5 Common Bankruptcy Myths

Here are 5 common myths that that I hear all the time from people that I consult with:

Myth #1: You Can Declare Bankruptcy by Saying It in Public
In an episode of The Office, when Michael Scott’s finances are tight, he screams, “I declare bankruptcy!” His accountant Oscar says, “Hey, I just want you to know that you can’t just say the word bankruptcy and expect anything to happen.” Michael replies, “I didn’t say it, I declared it.” Of course, Oscar is right. Filing for bankruptcy typically requires paying a fee, completing credit counseling, and submitting a bunch of legal paperwork and financial disclosures.

Myth #2: You Can Only File Bankruptcy Once
You can definitely file bankruptcy more than once in your life. In fact: You can receive a discharge from a chapter 7 bankruptcy (the kind that liquidates your assets) once every 8 years You can receive a discharge from a chapter 13 bankruptcy (the kind that creates a payment plan) every 2 years. Additionally, if you complete a chapter 7, you must wait 6 years before getting a chapter 13 discharge. And if you get a chapter 13 discharge, you must wait 4 years to obtain a chapter 7 discharge.

Myth #3: A Bankruptcy Hurts Your Spouse
If you’re married, filing bankruptcy doesn’t affect your spouse’s credit. However, if you’re struggling to pay debt that’s in both of your names, then you should file bankruptcy together. Otherwise, creditors will simply demand payment for the entire amount from the non-filing spouse.

Myth #4: You Can Go to Jail for Owing Money
No matter what anyone says—especially an aggressive debt collector—it’s not against the law to owe money. There is no such thing as debtor’s prison in the United States. Creditors can sue you, take you to court, lien your property, and garnish your wages, but they can’t send you to jail. You can only be arrested if you commit a crime, like fraud, hiding property to avoid a judgment, or refusing to pay income tax.

Myth #5: Bankruptcy is Expensive
At the Law Office of Douglas Barrett, LLC we charge a flat fee for a consumer Chapter 7 bankruptcy that usually ranges from $600 to $1,200 depending on the complexity of your case. (There is also a $335 filing fee the court will charge) Our rates are at least 40% less than what the big, impersonal law firms charge. If you don’t have the money, don’t let that stop you from calling. We can recommend easy and legal pre-bankruptcy planning that you can do to reduce your monthly expenditures and save money for the bankruptcy fees.

Don’t risk a costly mistake. Contact us today to find out about your rights under federal bankruptcy law. Once you file we can immediately stop bill collectors, lawsuits, garnishments, foreclosures and repossessions.

“10 Best” Bankruptcy Law Attorneys for Client Satisfaction

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PRESS RELEASE

Orem, UT – The Utah Law Firm of Douglas Barrett, LLC was recently named as one of the “10 Best” Bankruptcy Law Attorneys for Client Satisfaction by the American Institute of Legal Counsel (AIOLC) an impartial third party rating service. In the September 2016 announcement the AIOLC noted that the firm was recognized for outstanding client satisfaction.

Douglas Barrett opened his bankruptcy practice in Orem in 2001. He is well known for his aggressive representation of consumer debtors in bankruptcy. During the past several years he has helped thousands of people file for bankruptcy protection in the U.S. Bankruptcy Courts. He is a member of the Utah State Bar Association, the National Association of Consumer Bankruptcy Attorneys and has been a frequent speaker on consumer bankruptcy law and personal finance issues throughout the state.

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A Judgment Is Not A Lien, But A Lien Can Be Created From a Judgment

A judgment and a lien are not the same thing.

A lien is a legal right to get paid from a specific asset/property, as opposed to from an individual person.

A judgment is a court order that allows a creditor to pursue collection actions against someone (including creating a lien against assets). Depending on the laws of the state involved, such collection actions can include getting a lien against property, or wage garnishment, or seizures of bank accounts, etc.

But as far as discharge in bankruptcy goes, a debt on a judgment is no different than any other debt that doesn’t yet have a judgment–they are dischargeable in bankruptcy unless they meet one of the exceptions set forth in 11 U.S.C. 523.

Income Tax Refunds and Utah Bankruptcy

Some people come to see their income tax refunds as a yearly bonus. In reality these refunds are usually caused by a taxpayer having paid too much in taxes during the past year. Sometimes people have even come to rely upon these refunds for planned yearly spending to catch up on bills, go on vacation, buy necessities, etc. Because of this reliance upon income tax refunds, those looking at filing for bankruptcy are often dismayed to find that the bankruptcy court may seize part or all of their refunds. How might this be avoided?

The first thing someone looking to file bankruptcy must understand is the idea of the “bankruptcy estate.” Every asset they have, or have the right to receive, at the time they file their bankruptcy is filed is considered a part of the bankruptcy estate. Every asset, to the extent not considered exempt, is subject to being taken by the bankruptcy trustee to distribute to the debtor’s creditors. Avoiding this taking of assets is one of the goals the person looking to file for bankruptcy, and should be the goal for an experienced bankruptcy attorney.

