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Looking for a Lansing bankruptcy attorney, We are hear to help, Let Cuzydlo Law help you make the right decision.

Call Cuzydlo Law at 517-853-3962 and be sure to read our post from October 8th, 2010 What Not To Do If You Are Contemplating Bankruptcy.

I recently read a great what you should not do article written by Dana Wilkinson. It is attached below. If you have any questions regarding bankruptcy don’t hesitate to contact Chuck Cuzydlo at 517-853-3962 for your bankruptcy issues in Okemos, East Lansing, Lansing, Michigan, Mid-Michigan, Ingham County, Eaton County, Clinton County.

Bankruptcy Planning: Ten Dumbest Things NOT to Do–Part One

by Dana Wilkinson, Attorney at Law · Posted in *Bankruptcy Basics,Family Debt Problems,Personal Finance,Your Bankruptcy Attorney & You

As a bankruptcy attorney, a recent headline offering to tell me the dumbest mistakes I could make if I owed too much debt caught my eye. Rarely does a potential bankruptcy client come to me as soon as they get into financial trouble; often they have done things to try and fix the problems themselves that I can only wish had not been done. Unfortunately the headline that caught my eye was only a link to an advertisement that didn’t deliver on the promise, but it got me thinking. Here is my list of the dumbest things you can do if you owe too much money, or, put another way, what NOT to do if you owe too much money.

1. Don’t tap your retirement funds. One frequent mistake made by people in financial trouble is to take money out of a 401k plan or IRA in order to pay things like credit card debt. Retirement funds like 401ks and IRAs are protected from both creditors and bankruptcy trustees. Creditors can’t take that money, and there is a reason for that: you NEED it. The only way that creditors can reach that money is if you voluntarily take it out and give it to them. There might be situations in which using retirement funds to pay debt make sense, but if taking the money out of retirement doesn’t solve the whole problem, (like paying off ALL your credit card debt AND the taxes that you are going to incur for early withdrawal) then it is probably a dumb thing to do. Most of the time my clients have taken money out of retirement and used it to make minimum payments. As a result, they still owe more money than they can pay to creditors, and now they owe taxes, too.

2. Don’t try to pay those loans from family members first. One of the things many people think of doing when they get into financial hot water is to try and pay off family members before filing bankruptcy, or before a creditor gets a judgment. While the impulse to try and pay off those who are close to you is understandable, it may be a very bad idea, for several reasons. It may cost the family member you are trying to protect a lawsuit, depending on when you do it and what happens later. It may eliminate bankruptcy as an option to help you, or make your bankruptcy more expensive. And it may not work–many such payments can be unwound, whether you plan to file bankruptcy or not. A better option is to consult with a lawyer before making any such payments, and find out what kind of problems you may be creating for yourself. If you’ve already done it, consult with a bankruptcy lawyer anyway, and ‘fess up to the problem–what my friend Russ DeMott calls “putting the skunk on the table.” Your lawyer may be able to unwind the transfer and put you back where you started. Many times I can offer clients with family obligations better options, and accomplish the same goal while reducing their risk. One further note–I’m talking about loans from family members, not child support or alimony obligations. Pay the things the Bankruptcy Code calls “domestic support obligations” or some judge may throw you in the pokey.

3. Don’t take money out of retirement to pay off family members. A combination of the prior two bad ideas is a REALLY bad idea. Taking money out of a 401k or IRA to pay back a family loan is the granddaddy of bad ideas when you are in financial distress. Not only do you incur taxes and penalties, but you have taken money that is protected from your creditors (in a 401k or IRA) and made it free game for those creditors, and for a bankruptcy trustee. Absolutely, positively do not do this without consulting a lawyer.

4. Another really bad idea is to transfer assets away when you run into financial trouble. Clients frequently tell me that they have some equity in an asset, and then ask me if they should transfer it to someone else. The answer to that question is almost always “no.” In fact, I can’t think of any exceptions to that rule, but I will leave it at “almost always” in case there is an exception I’ve never run into. Unfortunately, many of the people I talk to have already done that. I don’t call them “clients” because I may not be able to help them, so they don’t become clients. The transfer of an asset to keep it away from creditors is called a fraudulent conveyance, and it can have very serious consequences. It can restrict or eliminate the kind of bankruptcy relief you are entitled to, it can result in more law suits, and it can generally be unwound. And often the asset that was transferred away is one that is exempt, that creditors couldn’t reach anyway, that is, until you transfer it away. That’s right, once you give it away, you are no longer entitled to claim it as exempt property. You can really make a mess for yourself with this one, so don’t do it.

