Every so often, one of my divorced clients has an ex-spouse who has filed for personal bankruptcy.  One of the matters they are concerned about is whether or not their ex-spouse’s bankruptcy case will eliminate obligations that were decreed in a divorce order.

The Bankruptcy Code, as it stands now, does not allow for the discharge of most divorce or domestic relations type of debt.  In particular, Bankruptcy Code Section 523(a)(5) declares that a “domestic support obligation” is non-dischargeable. According to Bankruptcy Code Section 523(a)(15), any debt to your former spouse or your child that you have incurred during a divorce or separation or connected to your separation agreement, divorce decree, or any other order of a court is non-dischargeable.

Generally, bankruptcy judges avoid getting involved in child support, alimony or property division disputes. In most cases, a bankruptcy debtor cannot eliminate this type of debt via bankruptcy.

There are some instances, however, that are not so straightforward. For example, if you and your spouse have accrued joint credit card debt and your ex-spouse files bankruptcy, you may receive a letter from the credit card company demanding payment on the outstanding balance. If the credit card debt was not mentioned in your divorce settlement, you could have a problem.

Also be aware that there have been cases in which a Chapter 13 bankruptcy is used to address delinquent child support by including the payment of back child support over time in the payment plan.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, and have any questions, please contact me.  

Kevin D. Heupel, Colorado Bankruptcy lawyer, 303-955-7570, COBankruptcyHelpEmail, free-consultation form

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A denial of discharge refers to your entire bankruptcy case. If you receive a denial of discharge this denotes that none of your debts will be discharged.  There are a variety of causes for a denial of discharge. Refer to this section of the US CODE:Title 11 for more information.

A particular debt is considered nondischargeable under the Bankruptcy Code for various reasons. Your remaining debts will still be discharged. Remember, if one of your debts is nondischargeable you are still required to pay that specific creditor. Refer to this section of the US CODE:Title 11 for more information.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, and have any questions, please contact me.  

Kevin D. Heupel, Colorado Bankruptcy attorney, 303-955-7570, ColoradoBankruptcyHelp Email, free-consultation form

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What is a reaffirmation agreement? A reaffirmation agreement is a mutual understanding between you and your creditor in which you become legally obligated to pay all, or some part, of what would usually be a dischargeable debt. A reaffirmation agreement should be filed within forty-five days following the first date that is set for the meeting of creditors. If you sign a reaffirmation agreement, you have sixty days after it is filed, or until the discharge date, whichever occurs later, to change your mind and inform your creditor that the agreement has been revoked. If you enter into a reaffirmation agreement without an attorney you will need to attend a hearing before a judge to determine if it will be valid. In as much as a reaffirmation agreement takes away some of the effectiveness of your discharge, you are strongly advised to consult a lawyer before agreeing to a reaffirmation of any of your debts.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, and have any questions regarding these issues, please contact me. Kevin D. Heupel, Colorado Bankruptcy Attorney, 303-955- 7570, ColoradoBankruptcyHelp Email, free-consultation form

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I will be on Colorado & Company tomorrow. The program can be seen on Channel 9 at 10 a.m. Please join me there.

Kevin D. Heupel,Colorado Bankruptcy Attorney,303-955-7570,ColoradoBankruptcyHelp Email, free-consultation form

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This morning I came across an interesting list on the Federal Bureau of Investigation website. It is essential that those of you preparing to file bankruptcy know the consequences of withholding significant information from your bankruptcy attorney and therefore the bankruptcy court. Here is an amended version of the FBI list. Please keep it in mind as you gather data for your bankruptcy case.

1. All creditors must be listed, even ones you intend to pay after filing.

2. Many assets are protected from being seized by the bankruptcy court, but only if listed. It is a crime not to list all property.

3. Part, or all, of any tax refund due for the tax year a bankruptcy case is filed may be required to be turned over to a bankruptcy trustee. Any refunds due for previous years may also be required to be turned over.