The best way to avoid loss of the refund is to work with an experienced bankruptcy attorney. At the Law Office of Douglas Barrett, LLC we can help you determine when to file your tax return and when to file for bankruptcy protection. There are a many, many, many possible pitfalls for the unsuspecting bankruptcy filer in Utah. Visit us at www.utahbk.info for more information

Bankruptcy Filers Beware: Con-Artists Posing As Attorneys

Dan LaBert | Latest News | October 14, 2015

Telephone-Scam Soliciting Wire Transfers Prompts NACBA and Vermont Attorney General to Issue Consumer Warning

Across the country, consumers are falling prey to a new scam targeting people who have filed for bankruptcy and others just getting started with the process. Bankruptcy attorneys are joining forces with public officials to sound the alarm bell to unsuspecting consumers.

The con artists are using software that “spoofs” the Caller ID system so that the call appears to be originating from the phone line of the consumer’s bankruptcy attorney. Victims of the scam are being instructed to immediately wire money to satisfy a debt that supposedly is outside the bankruptcy proceeding. Some consumers have been threatened with arrest if they fail to wire money to pay the debt.

In some instances, the perpetrators are using personal information from public filings to identify consumers, assume the identity of their attorneys and sound more convincing by phone. These calls are typically placed during nonbusiness hours, making it difficult for clients to verify the call by getting in touch with their attorney to ask about it.

The National Association of Consumer Bankruptcy Attorneys (NACBA) and its individual members want consumers to know that under no circumstance would a bankruptcy attorney or staff member telephone a client and ask for a wire transfer immediately to satisfy a debt. Nor would the bankruptcy attorney and staff ever threaten arrest if a debt isn’t paid.

Consumers should be advised that legitimate debt collectors and agencies cannot threaten arrest in order to satisfy. If you or a family member receive this kind of call, the best thing to do is to hang up and contact your bankruptcy attorney as soon as possible. Do NOT give out any personal or financial account information to the caller.

 

It’s morally wrong to file for Bankruptcy?

Many people facing bankruptcy feel a strong sense of failure and embarrassment. The banks and even the media would like you to feel it is your fault. The truth is my clients are good people who want to pay their debts but find themselves in a bad situation. Many have found themselves drowning in debt due to no fault of their own. You have a legal right to seek real debt relief under the U. S. Bankruptcy Code. My best advice is to hold off on any moral judgment until you have all the information.  If you would like more information on filing for bankruptcy click HERE to visit my website.

Why should I file a Preemptive Bankruptcy?

The following are situations in which someone might want to consider bankruptcy as an option when faced with litigation where:
• the outcome is not likely to be favorable;
• the cost of defense is crippling;
• the possibility of a judgment in excess of the Chapter 13 debt limits; or
• findings of fraud are likely.
Waiting until the end of the litigation may be too late for relief in bankruptcy from adverse consequences.  However, as with all such matters, consulting a Bankruptcy Attorney early in the process is the best idea. More information on Utah Bankruptcy can be found at www.dlblaw.com

 

Press Release: 2015 Utah Legal Elite

Douglas L. Barrett, for the tenth consecutive year, has been named as one of the “Legal Elite” lawyers in the State of Utah in a recent poll conducted by Utah Business, a state-wide publication. The announcement was made in the March 2015 Legal Resource Guild of the magazine.
The “Legal Elite” represent those Utah lawyers who their peers believe are the very best in their respective areas of practice. Barrett was selected for his expertise in “bankruptcy law.”
Mr. Barrett opened his own bankruptcy practice in Orem in 2001. He is well known for his aggressive representation of consumer debtors. During the past several years he has helped thousands of people file for bankruptcy protection in the U.S. Bankruptcy Courts. He is a member of the Utah State Bar Association, the National Association of Consumer Bankruptcy Attorneys and has been a frequent speaker on consumer bankruptcy law and personal finance issues throughout the state.

WHAT IS CHAPTER 13 BANKRUPTCY?

To be eligible to be a Chapter 13 debtor, individuals must meet, among other things, the following two requirements: (i) they must have a regular income, and (ii) their debts must not exceed a certain amount. If the individual’s current monthly income is less than the applicable state median income, the plan will generally be set up for three years, although the court may approve a longer plan. If the debtor’s current monthly income is greater than the applicable state median, the plan is generally for five years.

Chapter 13 bankruptcy filing is a way for individuals to undergo a financial reorganization supervised by a federal Bankruptcy Court. The Bankruptcy Code anticipates the goal of a Chapter 13 case as enabling income-receiving debtors debt rehabilitation provided they fulfill a court-approved plan. Compare the goal of Chapter 13 with the relief contemplated in Chapter 7 that offers immediate, complete relief of many oppressive debt(s).

Under Chapter 13, the debtor proposes a plan to pay his creditors over a 3 to 5 year period. During this period, his creditors cannot attempt to collect on the individual’s previously incurred debt except through the bankruptcy court. In general, the individual gets to keep his property, and his creditors end up with less money than they are owed.

For more information on Chapter 13 Bankruptcy in Utah check out: www.utahchapter13.com

CAN I RE-PAY A DISCHARGED DEBT AFTER MY BANKRUPTCY CASE HAS BEEN CONCLUDED?

A debtor who has received a discharge may voluntarily repay any discharged debt. A debtor may repay a discharged debt even though it can no longer be legally enforced. Sometimes a debtor agrees to repay a debt because it is owed to a family member or because it represents an obligation to an individual for whom the debtor’s reputation is important, such as a family doctor. Visit DLBLAW for more information on Utah bankruptcy.