Bankruptcy dismissal is scary, it can happen to the best of us; but it doesn’t have to be the end of the world. If your bankruptcy case was dismissed, you need to first contact your bankruptcy attorney. Or, if you attempted to file bankruptcy without an attorney and your bankruptcy case was dismissed, you need to immediately find a bankruptcy attorney that will be willing to work with you and take on the case.

Why was your case dismissed? Most likely it is something that you, the debtor did incorrectly. A missing form, late or missing payments, non-response to a notice or a number of other things could be the cause of a bankruptcy case being dismissed. Work with your bankruptcy attorney to find out why your bankruptcy case was dismissed and work quickly to fix the error(s). Generally, you only have ten days to rectify any errors and reinstate your bankruptcy case. There are times when you will not be able to reinstate your bankruptcy case no matter what; for example if you failed to take your credit counseling course. This is why it is so important to work with an attorney so that you have a knowledgeable bankruptcy professional working on your side as your advocate through the bankruptcy process.

As we have discussed on this blog many times, student loans can be a financial thorn in the side of many debtors. There are nearly impossible to discharge and they eat away at debtor’s assets for years after they’ve graduated from college. But there’s something else fishy about student loans that many students need to be wary of…private student loans. Many students assume that when they take out a student loan that they are getting a federal loan but that’s not always the case and you need to read the fine print because the difference can be dangerous to your financial health.

Federally guaranteed student loans have fixed interest rates, currently 6% to 6.8%. Private student loans on the other hand have interest rates comparable to a subprime credit card, running 15% or more and that’s not including the fees they hit you with.

Students need to be cautious and avoid private student loans; they are costly and can destroy you financially. It is unfortunate that students, some as young as 18 years old are not being told about the true costs of student loans upfront before they sign the papers. The government requires other lenders, such as mortgage lenders and car financers to fully disclose the true cost of the loan before the borrower signs any papers, why not students?

If you are a student or recent graduate overwhelmed by student loan payments and other debts contact a bankruptcy attorney today to find out how you can reorganize your debt and maybe even discharge some non-student loan debt in bankruptcy. Taking action now may make it easier for you to repay your student loans and protect more of your assets.

There’s an interesting article at the New York Times about how a record number of churches are facing foreclosure as the credit crisis seizes every sector of American life. During the real estate boom many churches took advantage of easy credit and expanded. Banks, eager to cash in lent money based on the hope that church membership would grow and as a result donations. But now with a financial crisis, homeowners facing foreclosures, job losses and personal bankruptcy many church members are giving less and hundreds of churches across the country are knee-deep in debt and facing foreclosure.

According to the article:

Historically, churches were wary of debt, and many old-line congregations have owned their buildings free and clear for decades. But borrowing by churches became more common in the 1990s, reaching $28 billion nationwide in 2006, including mortgages, construction loans and church bonds, according to Lambert, Edwards & Associates, a consulting business in Grand Rapids, Mich. New companies and nonprofit organizations focused on church lending sprang up, as did real estate investment trusts and other bundles of church loans, which were sold to investors.

They bundled church loans and sold them to investors and we wonder why these financial "powerhouses" are facing bankruptcy and many homeowners (and apparently churches too) are facing foreclosure. Since when did church loans become big business in the eyes of the financially savvy? Already, 254 churches have been foreclosed on and the numbers of foreclosures are predicted to increase with at least 25% of all churches holding mortgages on their properties. I wonder how many of these church loans are toxic, subprime or adjustable rate mortgages? It is definitely a sign of the times when religious congregations are being evicted from their churches.

Drowning in debt and struggling with looming foreclosure, many homeowners in slumping markets such as Dallas-Fort Worth are looking to bankruptcy to help them rebuild their financial lives. Many debtors facing foreclosure or other urgent debts delay bankruptcy because they fear the impact it will have on their credit score. Well the truth of the matter is that if you’re behind on your bills your credit score is already taking a serious hit and reducing your chances of getting credit. Allowing your home to go into foreclosure can sink a good credit score by more than 100 points. But with bankruptcy, your credit score may actually increase afterwards because of the debt balances showing $0. Some creditors may be more willing to lend to a debtor who has filed bankruptcy than someone in foreclosure because they know that it is not possible for you to file bankruptcy again for a number of years. Remember, as the economy is going through a serious crisis, you aren’t alone in facing financial difficulties and filing bankruptcy. Millions of Americans are filing bankruptcy every year simply because the current economic circumstances call for bankruptcy in many financial situations.

As the government hands out bailout money we need to make sure that credit is still available to those who have filed for bankruptcy and/or gone through a foreclosure. This is critical to restoring the health of the economy which is based on the consumer’s access to and responsible use of credit.

Here’s another reason why many debtors filing for Chapter 7 bankruptcy without the help of a bankruptcy attorney find themselves in a heap of financial trouble. Most debtors who are married but filing alone don’t understand that they will be required to use a means test form to determine their eligibility for Chapter 7 bankruptcy; but that particular form might unlawfully disqualify them from Chapter 7 bankruptcy. The problem is that the form required for the Chapter 7 bankruptcy means test includes all of the non-debtor spouse’s income when comparing the monthly income to the median income without making any allowances for expenses that non-debtor spouse may be solely responsible for such as; child support, taxes etc. Because of this, the Chapter 7 bankruptcy means test calculation might give a false indication of what the debtor spouse’s true monthly income is when filing for Chapter 7 bankruptcy. With the help of a bankruptcy attorney, a married debtor filing for Chapter 7 bankruptcy alone can advocate to a bankruptcy court to take this discrepancy into consideration. In such a situation a bankruptcy attorney may even ask that a debtor spouse be allowed to use the Chapter 13 bankruptcy means test instead of the Chapter 7 bankruptcy means test to make sure the debtor is treated fairly.

According to an article in the Dallas Morning News, nearly bankrupt banks who received the multi-billion dollar taxpayer funded bailout rewarded their top executives with nearly $1.6 billion in salaries, bonuses and other benefits in 2007. Personal use of company planes, private drivers, company funded financial planners and country club memberships were just a few of the perks offered by bankers who received bailout money. Although many banks have made an effort to trim executive costs, most executives are still making way more than the average American worker can ever dream of.

