Avoid Personal Bankruptcy

A piece of legislation designed to keep consumer information private in online transactions was proposed in the Senate this week by John McCain (R-Ariz.) and John Kerry (D-Mass.). Unveiled Tuesday, the Commercial Privacy Bill of Rights addresses many issues of consumer privacy that the Obama administration has pushed for.

In its current form, the proposed legislation would:

• Grant consumers wider rights to govern the use of their online information. While the bill does not include a “Do Not Track” provision, as some consumer advocates apparently hoped, it does offer consumers wider rights than currently exist to determine how their digital information can be transmitted and used.
• Tighten information sharing regulations for companies. If passed into law, the bill would require companies to provide consumers with the explicit chance to opt in to information sharing. In

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Summary

In a 13 page decision signed, April 11, 2011, Judge Carey of the Delaware Bankruptcy Court granted a motion disallowing a creditor’s late-filed bankruptcy claim, and held that if there is no legal requirement that a party respond to an affidavit, a lack of response does not bind a party to that affidavit nor can it be considered an admission by that party.  Judge Carey’s opinion is available here.

Background

Mr. Muhammad  took out a loan from New Century Mortgage Corporation (a “Debtor”) in order to purchase a home.  Then, after the loan was sold to another servicer, the Debtor entered bankruptcy.  Mr. Muhammad had troubles with the new servicer, and eventually was informed that his home was being foreclosed upon.  Opinion at *3. 

Mr. Muhammad filed a claim in the bankruptcy case based, in part, on numerous documents with names such as “Affidavit of Truth” or “Statement-of-Specific-Facts” which he had previously filed with the office of his County Register of Deeds.  The Debtors never responded to the documents filed with the Register of Deeds, but they did object to Mr. Muhammad’s claim as la

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Whether you’re trying to rebuild your credit after a personal bankruptcy filing, shore it up to qualify for a mortgage or car loan, or just aiming to make sure your credit is the best it can be, it’s important to take stock regularly of your credit practices and make sure you aren’t making any potentially detrimental mistakes.

So what are some common errors even the best-intentioned make when trying to establish a strong credit profile? A recent post from InvestInternals.com mentions these:

• Closing old credit accounts: One factor that affects your credit score is the age of credit accounts. Older is better. But some people who have stumbled with credit in the past (for example, run up serious credit card debt and worked hard to pay it off) attempt to eliminate temptation by closing old accounts. This essentially eliminates any proof that you have a history as a credit user and thus makes you seem like a bad credit risk to potential lenders. Inste

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As I recently wrote, you don’t have to be a U.S. citizen to file bankruptcy in the United States.

Just like many U.S. citizens, there are many non-citizens living legally in the United States who are drowning in debt and contemplating filing bankruptcy. One big difference between the two groups is that many of the non-citizens worry that filing bankruptcy could hurt their immigration status.

The good news for non-citizens is that filing a bankruptcy generally will not affect immigration status or citizenship applications. Immigration papers do not ask if you have every filed bankruptcy and bankruptcy documents do not ask about your citizenship or immigration status.

The things that may negatively impact immigration status are criminal activity and other evidence of negative moral character.

It’s not a crime to file bankruptcy. In fact, filing bankruptcy is a perfectly legal and common way to deal with serious debt problems.

And while in times past the act of filing bankruptcy may have been considered an act of questionable moral character by some, with over one million consumer bankruptcy cases being filed on an annual basis these days, bankruptcy has become a common, accepted practice.

Certain criminal activity will mandate a non-citizen’s deportation. And c

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I’ll be the first to admit, math is not my strong suit. Despite having a Tiger Mom and having taken years of Kumon I still have to reach for the calculator whenever I do math.

If you are mathematically challenged like me, you probably have no idea what your monthly payment is on a  $10,000 credit card debt repaid over 5 year at 10% interest. How about 20%? 30%?

You may be surprised to learn that you would repay almost DOUBLE the amount you borrowed over 5 years at 30% interest.

Here’s the break down: Loan amount: $10,000 Repayment: 5 years

Interest rate/ Monthly payment/ Total amount repaid 10% $212.47 $12,748.23 20% $264.94 $15,896.33 30% $323.53 $19,412.04

To put these numbers into perspective, if you were to repay the same $323.53 at 5% interest, you would have repaid the ENTIRE loan after 34 months (that’s 2 years and 10 months). In another words, you would be done with debt 2 years and 2 months sooner just by a reduction in the interest rate.

This is the reason why credit card debt is so to toxic. You end up paying 100%+ of the amount borrowed on interest alone.

One of the most common mistakes I see clients make is making the monthly minimum payments on their credit cards. Making

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Earlier this month, Avidity Partners, LLC (“Avidity”), in its role as claims agent for the bankruptcy estates of AbitibiBowater, Inc., et al. (“Debtors”), began filing avoidance actions against various defendants.  As alleged in the complaints, on April 16, 2009, Debtors filed petitions for bankruptcy with the United States Bankruptcy Court for the District of Delaware.  As I reported in a prior post concerning the AbitibiBowater bankruptcy, going in to bankruptcy Debtors were one of the largest newsprint producers in the world (my prior post regarding the AbitibiBowater bankruptcy is available here for review). 

On November 23, 2010, the Delaware Bankruptcy Court approved Debtors’ Second Amended Joint Plan of Reorganization.  Debtors’ Plan of Reorganization became effective December 9, 2010.  Under the Plan, Debtors appointed Avidity as claims agent to litigate and/or settle avoidance actions pursuant to sections 547 and 548 of the United States Bankruptcy Code. 

The AbitibiBowater avoidance actions, along with the AbitibiBowater bankruptcy proceeding, are before the Honorable Kevin J. Carey.  

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