4. If you are self-employed you must list all personal and business debts, assets and income.

5. All income must be reported, including Social Security benefits, family support, alimony, unemployment, and pensions.

6. Intentionally incurring debts with the intent not to pay may be a crime.

7. You should maintain payments on all secured property you wish to keep that could be repossessed before filing. This includes house payments, car payments, furniture payments, equipment, and other items used as collateral.

8. The court may disallow a bankruptcy if you misrepresent any facts on the papers filed in bankruptcy court.

9. Bankruptcy stops all bill collectors. Creditors, including tax collectors, are barred from attempting to collect any debt from you the instant the petition is filed. This protection is permanent for all discharged debts. Bankruptcy does not stop any criminal proceeding or government regulatory proceeding.

10. Bankruptcy does not clear up a credit report. A bankruptcy may be reported on credit reports for 10 years.

11. You cannot dismiss a Chapter 7 case without court approval. You can voluntarily dismiss a Chapter 13 case anytime.

12. A secured creditor may add the attorney fees they incurred to the balance owed on the property. This may happen even if you are not behind on payments at the time of filing. Most mortgages and other loan documents allow for reasonable attorney fees and they will be added to the balance due on a loan.

13. Bankruptcy crimes carry a punishment by, among other things, up to 5 years imprisonment.

If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, and have any questions regarding these issues, please contact me.   Kevin D. Heupel,         Colorado Bankruptcy attorney,       303-955-7570,      Colorado Bankruptcy Help Email, personal bankruptcy free-consultation form

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On Wednesday the House passed the Expedited CARD Reform for Consumers Act. This will move up the effective date for almost all of the credit card reforms to the date the bill is signed into law. The bill was passed by a vote of 331 to 92.

The Speaker of the House Nancy Pelosi issued the following statement regarding the passing of the bill:

“Today, the House voted overwhelmingly to send a strong and clear message to credit card companies: we will hold you accountable for your anti-consumer practices.

“The Expedited CARD Reform for Consumers Act speeds up the effective date of a law passed in May known as the Credit CARD Act that provides for commonsense reforms and for strong consumer protections.

“Congress in good faith provided credit card companies ample time to implement these consumer reforms. But these companies responded by raising interest rates, imposing excessive fees, and tightening credit on consumers before the reforms could even take effect.

“The credit card companies proved that treating their customers fairly takes a back seat to the blind pursuit of profit. This is why the House, with an overwhelming bipartisan vote, acted to protect consumers against abusive and predatory credit card practices that don’t belong in a fair, transparent, and responsible consumer financial marketplace.”

Kevin D. Heupel, Colorado Bankruptcy attorney, 303-955-7570, Colorado Bankruptcy Help Email, personal bankruptcy free-consultation form.

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Hibah Yousuf staff reporter of CNNMoney stated yesterday that personal bankruptcies have increased nine percent. The total number of bankruptcies for 2009 will be in excess of one point four million. This will be the highest annual number of personal bankruptcies in four years and an increase of thirty percent from last year. The American Bankruptcy Institute  reported that there were 135,914 personal bankruptcy cases filed last month. Nearly one third were Chapter 13 bankruptcy cases, in which consumers are put on a repayment plan.

According to ABI executive director Samuel Gerdano, “The nearly 9% increase in consumer bankruptcy filings in October, together with a 7% jump reported in business cases, demonstrates the sustained stress on the U.S. economy.”

 Maureen Thompson, legislative director for the National Association of Consumer Bankruptcy Attorneys in Washington said, “People are still carrying a lot of debt in terms of credit cards and home equity loans, and unemployment is still rising. All of those factors are hitting consumers at the exact same time.”  She went on to explain that while some Americans tap into their savings and retirement funds in order to survive, many families are struggling after being unemployed for longer than expected. Add to that a decrease in the value of their homes, rising interest rates and reducing credit lines, they are being forced to declare bankruptcy.