Goldman’s top executives are forgoing bonuses but still earn $600,000 a year in base salary. Not only that, but Goldman is actually fighting to keep the $255,000 chauffeurs and personal financial planners for their executives. Did I miss something? Didn’t these bankers come to the edge (or over the edge) of bankruptcy? Didn’t they come with their hat in hand to the American taxpayer, many of whom are bankrupt themselves, for a bailout? What about the autoworkers who are being laid off, where are their personal financial planners? They’re going to need one to try to figure out how to pay their mortgages, healthcare and save for retirement with NO income. There is nothing wrong with executives making large salaries. But there is something wrong with executives making large salaries after failing to keep their companies afloat financially whereby needing to depend on taxpayers for a bailout.

Although the bailout guidelines restricted executive compensation, it did not limit salaries or bonuses unless it would “encourage excessive risk” to the financial institutions. It seems to me, that the only people taking excessive risks are the American taxpayers.

The Dallas Morning News reports that in 2009 Texas will allow senior citizens with long-term healthcare insurance to keep more of their personal savings if they need to use Medicaid. Texas insurance officials will offer “private partnership policies” that will offer asset matching protection for those who purchase long-term healthcare insurance. For every dollar an individual uses in coverage from a long-term healthcare insurance policy he/she will be allowed to keep that same amount in their retirement savings or other personal assets if they ever need to use Medicaid.

For example, if a senior citizen uses $150,000 of a long-term healthcare insurance policy and needs to use Medicaid, they will be allowed to keep $150,000 in personal assets such as a retirement account or savings. Currently, Medicaid only allows recipients to have $2000 in savings to qualify for the Medicaid program.

Many seniors go bankrupt trying to pay medical expenses, especially nursing home costs which can decimate even the most fully funded retirement account. It’s good to see that Texas is taking proactive steps to make sure that seniors are rewarded for proper planning when it comes to healthcare insurance in their golden years.

The Associated Press reports that despite the $17.4 billion lifeline given to automakers last week, GM is still laying off 1,080 workers on Tuesday. So far, GM has sent 11,000 American workers to the unemployment line and that’s just in 2008 alone. For decades automakers such as GM have employed tens of thousands of Americans and helped ordinary workers become homeowners, send their kids to college and provided steady employment even in rough economic times. But, with automakers facing bankruptcy it seems that steady relationship with the ordinary American worker is coming to an end. Many of those workers have not prepared themselves for what seems to be an inevitable round of massive job losses in the nearly bankrupt auto industry. Many of these workers are just now (after being laid off) considering updating their skills so that they can find other employment in some of the more stable and even growing sectors such as healthcare; but is it too little too late? How will they pay their mortgages and other debts and avoid bankruptcy while they return to college to earn a 4 year degree?

Many of these workers don’t have that much time, if like most; they have worked for GM or some of the other automakers for 20 years or more. What will happen to the wealth that these workers accumulated as they struggle to find employment in a world where their specialized skills provide little value? What will happen to the future wealth of these workers that many other businesses depended on? The reality is that some of these workers are the same people who purchased the cars that were made in these factories and bought the homes that fueled the real estate boom. The government needs to take action to make sure that these workers facing job losses are able to easily preserve their wealth through bankruptcy or other mechanisms while they prepare to reenter a drastically changed economic landscape.

The Associated Press reports that Toyota’s U.S. car sales fell to their lowest point in more than 26 years as Americans reign in their budgets and battle job losses and the difficulty of finding car loans. Also, many consumers in the Dallas-Fort Worth area are delaying big purchases such as buying a new car and avoiding the extra burden of a car loan. With massive job losses around the country, many Dallas-Fort Worth residents are experiencing fears about becoming another victim of unemployment, massive debt and eventual bankruptcy.

Many foreign automakers saw U.S. automakers facing bankruptcy; but hoped that the financial turbulence would stay confined to American shores. But there has been no such luck; the credit crisis is having hard-hitting and far-reaching consequences for even foreign automakers. With the extra expense added to buying foreign automobiles many Americans must take out a car loan even on a used foreign vehicle. And of course with every car loan there is a risk for both the creditor and the debtor. The creditor risks a car loan default, especially in times of economic instability and the debtor risks possibility that he or she may be unable to repay the car loan in case of unexpected unemployment or reduced wage—something that we may see more of as businesses try to restructure their debt and save their own bottom-line.

Often debtors filing for Chapter 13 bankruptcy want to know what their monthly repayment plan will cost. It’s impossible for a bankruptcy attorney to give a debtor an exact dollar amount; but there are four factors that help determine how much money a Chapter 13 bankruptcy debtor will be required to pay.

1. The first factor is what is called “Chapter 7 Liquidation Analysis” which hypothetically examines what would happen to your unsecured creditors if you filed for Chapter 7 bankruptcy. If money would be leftover to pay the unsecured creditors in a Chapter 7 bankruptcy then at least that amount would be added to your Chapter 13 bankruptcy repayment plan.
2. The “Means Test” is used to determine your current monthly income, which uses the past six months of income to come up with the calculation.
3. The “Disposable Income Test” subtracts your regular monthly expenses from your monthly income. Expenses do not include things such as credit card payments, student loans or any other payments to unsecured creditors. This amount is your disposable income. The bankruptcy court may require you to use all of this disposable income amount to repay creditors in Chapter 13 bankruptcy.
4. “Required Payments To Priority And Secured Creditors” are payments that you must pay in full and first in Chapter 13 bankruptcy. These payments could include child support, taxes, student loans etc.

Speak to a bankruptcy attorney to determine how you can best protect your assets in a Chapter 13 bankruptcy.