5. Don’t exhaust your savings to pay unsecured debt when your income drops. Note that I used the word “exhaust.” Most financial gurus will tell you that you need an amount in savings equal to your monthly bills for several months (two to six, depending on the “expert). I’m not talking about a situation where you have enough savings to carry you for six months, and you are going to be out of work for surgery for two months. I’m talking about a situation where you’ve been laid off, and you’re facing an indefinite period without sufficient income to live on. Most of us would cross our fingers and try to keep paying everything for a month or two. But don’t continue to try to pay unsecured debt at the expense of paying the folks who can really hurt you, like your mortgage company. If you aren’t sure about which is which, and how you should prioritize the use of your savings, consult with an attorney, or with a financial counselor. How you should set your priorities, and what options you have depend on your individual situation, including your age, your assets, and how much you owe. If you aren’t sure, look for expert advice that is tailored just for you.

Tune in for Part Two, and avoid the mistakes that will cost you in the long run.

Wow! You think all bankruptcy attorneys are created equally – no way. This is a great article I found written by Rachel Lynn Foley. It is a must read before you hire any bankruptcy attorney. Give Chuck Cuzydlo a call at 517-853-3962 if you are thinking about filing for bankruptcy in Lansing, Mid-Michigan, Michigan, Ingham County, Clinton County, Eaton County, Okemos, Haslett, DeWitt, or East Lansing.

Bankruptcy Is Not A Pizza!
by Rachel Lynn Foley, Kansas City, MO, Bankruptcy Attorney · Posted in *Filing for Bankruptcy

Bankruptcy is not a pizza! You can not just walk into an attorney and say, “Hey I want a Chapter 7 with extra cheese” and call it a day. Bankruptcy is a very specialized area of the law and if you don’t hire the right attorney or know what you are doing if you are filing yourself, you could lose everything including your freedom. It is said time and time again, my case is easy and should not cost me very much to handle. Every case is as different as snow flakes because there are truly no two cases exactly the same. There is no combo meal number 7 or 13 that you can order for bankruptcy relief.Although many cases are similar in nature there are factors that make your case unique. Those factors may make your case harder or they may make your case easier. It just depends. When you hire an attorney to review those facts and to analyze your financial situation. You are purchasing our time and talent. Even though you may not walk out with the combo meal number 7 you have something from us, our time and talent. There is a value placed on that time and talent and that is what you are paying for, regardless if you decide to file or not. Once you use our time we cannot go and recapture those moments, but you have walked away with the knowledge we have given you.

Now, to be honest, there are attorneys out there that may cookie cutter your bankruptcy and for them it is like making a pizza. They take a basic Chapter 7 and a little bit of this and a little bit of that. But none of my colleagues practice that way and neither does my office.

Many of my clients think I am just plain nuts because of the way I practice until they get to the 341 meeting of creditors. When they find out that I have prepared them for most of the questions or they witness someone else being grilled because their attorney did not ask the right questions, I hear “Now I understand why you asked so many questions.”

Not only is bankruptcy not a pizza, it is not a game! This is not hide the asset from the creditors and/or the trustee. This is the time to lay all the facts on the table and find the best possible solution for you. The bottom line is you may have to pay back some, all or none of your debt. It just depends on the facts of your case.

Look at your financial situation from the flip side as a creditor. Let’s say the Joe Mokey owed you $10,000 and he did not live in Florida or Kansas. Now let’s say Joe owns a million dollar home free and clear. If Joe filed for bankruptcy and walked away debt free and still owning his million dollar home you would be very upset. Why? Because it is not fair or just under this situation that you are not paid but Joe gets to keep his million dollar home.

So when you file for bankruptcy the attorney has to analyze your case under the standard as to what is fair and just for you as the debtor. The trustee will analyze what is fair and just for the creditor. Each bankruptcy should at a minimum be analyzed from the trustee’s perspective and anticipate possible problems or exposures. This process takes time, talent and training.

The article pigs get fat and hogs get slaughtered illustrated what effect greed has on a situation. The mortgage companies have been hogs for a long time and now they are being lined up for slaughter. But whether you are a mortgage company or an individual, greed will take you under at some point in your life.

Remember that knowledge is power and the more knowledge you have about filing bankruptcy the more power you will have to determine who is going to treat your case like making a pizza or who is going to take the time and talent to properly analyze your financial situation.

