attention (he didn't have to) the net result of that would have been an issue clearing title to the property in a subsequent refinance or sale. Some lawyer would have had to bring a motion to re-open the bankruptcy case in order to properly amend the schedules to reflect the correct legal description so the Schedule C could then be filed against the property records. That cost of the motion and the subsequent amendment alone would have cost probably $1,500.00.
Besides that it appeared that the client was a realtor. New attorney didn't know enough to ask him about potential commissions from listings the client may have had at the time his chapter 7 case was filed. Sounds like he cost his client $5,000.00 for the value of the commission that could have been avoided had he known enough to ask about it and some pre-bankruptcy planning been implemented.
Long story short....maybe the client saved a few hundred bucks hiring this kid. Turned out it cost him thousands and could have cost him even more had not the trustee been gracious enough to clue him in on the legal description problems. Do you REALLY want to hire an attorney with little or no experience....even if they say they are highly rated (easy to get your friends and relatives with a computer to do ratings for you). Think about it. What you pay for an experienced attorney who charges reasonable fees commensurate with their experience is an investment in your bankruptcy case and your future. Look for the bargain basement attorneys and as the Chinese say....."be careful what you wish for"...........you'll get bargain basement results.
For help from experienced counsel in all manner of chapter 7 and chapter 13 bankruptcy issues please call my office at (952) 432-4388 and/or visit our website at www.kingburylawoffice.com.
Besides that it appeared that the client was a realtor. New attorney didn't know enough to ask him about potential commissions from listings the client may have had at the time his chapter 7 case was filed. Sounds like he cost his client $5,000.00 for the value of the commission that could have been avoided had he known enough to ask about it and some pre-bankruptcy planning been implemented.
Long story short....maybe the client saved a few hundred bucks hiring this kid. Turned out it cost him thousands and could have cost him even more had not the trustee been gracious enough to clue him in on the legal description problems. Do you REALLY want to hire an attorney with little or no experience....even if they say they are highly rated (easy to get your friends and relatives with a computer to do ratings for you). Think about it. What you pay for an experienced attorney who charges reasonable fees commensurate with their experience is an investment in your bankruptcy case and your future. Look for the bargain basement attorneys and as the Chinese say....."be careful what you wish for"...........you'll get bargain basement results.
For help from experienced counsel in all manner of chapter 7 and chapter 13 bankruptcy issues please call my office at (952) 432-4388 and/or visit our website at www.kingburylawoffice.com.
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