Many times debtors who are considered “above median income” by the bankruptcy courts worry about their ability to pay bankruptcy repayment plans and the length of time they will be required to remain in Chapter 13 bankruptcy. Because many “above median income” debtors lack disposable income or have experienced recent financial disruptions, their financial ability to pay on paper does not match the reality of their circumstance. There has been some confusion about this point because in the past, “above median income” debtors filing for Chapter 13 bankruptcy were required to either pay their debts in full or to partially/fully repay creditors over the course of 60 months, even if they didn’t have any disposable income. However, recently bankruptcy courts have begun considering the debtor’s “real” income and expenses to determine a more feasible Chapter 13 bankruptcy repayment plan. Basically, “above median income” debtors can expect that the bankruptcy court will consider the debtor’s real ability to pay when determining the amount of the repayment plan over the course of 60 months.

If you’re an above median income debtor with little or no disposable income, Chapter 13 bankruptcy can still be a viable option. Generally speaking, bankruptcy courts will allow you to pay based on your ability and take into consideration your current financial obligations and income. To find out your bankruptcy options speak with a bankruptcy attorney today.

The Star Telegram reports that homeowners with federal tax liens against their real property—who are trying to sell or refinance their home—will receive much needed relief from the IRS. The IRS announced that it is offering an expedited process for removing or changing a tax lien on properties that are being sold or refinanced in an effort to help homeowners struggling in this financial crisis.

The IRS is increasing its manpower dedicated to expediting tax lien releases and changes by adding 40 collection advisor groups, including one in Dallas-Fort Worth. Normally the process to change or release a property-tax lien can take 30 days; but the IRS is pushing efforts to reduce that timeframe significantly.

The expedited property-tax lien process does not release a homeowner’s obligation to pay the tax, penalties, fees or interest and only applies to federal taxes, not state taxes.

For information more information about the tax-lien release/change process call the office at (214) or (817) 265-0123.

If you’re a homeowner who has a federal tax lien on your property and you want to sell or refinance your home, move as quickly as possible to take advantage of this program.

The Star Telegram reports that Federal regulators are implementing sweeping new rules for the credit card industry that will, amongst other things, prevent credit card companies from increasing interest rates on existing credit card account balances. But unfortunately the new restrictions won’t help debtors now, because the new rules wont take effect until July 2010.

The new rules will only allow credit card companies to raise interest rates on new credit cards and future purchases and cash advances. Also, the new rules would prevent credit card companies from allocating payments to balances with lower interest rates when a debtor has balances with different rates. In addition, debtors will get more time to pay balances and credit card companies will be required to give 45 days notice before any changes are made to the terms and conditions of the credit card account, that’s an additional 30 days.

It’s undeniable that this is good news for many cash strapped debtors struggling with credit card debt; but why is it being implemented in July 2010? Credit card debtors need help NOW. In two years many of these debtors will be suffering from collections, judgments, garnishments,bankruptcy and/or foreclosure. There was no delay for the banker bailout. These new rules need to be implemented now, helping to relieve the financial pressure many debtors are experiencing.

Associated Press reports that the Bush administration is still exploring bailout options for U.S. automakers; but has suggested that U.S. automakers may have to face an “orderly” bankruptcy. Detroit’s big three automakers have suffered the most sluggish sales in 26 years and are quickly running out of cash. The Bush administration says they want to avoid an automaker bankruptcy if possible but have conceded that bankruptcy is a serious possibility.

Both the automakers and the United Auto Workers union strongly oppose any type of bankruptcy for the big three automakers facing financial trouble. According to the Associated Press, The National Automobile Dealers spoke out against bankruptcy “in any way shape or form, orderly or disorderly, prepackaged or unpackaged, managed or unmanaged.” According to the Bush Administration a “disorderly bankruptcy” would be a Chapter 7 bankruptcy which would completely shut down the automakers’ companies and require the sale of assets to repay creditors. A Chapter 11 bankruptcy on the other hand would be categorized as “orderly” allowing the automakers to restructure their debt obligations.

It’s unfortunate; but most likely Americans will need to prepare themselves for some financial shockwaves, because it is almost guaranteed that at least one of these automakers will go bankrupt. The automakers are already getting desperate as they do everything humanly possible to conserve cash by enforcing extended holiday shutdowns of their plants. Chrysler is closing all 30 of its North American manufacturing plants for four weeks, Ford will shutdown 10 North American assembly plants for an extra week in January and General Motors will close as many as 20 factories for the entire month of January. That doesn’t sound exactly orderly to me. When companies shutdown, close or go on “extended holidays” they don’t make money and when they don’t make money they’re just one step closer to bankruptcy.

A little more than 394,000 employees work for U.S. passenger airlines, that’s the lowest amount in 15 years, according to the federal government. Airlines in the U.S. have experienced record job losses and plan to cut even more employees in an effort to stave off financial trouble. According the Bureau of Transportation Statistics, job losses are effecting all types of airlines, including major network carriers, low-cost carriers and regional airlines with American Airlines and United showing the largest numbers of job losses. United cut 5,200 jobs, 9.9% of its workforce, while American sent 2,900 workers to the unemployment line. And the job losses won’t stop there with carriers announcing more job cuts in the future. United announced that it would eliminate 7,000 jobs while American, expected more than 6,500 job losses.

These job losses will be even more painful for the economy because many workers at airlines are specialized employees whose training is suited only for the airline industry. It is more difficult for specialized workers to find work in the general economy especially if their industry is cutting jobs across the board. This means many of those workers experiencing job losses at airlines will find themselves unable to find new work (at decent wages), pay their debts, mortgages and may be forced to file bankruptcy or face foreclosure. If you’re an employee in a specialized field and fear your job may be at risk, make an effort to diversify your skill set.

Changes in the bankruptcy law in 2005 made it a lot tougher for individual debtors to file multiple bankruptcies. For a Chapter 7 bankruptcy a debtor can only file once every 8 years; before 2005 it was every 6 years. But a debtor can file a Chapter 13 bankruptcy four years after filing a Chapter 7 bankruptcy. For example, if a debtor filed Chapter 7 in 2006, they would not be allowed to file for Chapter 7 again until 2014; but the debtor could file for a Chapter 13 bankruptcy in 2010.