I recently read an article by Russell DeMott regarding a new case regarding student loan debt and whether it is dischargeable in Bankruptcy. The article is below. It is a great read. If you or a family member or friend have too many debts and/or student loans call Chuck Cuzydlo at 517-853-3962 to discuss your options.

Bankruptcy Appellate Panel Gets Student Loan Test Right

by Russell A. DeMott, Charleston Bankruptcy Lawyer · Posted in Student Loans

bankruptcy student loans Bankruptcy lawyers and their clients are plagued by the Brunner test when trying to discharge student loans.

While the Bankruptcy Code says that student loans may be discharged if the debtor shows “undue hardship,” the Brunner test provides that student loans may only be discharged if the debtor shows: (1) inability, at his current level of income and expenses, to maintain a “minimal” standard of living; (2) the likelihood that this inability will persist for a significant portion of the repayment period; (3) and the existence of good faith efforts to repay the student loans. In essence, it’s undue hardship on steroids—undue hardship in the most extreme. As I tell my clients, this really means you must be physically or mentally disabled to discharge your student loans. Not making enough money isn’t enough.

But last week winds of judicial change blew out of the northeast. In a well-reasoned opinion, the First Circuit Court of Appeals Bankruptcy Appellate Panel rejected Brunner in the case of In re Bronsdon, instead opting to follow the Eleventh Circuit Court of Appeals’ “totality of circumstances” test.

The issue before the Court was whether 64-year-old Denise Bronsdon could discharge $82,000 in student loans. Bronsdon, a law school graduate, unfortunately was unable to pass the bar exam and lives solely on Social Security. She also lives in her father’s den, unable to obtain her own home on her small income. As the Court noted, there was no way someone on Ms. Bronsdon’s income and at her age would pay back $82,000.

But, as I’ve said before, owing student loans is like owing the mob. And this case was no different. The student loan creditor, Educational Credit Management Corporation, (“ECMC”) fought poor Ms. Bronsdon in the Bankruptcy Court, District Court, back in the Bankruptcy Court on remand, and then eventually all the way to the First Circuit Court of Appeals. And at each step along the way, ECMC fought with tenacity only Tony Soprano could rival.

However, despite ECMC’s best efforts to keep Ms. Bronsdon in financial bondage, the Court rejected ECMC’s request for the Court to adopt Brunner and to deny Ms. Bronsdon discharge of her student loans. Instead, the Court, quoting two other Massachusetts bankruptcy cases opining that Brunner “tests too much” and was “overkill,” ruled against ECMC. The Court also stated that the good faith requirement of Brunner was “without textual foundation.” (In layman’s terms, that means it was just made it up.)

The Court explained that it would instead follow the “totality of circumstances” test, which it summarized as follows:

Can the debtor now, and in the foreseeable future, maintain a reasonable, minimal standard of living for the debtor and the debtor’s dependents and still afford to make payments on the debtor’s student loans?

The Court further explained that “courts should consider all relevant evidence–the debtor’s income and expenses, the debtor’s health, age, education, number of dependents and other personal or family circumstances, the amount of the monthly payment required, the impact of the general discharge under chapter 7 and the debtor’s ability to find a higher-paying job, move or cut living expenses.” Essentially, the Court said it would examine the debtor’s circumstances and determine whether repayment would cause the debtor, or the debtor’s dependents, undue hardship. No more, no less.

And in this case finding undue hardship was a no-brainer. In fact, the Court found that requiring repayment of the student loans might lead to Ms. Bronsdon becoming homeless. Given the facts of this case one wonders how ECMC believed that it had any good faith argument against allowing Ms. Brondson’s request to have her loans discharged. I’ll bet even Tony Soprano would have given her a break.

Many people have started a business, whether that business is trucking, medical, real estate, etc. you may well qaulify for a Chpater 7 bankruptcy regardless of income. If your debts are primarliy business debts the means test does not apply.

We have discharged millions of personally guaranteed loans via the Chapter 7 process to various professionals who have yearly earnings in excess of $500,000.

Regardless of your business, if you have personally guaranteed its debts call Chuck Cuzydlo at 517-853-3962 to discuss discharging those guarantees today!

