Wednesday, July 30, 2014

Study Says 35% of Americans Facing Debt Collectors

According to a recent study released by the Urban Institute, more than 35% of Americans have debts and unpaid bills that have been reported to collection agencies.  These adults owe an average of $5,178.00. The full study can be found here.

The study reveals that the East South Central census region (which includes Kentucky) has the second-highest percentage of people with a debt in collections, with 41.3% of people having an account in collections.

Debt collectors do not just collect unpaid credit cards, but a wide-range of debts such as:
  • cell phones
  • utilities
  • gym memberships
  • book clubs
Every case is different, and if you are considering bankruptcy you should consult an attorney, but most of these types of debts can be discharged in bankruptcy. 

It is also important to familiarize yourself with the protections offered by the Fair Debt Collection Practices Act (FDCPA), which applies to debt collectors, and limits the actions they can take in trying to collect a debt.  I have litigated a large number of FDCPA cases, and it is vital that debt collectors be held accountable for violations of this important federal law.

Thursday, June 6, 2013

Can I Afford to File Bankruptcy?

One of the most common questions that we receive from people has to do with whether they can afford to file bankruptcy.  The cost of filing a bankruptcy depends on what type of case you file, as well as the attorney fees involved with the filing.  Some firms charge a flat fee for particular types of cases.

Other attorneys charge fees based on a review of each situation.  For attorneys that use this approach, factors involved in determining attorney fees would generally include: type of case; number of creditors; property owned; as well as a general review of whether there are any complicated legal issues involved with the filing. My firm makes every effort to customize our attorney fees to fit each case, rather than using a flat fee approach. 

When you sit down to discuss your case with an attorney, find out what the attorney will charge, as well as what the attorney will do for the fee that is charged.

Filing Fees

One thing that attorneys do not have much control over are the filing fees charged by the U.S. Bankruptcy Court.  In most cases, anyone attempting to file bankruptcy must also pay a filing fee to the U.S. Bankruptcy Court.  Currently (July 2014) a Chapter 7 bankruptcy has a filing fee of $335.00, and a Chapter 13 bankruptcy currently has a filing fee of $310.00.

However, there are situations where you can pay these filing fees over time, and in some cases, the Bankruptcy Court will eliminate the fee completely.  If you visit the US Courts website, you can find links to the official bankruptcy forms

Form B3A (Official Form 3A) allows debtors to pay the filing fee in up to four installments, after the filing of the case.

Form  B3B (Official Form 3B) allows the debtor to request that the Bankruptcy Court eliminate the filing fee.  This is only available in a Chapter 7 case, and cannot be used in a Chapter 13.  Whether you qualify for this depends on your income and family size.