If the debtor filing for Chapter 13 bankruptcy, as described above, fails to maintain the payments, he or she will not be allowed to convert that Chapter 13 into a Chapter 7 bankruptcy after that case was filed. The time period for when a debtor is eligible to file bankruptcy again is counted from the day of bankruptcy filing, not the date of discharge. For example, if a debtor filed Chapter 7 bankruptcy in 2006; but the bankruptcy case was discharged in 2008, the debtor would be allowed to file Chapter 7 bankruptcy again in 2014.

If you filed bankruptcy a few years ago and find yourself swamped with debt again, contact a bankruptcy attorney today to find out your bankruptcy options.

When filing bankruptcy, debtors have the right to claim certain assets as exempt from seizure by creditors. Although bankruptcy law does not allow transfers of assets designed to “hinder, delay or defraud” creditors, it does allow debtors to plan for bankruptcy exemptions. For example, a debtor considering bankruptcy is allowed to plan for the homestead exemption and might be allowed to use non-exempt property to pay down a home mortgage before filing for bankruptcy under certain circumstances. A debtor might also be allowed to transfer non-exempt assets to other exempt assets such as a retirement account or a child’s college fund. It is important to emphasize that all exemption planning must be done without any intention to “hinder, delay or defraud” creditors.

Often, debtors unknowingly “giveaway” too much of their assets to creditors without protecting the financial stability of their family. Failing to save for retirement, pay healthcare or maintain a home for your family because you are trying to repay debt is not something that the bankruptcy court expects you to do. Bankruptcy is designed to give debtors a fresh start, not put them deeper into the hole by taking all or most of their assets.

If you’re considering bankruptcy and want to protect your family’s assets by increasing the amount of your exempt assets talk to a bankruptcy attorney today.

An automatic stay, which generally becomes effective once a bankruptcy is filed, stops all collection actions against the debtor. But the automatic stay will end once one of the following events occur:

1. The bankruptcy case is closed in a Chapter 13 case. For example, if a debtor withdraws a bankruptcy petition then the case would be closed and the automatic stay would be lifted and collection actions against the debtor would begin again. The bankruptcy case could be closed by the court or trustee.
2. The bankruptcy case is dismissed. For example, the bankruptcy court has determined that the debtor is not eligible to file bankruptcy and dismisses the case. In this case also, the automatic stay is lifted and debt collection actions would resume.
3. The debtor is granted or denied a bankruptcy discharge in a Chapter 7 case. If the debtor is granted a bankruptcy discharge, then those debts that were not dischargeable would probably be placed back into collections (i.e. student loans, child support). If the bankruptcy is denied, the automatic stay is lifted and all creditors would resume collections against the debtor.

On Tuesday, interest rates dropped to their lowest point since the early 1960s. In an effort to shock the sluggish economy out of its slumber, the Federal Reserve cut the federal funds rate from 1 percent to a target range of zero to 0.25 percent. Many homeowners, especially those facing imminent foreclosure are rushing to refinance with at these basement bargain interest rates. With the new rates, homeowners can now find a 30-year, fixed mortgage rate at about 5.06 percent.

This is great news for homeowners who are in toxic loans and who want to find a more affordable rate for their mortgage. But unfortunately it may not help homeowners already experience foreclosure because many creditors are still only lending to debtors with stellar credit records. If a homeowner is already facing foreclosure, their credit score has probably taken a serious beating. Missing mortgage payments and other debt obligations will bring down your credit score and scare many lenders away in today’s cautious lending environment. But for those homeowners who are not facing foreclosure and have remained current with debt payments, taking advantage of these new, low rates may be the best long-term financial decision they could make.

Many debtors considering bankruptcy fail to file their taxes which can have huge financial implications as well as a negative impact on any future bankruptcy. Here’s why…when a debtor files a tax return, even if they don’t pay, the clock starts on two very important time periods that impact bankruptcy. The first important time period for taxes in bankruptcy is the three year period in which the IRS is allowed to assess more taxes for that year’s tax return. This can potentially reduce tax debt owed in any future Chapter 13 bankruptcy. The second important time period for taxes is the 10 year time period where the IRS can pursue collection on a tax debt. That’s right, the IRS cannot try to collect tax debt on a tax return that was filed more than 10 years ago. This also reduces tax debt in any future bankruptcy. But that’s not all, if you want to discharge taxes in bankruptcy, you can only do so on tax returns that were a) filed on time, b) filed within the granted extension time or c) filed two years before you declare bankruptcy.

Many debtors find themselves unable to discharge burdensome tax debt in bankruptcy simply because they did not file under the prescribed rules. Don’t let that happen to you. Even if you cannot pay, you must file your taxes, doing so increases your chances of discharging them in bankruptcy.

When debtors file for bankruptcy many don’t realize that the bankruptcy trustee may request a copy of the debtor’s bank statements covering the previous 60 days before they filed for bankruptcy. This is where your bank statements may actually jeopardize your bankruptcy case. Before filing bankruptcy many debtors have been completely careless with their spending and their bank statements often reveal that they not only did not make a good faith effort to pay their debts; but they are also spendthrifts.

For example, prior to filing bankruptcy some debtors pay for dinner at expensive restaurants, buy expensive designer clothes, purchase pricey spa treatments, shop at gourmet grocery stores and stock up on other non-essential items all paid with their debit card, within the 60 days prior to filing bankruptcy.

Buying expensive, non-essential items with your debit card before filing bankruptcy leaves a paper trail that may lead the bankruptcy court to dismiss your case. If you’re planning to file for bankruptcy and have a habit of purchasing expensive, non-essential items on your debit card, you need to stop BEFORE you file bankruptcy. If you suspect that your bank statements may jeopardize your bankruptcy case, speak with a bankruptcy attorney about what you can do to decrease the chances of your bankruptcy case being dismissed.

According to CNN, the federal government announced a $13.4 billion bailout for automakers General Motors and Chrysler.

“Allowing the U.S. auto industry to collapse is not a responsible course of action,” President Bush said. The automaker loans are designed to stabilize General Motors and Chrysler until March 2009.