Unfortunately, for many people today they owe more than their homes are worth. Before the “bubble burst” on the housing market many people obtained second mortages to pay off credit card debt, start a business, or send their children to college. Now, years later you are dealing with a first and second mortgage that are two times more than the value of your home! What should you do? What can you do?
First, call Chuck Cuzydlo at 517-853-3962. All is not lost! Did you know that if the balance on your first mortgage is greater than the value of your home – that second mortgage is wholly unsecured. What does that mean? It means that you can keep your home and strip the second mortgage through a Chapter 13 bankruptcy. As long as you complete the Chpater 13 process, which can take up to 60 months depending on your income, you may pay pennies on the dollar and discharge the second mortgage.
If you live in Lansing, Okemos, East Lansing, DeWitt, Mason, Holt, or Ingham County, Clinton County, Eaton County, or any where in Mid -Michigan or Michigan you owe it to yourself and your family to call Chuck Cuzydlo today at 517-853-3962 for a free consultation to determine how best to deal with your financial issues.

I recently read a great article titled “Thinking of Filing Bankruptcy? Don’t Always Listen To Friends” written by Susanne Robicsek, a North Carolina Bankruptcy Attorney and posted in *Bankruptcy Basics”

“My friend told me that I will lose my house if I file so I know I don’t want to file bankruptcy, but I have so much debt I just don’t know what to do.”

The myth that you can’t file bankruptcy and keep your house just won’t go away. While some people may lose their house, it is often more common that it happens because they can’t make their mortgage payments, and not because they filed for bankruptcy.

Many people file bankruptcy and keep their home, cars and personal belongings. How you are affected will depend on your particular circumstances, how much your house is worth, what your loan balance(s) is, and even the state you live in.

Taking legal advise from friends is almost never a good idea, unless they are a lawyer and know what they are doing. If the friend doesn’t know the details of your loan, the value of your house, and what else is going on in your financial life, they can’t know if your home is at risk.

Each state allows you to keep a certain amount of property if you file bankruptcy, and most states have a homestead to protect some or all of your home. The allowances are called exemptions, and the bankruptcy laws have a set of Federal Exmeptions, but allow states to opt out and use their own state’s exemption laws. On top of that, you might have to use exemptions from a state you used to live in if you try to file bankruptcy in a state that you haven’t lived in at least two years.

The homestead exemption varies greatly, with some states only protecting a small amount of equity in the home, and others protecting it totally.

The best thing to do is to talk to an experienced attorney in your area so they can tell you what exemptions to use, if you can be helped, and if you have anything to worry about. Don’t just take your friend’s word for it.

Call Chuck Cuzydlo at 517-853-3962 or email crc@cuzydlolaw.com

You get a call from a debt collector – - what shoudl you do?

What to Expect from Debt Collectors
While federal law specifically states that debt collectors must follow various guidelines that basically add up to treating debtors with respect, various reports have suggested that many collectors regularly break these guidelines—and most consumers don’t realize they have rights in the matter.

Here are some classic maneuvers to watch out for and speak up about if you encounter:

?Trainees don’t count. It seems that some collection agencies excuse illegal behavior from employees by identifying them as “trainees,” meaning that they haven’t been fully instructed on how to behave according to the laws. To counteract this potential argument, make sure you document any threatening or rude calls from debt collectors: get their name, employee number, the date and the time of the call.
?Tapes and lawyers come in handy. Apparently, debt collectors will play by the rules if you notify them that you are recording the conversation or that your lawyer is handling your debt collection calls. Be warned, though, that professional collectors have worked with a lot of debtors and you’ll actually need to have a lawyer retained if you claim you do.
?Don’t give permission. In order to contact you outside the hours of 8:00 am and 9:00 pm, debt collectors need your express permission; however, it seems that some debt collectors will essentially lie about getting such permission by fudging their notes about a call. This reinforces the importance of taking notes about such phone calls yourself to use in cases of harassment.
?Collectors probably know your credit history. One reportedly common tactic is for a collector to refer to other debts you may be current on when trying to collect a debt on which you’ve fallen behind. This means that you should be checking your credit report regularly to make sure you know at least as much as they do.
?Get settlements in writing. If you and a collector agree to settle a debt for a partial, lump-sum payment, be sure to get the agreement in writing before making any payments. The agreement should have the original amount of the debt, the agreed settlement amount and the terms of the repayment. If you’re communicating with a collector over the phone, insist on an emailed PDF or a faxed copy of the agreement before making any payment.

Call Chuck Cuzydlo at 517-853-3962 or email him at crc@cuzydlolaw.com TODAY!