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In a prior blog I discussed how to obtain your credit record. Today I would like to help you understand what a credit score is and how it affects your credit. Creditors use credit scoring to help determine whether they should give you credit and how much to charge for it.

The following information is gathered from your credit report:

• a list of all of your accounts with an indication of what type they are
• a record of any of your late payments
• a record of any collection actions against you
• a record of your outstanding debt
• the age of each of your accounts
• your history of bill payment

Your creditors then use a statistical formula to compare this information to the credit performance of other consumers with a similar profile. They use a credit scoring system to award points for each factor. Your credit score is the total number of these points. This score helps predict whether or not you are a credit risk, i.e. how likely you are to repay a loan and make payments on time. Usually, if you are a good credit risk you have a high credit score. As I mentioned in the previous blog, you can get you credit score from the three nationwide consumer reporting companies.

I hope this information was helpful to you. If you live in Denver, Aurora, Arvada, Brighton, Broomfield, Commerce City, Englewood, Highlands Ranch, Lakewood, Lafayette, Littleton, Northglenn, Westminster, Wheat Ridge, or Golden, Colorado, please feel free to contact me. Kevin D. Heupel, Colorado bankruptcy attorney, 303-955-7570, Colorado Bankruptcy Help Email, personal bankruptcy free-consultation form .

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To conclude my previous blog I would like to discuss how to dispute a credit error. You must inform the creditor or other information provider, in writing, that you dispute an item. You must include copies of documents that support your position. Many information providers supply an address for disputes. If the provider reports the item to a consumer reporting company, the report must contain a notice of your dispute. And if the information in your report is found to be inaccurate, the information provider is not allowed to report it again.

Below is a sample of the proper form for a dispute letter.

YourName                                                                                                                                                                                                        YourAddress                                                                                                                                                                                                    YourCity, State, Zip Code

Date

ComplaintDepartment                                                                                                                                                                                     NameofCompany                                                                                                                                                                                           Address                                                                                                                                                                                                                 City, State, Zip Code

To Whom it May Concern:

I am writing to dispute the following information in my file. The items I dispute also are circled on the attached copy of the report I received.

This item identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc. is inaccurate or incomplete because describe what is inaccurate or incomplete and why. I am requesting that the item be deleted or request another specific change to correct the information.

Enclosed are copies of use this sentence if applicable and describe any enclosed documentation, such as payment records and court documents supporting my position. Please investigate this (these) matter(s) and delete or correct the disputed item(s) as soon as possible.

Sincerely,

Your name

 Enclosures: (List what you are enclosing)

I hope this information was helpful to you. Please feel free to contact me. Kevin D. Heupel, Colorado bankruptcy attorney, 303-955-7570, Colorado Bankruptcy Help Email, personal bankruptcy free-consultation form .

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Before beginning the bankruptcy process it might be helpful to get your credit report in order. Your credit report states your home address, how you pay bills, and whether you’ve been sued or arrested, or have filed for bankruptcy. The information in your report is sold to creditors, insurers, employers, and other businesses. They use it to evaluate your applications for credit, insurance, employment, or renting a home.

To obtain your credit report you can either go to the website the three nationwide consumer reporting companies-Equifax, Experian, and TransUnion-have set up, call 1-877-322-8228, complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. Do not contact the three companies separately. They only provide free annual credit reports through the abovementioned website or the toll-free phone number provided above, or by contacting them via the mail at: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

You may request your credit reports from each of the three nationwide consumer reporting companies simultaneously, or you can make your request to only one or two of them. You are permitted by law to order one free copy from each of the nationwide consumer reporting companies every twelve months.

You must provide your name, address, SSN, and date of birth. If you have relocated within the last two years, you may have to submit your prior address. In the interest of maintaining the security of your file you may be asked for information that only you would know, such as the amount of your monthly mortgage payment. Each company may request different information because each may have information from different sources contained in your file.

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