“If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury,” the statement says.

Is this realistically enough time for these automakers to stabilize their companies and avoid bankruptcy? Almost everyone agrees that the problems that the automakers are facing are systemic and not easily or quickly solved. What about Ford? Is that the one automaker that will be sacrificed to the bankruptcy Gods?

I’ve got a sneaky suspicion that this automaker bailout won’t be enough to stop massive disruptions and potentially
bankruptcy from affecting the auto industry.

According to the Texas Tax Code, homeowners over the age of 65, disabled persons, and the surviving spouse (55 years old or older) of a person previously entitled to a property tax deferment may be able to defer the payment of property taxes. Persons eligible for tax deferment may be entitled to defer payment of their property taxes as long as they own or live in the property. The unpaid property taxes would accrue interest and the deferred taxed would become due within 181 days after the those residing in the property are no longer eligible for the tax deferment.

For example, if you’re 66 years old, live in a high tax area and can’t afford your property taxes you could possibly defer those taxes until you sell your home or until you no longer lived in the property.

With seniors facing a devaluation of their retirement funds and many more barely escaping foreclosure and/or bankruptcy, property tax deferment can be a powerful tool in putting yourself on stable financial footing. Property taxes can be a huge financial burden and many homeowners are forced into foreclosure and/or bankruptcy simply because they cannot pay their property taxes. Speak with a tax professional about how you can use this tax law for your benefit. If you are already delinquent in paying your property taxes, speak with a bankruptcy attorney about how you may be able to discharge delinquent property taxes or create a repayment plan through bankruptcy.

Anyone who has taken out student loans for college and experienced financially trying times knows that student loans cannot be discharged in bankruptcy unless they cause an “undue hardship” to the debtor, which means rarely. But what about unpaid tuition, can unpaid tuition be discharged in bankruptcy? Well under normal circumstances, yes tuition can be discharged in bankruptcy. Let’s take a look.

If a debtor goes to school and simply fails to pay tuition, then mostly likely the debt can be discharged in bankruptcy. For example, if the school allowed a student to attend classes and not pay at all and then later attempted to collect the money, this type of tuition debt may be discharged in bankruptcy. But, if a student signs a promissory note with a school or the school gives the student money, this debt may not be dischargeable in bankruptcy. In this case the bankruptcy courts consider the debt a “student loan.”

If you’re considering bankruptcy and have unpaid tuition debt, speak to a bankruptcy attorney to determine if this debt is dischargeable in bankruptcy.

The Dallas Morning News reports that many homeowners who are otherwise financially healthy are finding themselves in a nasty financial predicament that may lead to foreclosure. Their life circumstances have changed and they need to quickly sell their home and downgrade to something more affordable or move to another city for a job. But as we all know many homeowners are facing foreclosure because of the slumping real estate market which makes finding a home buyer kind of like finding a needle in a haystack. But many homeowners aren’t just waiting around for the foreclosure axe to fall; they’re swapping their homes with others.

How House Swapping Works

Two “buyers” basically purchase each other’s homes on the same day. They each bring their own financing and pay off the other homeowner’s mortgage completely. This arrangement may benefit those who have decent credit; but are on the verge of a
foreclosure because a) their mortgage is about to reset b) the mortgage has already reset or c) the need to sell their home because they must move for a job or other necessity. In these cases house swapping could help a homeowner with decent credit avoid a foreclosure by finding someone to swap homes with.

For those whose credit is less than stellar, house swapping may not be ideal because of the increasingly stringent requirements for getting loans. If your credit is sub par and you are facing an inevitable foreclosure because you can no longer afford your home; but can’t sell it because of the housing market, speak with a bankruptcy attorney about your bankruptcy options.

If you’re in a Chapter 13 bankruptcy repayment plan, don’t forget to carefully examine your bankruptcy payments for tax deductions. Depending on what is being repaid by the trustee in your Chapter 13 bankruptcy, you may be entitled to deduct some payments from your 2008 taxes. For the purpose of your taxes, payments made by your Bankruptcy trustee will be treated as if you made them yourself. After all, it is you who is paying; but of course through the bankruptcy trustee, so you still have a right to claim those tax deductions you would normally take if you weren’t in bankruptcy. For example, if you’re paying mortgage interest in Chapter 13 bankruptcy and/or defaulted mortgage payments, those payments may be deductible from your 2008 taxes. If you’re paying federal or state taxes, spousal support or business debts/expenses through the Chapter 13 bankruptcy this may also be deductible from your 2008 taxes. Speak with your bankruptcy attorney and tax accountant to find out what tax deductions may be available to you during Chapter 13 bankruptcy.

This is another case of waiting until the last moment to file a bankruptcy which was inevitable. Many debtors who get sued by their creditors, never respond to the summons, receive a default judgment and within a few days, weeks or even months, their bank account is emptied or their wages are garnished. That’s when they come to file bankruptcy and want to know if they can get their money back. Well, the answer to that particular bankruptcy question is maybe yes; but it’s going to take a little time.

If your bank account or wages are garnished and you file for bankruptcy within 90 days, you might be able to get that money back within 3 months; but only if the money is considered exempt under bankruptcy law. For example, social security payments or child support payments are just a few types of income that are exempt from seizure by creditors in a bankruptcy.

If you are considering filing for bankruptcy and are currently experiencing wage or bank account garnishments, do not delay. There is a small window of opportunity to act and possibly retrieve money taken by creditors through garnishments.

According to a report released by the Administrative Office of the U.S. Courts, bankruptcy filings rose 30% in 2008. An additional 241,724 bankruptcy filings were received by the court as of September 2008. From Oct. 1, 2007 to Sept. 30, 2008 over 1 million bankruptcies were filed in the United States. That’s a dramatic increase in personal bankruptcies which clearly reflect the very real economic challenges faced by ordinary citizens who are finding it impossible to remain afloat financially. Many of these bankruptcy filers are facing major financial hardships for the first time in their lives as the rug is being pulled out from under even the most financially responsibly families. They didn’t file bankruptcy because they wanted to get away with not paying their debts; they simply took an honest assessment of their financial position and the current economy and made a wise decision to cut their losses before it’s too late.

There is another dynamic taking place that we don’t hear about in the news, many creditors are becoming more aggressive as they experience record defaults on both secured and unsecured debts. These aggressive collection practices are forcing many debtors to file bankruptcy who under ordinary circumstances would try to wait until their financial circumstances changed in the hopes that they could eventually repay their debts. With all of these factors in play, bankruptcy filings are set to increase even more and even faster as debtors try to save what little assets they have remaining.

So far this year, Dallas-Fort Worth has experienced 1,918 commercial property foreclosures which include retail centers, retail buildings, office buildings, industrial buildings, apartment complexes and unimproved commercial land. Of those commercial property foreclosures 18% were apartment buildings. Dallas-Fort Worth experienced a 35 percent spike in the amount of apartment buildings in foreclosures. In 2007, 257 apartment buildings suffered foreclosure, while 347 apartment communities faced foreclosure in 2008.

When we talk about foreclosures and families facing eviction from their homes, we rarely hear about ordinary renters who pay their rent on time; but face eviction because of the property owner’s foreclosure. These numbers are going to get higher as those who refinanced apartment building mortgages find themselves stuck with toxic loans and fighting foreclosure. Renters need to check the status of any property they are currently living in or plan to rent in the future. Foreclosures are public record, so there is no reason not to at least check. Many renters have unknowingly paid rent to foreclosed owners even after the homes have become bank owned. Don’t let that happen to you. Go to the County Recorder’s Office and using the property owner’s full name and address, check and see if the property is in foreclosure before you hand over your money.

An article on MSNBC asked some probing questions about the viability of an automaker bailout and the ramifications of an automaker bankruptcy. Greg Chaney, Manager of Chacon Autos, the Dallas-based owner of eight automotive dealerships adds his two cents:

“…if there is to be a bailout, I think there should certainly be strings attached, as the status quo is not working. They must present some sort of business plan to a board created by the government prior to any money being lent. We should limit what the money could be used for. It should not be used for increased dividends, executive bonuses, stock buy-backs, and only used to acquire another company if approved by the board. I think a heavy emphasis should be put on new alternate fuel vehicles or high fuel efficiency vehicles. And they should improve the quality of their fleet of passenger cars.”

Chaney has a good point; we need to set limits with these automakers facing bankruptcy before we handout any money. As far as limiting how any bailout money could be used, there’s nothing worse than giving a bailout to companies who insist on continuing their lavish lifestyles at the expense of the taxpayers. Any government bailout should come with deep cuts at the very top, i.e. executive salaries and company stock payouts. But there’s one point that needs to be clear regarding a bailout and the automakers’ ability to avoid bankruptcy…they need to make sure that the money is invested in technology that will make them competitive in the global market and create a business model that is sustainable.

Another point that Chaney made about the fall out of an automaker bankruptcy was very telling:

“We would most likely see much less of a demand for their vehicles. We would be wary of selling or buying any vehicles from that manufacturer, and we would most likely shift much of our inventory to the more stable companies and to the imports.”

In other words, dealerships would begin selling more foreign cars. The only problem with that is that those Americans working for US automakers in bankruptcy would eventually lose their jobs because of decreased sales and profits, further weakening the US economy. That’s something to think about.

(source: http://www.msnbc.msn.com/id/28238392/)

Representative Linda Sánchez introduced House Bill 3707 that would eliminate a ban on modifying residential home mortgages in Chapter 13 bankruptcy. Currently, the law for Chapter 13 bankruptcy allows modification of nearly any type of loan with the exception of a residential home mortgage. Under the proposed bill, homeowners may be allowed, with the supervision of the bankruptcy court and bankruptcy trustee, to modify their home mortgage in Chapter 13 bankruptcy. The debtor would be required to repay through Chapter 13 bankruptcy, the actual value of the home and interest rates deemed “predatory” could be modified to reflect true market value. Under the proposed changes to the bankruptcy law, the lenders would have the right to add extra interest as a cushion to protect them from possible future default.

This is the type of bankruptcy reform that is needed by struggling Americans. With the subprime fiasco, foreclosure crisis and the credit crunch, debtors need as many viable options as possible so that they can eliminate debt quickly and get back on their feet. Hopefully, our legislators will have enough foresight to give this bankruptcy reform law serious consideration.

Retirement funds are taking a real beating and that’s just a fact. But many seniors can’t catch a break because they’re required to withdraw a certain amount of money from their retirement fund every year if they are 70 1/2 years old or older. The Worker, Retiree and Employer Recovery Act if approved by President Bush, will temporarily waive the stiff penalty imposed on seniors who fail to withdraw a prescribed minimum from their retirement accounts. Normally, if a senior citizen fails to withdraw the required amount from their retirement account, there is a 50% tax on the amount that should have been withdrawn, plus any income tax that would have been owed if the money had properly been withdrawn. If this bill is passed, seniors who don’t withdraw their required distribution will not suffer from the penalty.

Unfortunately, most senior citizens have already withdrawn their required distributions from their retirement accounts for 2008 or are suffering from the penalty because they failed to withdraw their money. But it is good to see Congress taking steps to protect seniors who are especially vulnerable at this time to the fluctuations in the market that are gnawing away at everyone’s retirement funds.

Some members of Congress are urging the Federal Housing Financing Agency (FHFA) to quickly implement reforms made to protect renters’ rights during a foreclosure. As part of the $700 billion Emergency Economic Stabilization Act, which was passed in October, Fannie Mae and Freddie Mac (and other government entities) are required to allow renters living in foreclosed properties to remain in their homes until their leases end as long as they continue to pay their rent. But according to housing activists, Fannie Mae and Freddie Mac have not been adhering to this rule regarding foreclosures and renters, and are evicting renters in violation of the new policy. Freddie Mac and Fannie Mae deny this accusation.

This bailout was designed to help all those people affected by the crisis, including renters living in foreclosed properties. The fact that Freddie Mac and Fannie Mae are allegedly evicting renters in foreclosed properties is a travesty and a slap in the face of taxpayers. Dallas-Fort Worth needs to make sure that renters living in foreclosed properties owned by Freddie Mac or Fannie Mae are allowed to remain in these foreclosed properties according to the law. There needs to be stiff penalties for illegally evicting renters living in foreclosed properties and systems in place that give renters the power to fight evictions caused by foreclosure.

Another sign of the times for the American worker–American Airlines contract negotiations with the union representing ground workers has come to a standstill. American Airlines has not been able to come to an agreement with the union representing over 12,000 bag handlers, instructors, simulator technicians, and storage clerks this past week. Because of several days of failed contract negotiations the union has requested that a federal mediator step into the contract talks.

As job losses rise and the amount of unemployed workers searching for jobs increases, many companies are feeling less pressure to bow to the demands of unionized workers. Many “ordinary” workers aren’t too concerned about this phenomenon; but this dynamic could spell trouble for those Americans who have experienced job losses and even for those who are fully employed. Unions help negotiate decent pay for labor, even unskilled workers and are important to insuring that wages remain high for all workers. Now, that the economy is shaky and many Americans fear job losses, companies may attempt to suppress or even decrease wages, tightening the already limited budget of the American worker. Keep an eye on union contract negotiations; they are an indicator of how much leverage the non-union worker will have as job losses continue to increase and the economy cycles through this recession.

According to an article in the Dallas Morning News, many small banking institutions are unable to access the government’s $700 billion bailout fund. When the bailout fund was initially opened, it was publicly traded banks that had access to it. But now, nearly two months later, smaller banks are suppose to have access to the fund; but the necessary guidelines for access have not been released to the 3000 private banks, mostly partnerships.

Without access to the bailout funds many smaller banking institutions are at a competitive disadvantage during this credit and foreclosure crisis. While the big banks shore up their balance statements with government issued loans, the smaller banks must absorb the full shock of losses from the credit and foreclosure crisis. This is something that many suspected would happen when this bailout was first created–the big guys getting rescued while the little man languishes. Many Americans bank at small institutions and these small banking institutions are being affected by the credit and foreclosure crisis and they have a right to access these bailout funds. The government should create a quota system that will insure that the smaller banks get their fair share of the $700 billion bailout fund immediately.

Liability car insurance is suppose to cover an “at fault driver” in the case of a car accident. But what happens when one party sues another for an amount that is above and beyond the coverage provided by the car insurance company. For example, what if you are sued for $1 million dollars in car accident lawsuit? Well, most times the insurance company will settle with the plaintiff in the lawsuit for an amount well below what they are asking for; but there are other times when the plaintiff goes after the personal assets of the driver who caused the car accident. Can bankruptcy protect this driver being sued because of the car accident? Well, bankruptcy may be an option to protect this “at fault driver” but it depends on a few factors. The first factor is the cause of the car accident. If the “at fault driver” had a car accident because they were under the influence of drugs or alcohol, the debt cannot be discharged in bankruptcy. If the “at fault driver” willfully or maliciously caused the car accident, then the debt cannot be discharged in bankruptcy. If on the other, the car accident was not cause by a DUI and was not malicious or willful, the debt might be dischargeable in bankruptcy. If you are facing a personal lawsuit for a car accident, speak with a bankruptcy attorney before you go to trial to find out what bankruptcy options may be available to you.

Although America rid itself of debtors’ prisons long ago, there are still stiff penalties for intentionally providing false or misleading financial information to the bankruptcy court. Debtors can be sentenced to up to 5 years in jail and fined up to $250,000 for providing false or misleading financial information to the bankruptcy court.

For example, if you file Chapter 13 bankruptcy and fail to disclose that you earn an additional $300 a month this would obviously cause your monthly repayment plan to be lower. But this “little white lie” could possibly send you to jail. Even if financial lies are “discovered” after your bankruptcy case has been discharged you could still face criminal prosecution for lying to the bankruptcy court. It is important that you disclose all financial information to your bankruptcy attorney, including cash income, property/asset transfers, real estate and other assets and income no matter how insignificant they may appear. If you are in the middle of a bankruptcy and “discover” that you have more assets, notify your bankruptcy attorney immediately. Saving a few dollars in bankruptcy is not worth spending 5 years in jail. Many debtors have already been successfully prosecuted for lying about their financial assets during bankruptcy, don’t become one of them.

The Dallas Morning News reports that Bank of America Corp. announced on Thursday that it will shed 30,000 to 35,000 jobs over the next three years as it struggles to absorb the financially battered Merrill Lynch & Co. Although the final and exact number of job losses at Bank of America won’t be known until early 2009, the job losses are expected to affect employees throughout the company.

Citigroup has also experienced job losses this year, sending 75,000 workers to the unemployment line, that’s 20% of its workforce. JPMorgan Chase & Co. is joining the club of banks experiencing job losses by cutting some 7,000 employees in its investment bank and slashing 9,200 jobs at Washington Mutual Inc.

Why are these banks cutting jobs so drastically? Well, the credit business has simply dried up and they aren’t expecting their customers to comeback anytime soon. They see the “recession” handwriting on the wall and they’re digging in for the long run. These banks are cutting their losses, reducing their expenses (employees) and getting very picky about who they do business with (the debtors). In this economic environment, individuals need to follow their lead.

The Star Telegram reports that Overton Centre office complex is facing foreclosure after GE Business Financial Services demanded payment of the $25.3 million mortgage on the property. Despite timely payments by the ownership group for the life of the loan, the multi-million dollar loan is still being called and the group is finding it difficult to refinance. Up until now, commercial foreclosures have been limited to underperforming buildings in poorer areas of the city; but currently many upper-scale commercial buildings are finding it hard to refinance and are being foreclosed on.

Although most individuals filing bankruptcy don’t worry about the state of commercial property or their foreclosures, this type of issue has a ripple affect in the bigger economy. Foreclosed properties become a serious problem in urban areas, causing blight and closure of businesses that depend on these commercial properties for customers. The foreclosure of the Overton Centre office complex is just another sign of the times. Unfortunately, we will see more of these types of foreclosures hitting the Dallas-Fort Worth area in the near future.

The Senate did not pass a $15 billion rescue plan for Automakers this past week and the White House is now considering allocating some the Wall Street bailout funds to shore up the U.S. auto industry, which according to many analysts is on the verge of bankruptcy. Currently approximately $15 billion of the Wall Street bailout fund is not committed to anyone; but to dip into this fund for automakers, the White House administration would be required to notify Congress of its intentions. Congress has the power to block usage of the Wall Street bailout fund and/or to put special conditions on how the money can be used to help the faltering auto industry.

The auto industry is very vocal about their precarious financial position, declaring that they may have only a few weeks before they run out of money and go bankrupt. Any type of collapse or bankruptcy of even one of these big automakers could spell disaster for America’s economy. The major automakers employ almost 25 million workers and it is estimated that more that 3 million Americans would be out of work if even one of automakers declared bankruptcy.

As we have noted often on this blog, many debtors wait to the absolute last moment to file for bankruptcy. Many debtors who should have filed bankruptcy years ago find themselves facing garnished wages, seized bank accounts, repossessed cars and even home foreclosures. But even if a debtor waits until the very last minute to file bankruptcy, the bankruptcy laws allow the debtor to start a bankruptcy case by filing only the 3 page petition with a list of creditors (even if the list is incomplete).

This is a very quick process; we’re talking a few days at the most. Once this 3 page petition is filed, it will stop aggressive collection action against a debtor immediately. The bankruptcy law allows the debtor to file the remaining forms and schedules within 15 days after filing the bankruptcy petition. In some cases the bankruptcy court may even extend the 15 day deadline if it deems it reasonable and necessary.

Do not try to file the bankruptcy petition yourself, because if it is done incorrectly your bankruptcy petition could be dismissed. Speak with a bankruptcy attorney immediately regarding an emergency bankruptcy filing to stop pending foreclosures, wage garnishments and other aggressive collection practices.

It’s Christmas time again and many Dallas-Fort Worth residents find themselves financially stretched. Buying gifts for family and friends can often completely deplete bank accounts, credit cards and even the kid’s piggy banks. Unfortunately for many, when January 1st rolls around, they still have the mortgage/rent to pay and other necessities, often forgotten while wrapped up in the spirit of giving. That leads many to take out the dreaded “payday loan” just to make ends meet. We’ve talked about this dangerous form or debt before; but Chrismas time makes many very vulnerable to falling into the payday loan trap, so we’re going to talk about it again.

Payday loans are the quickest road to financial disaster, just in case you were wondering. Many people who take out payday loans end up paying astronomical amounts in fees, such as paying $800 on a $300 loan and that is not an exaggeration. According to a study released by Vanderbilt Law School, over 10 million Americans borrow money using payday loans annually and I’m sure many of those people start borrowing right around Chrismas time. The study also said that customers approved for payday loans are more likely to file for bankruptcy than those who were denied payday loans. That’s right, the people who were denied a payday loan were more likely to avoid bankruptcy.

If you want to avoid becoming a payday loan victim this holiday season, pay for want you need first and limit the amount of gift giving this year if your budget can’t accommodate it. If you have taken out payday loans and find yourself in a financial hole you can’t dig out of, please note that payday loans can be discharged in bankruptcy.

Around the country, state and local legislators are considering foreclosure moratoriums for homeowners facing foreclosure. We all know that homeowners facing foreclosure need more time than they’ve been given to put their financial house in order and save their homes; but that’s not all they need. Oftentimes foreclosure moratoriums end up only delaying the inevitable foreclosure because once given more time many homeowners don’t have the information or tools necessary to take the critical steps needed to save their homes.

When a state or local government issues a foreclosure moratorium, there should be a plan already in place to help vulnerable homeowners act quickly to save their homes. The first step in the plan should be providing every homeowner with information about their options. The legislative bodies issuing the foreclosure moratorium should have that information disseminated through the mortgage companies as part of the homeowner’s monthly bill/statement.

The second part of the plan should be to evaluate each homeowner facing foreclosure to figure out which option is best for their situation. If someone is only slightly behind in their mortgage payments, has a steady income, very little debt, and is only having trouble because of a toxic mortgage, issuing a new and affordable loan for this homeowner may be the best option. On the other hand, if a homeowner has little or no income, is severely delinquent in paying their mortgage and has large amounts of other debt, bankruptcy may be their best option. Whatever option homeowners facing foreclosure chose, it is important that they know all of their options and are given enough time to take action.

As more Texas homeowners face foreclosure many are falling victim to a variety of foreclosure scams. These foreclosure scams offer big promises and deliver very little while siphoning off homeowners’ limited resources. To strengthen laws designed to protect homeowners from foreclosure scams, Attorney General Greg Abbott and Senator Craig Estes are proposing a new law called the “Foreclosure Rescue Fraud Prevention Act.” This law would require that “foreclosure prevention consultants” provide customers with a written contract detailing the services they will provide to prevent foreclosure. The law would also require a written disclosure statement advising customers to contact an attorney or housing counselor before signing mortgage rescue agreements. If the law is violated by “foreclosure prevention consultants,” prosecutors could obtain civil penalties under the state’s deceptive trade practices act.

This legislation is badly needed in the Dallas-Fort Worth area as many homeowners facing foreclosure find themselves vulnerable to the empty promises of “foreclosure rescue companies.” Many homeowners facing foreclosure expend lots of money trying to save their homes using these scams. This type of legislation which hold “foreclosure rescue companies” accountable is long overdue.

Workers laid off by the closure the Republic Doors and Windows plant in Illinois have been staging a sit-in since the company laid them off with only three days notice. The 200 unemployed workers said they were entitled to 60 days notice according to their union contract. After negotiations and plenty of bad publicity, Bank of America has offered to loan money to the now defunct Republic Doors and Windows so that they can pay the laid off workers severance and holiday pay. Republic Doors and Windows said that they wanted to give the workers more notice including pay; but Bank of America refused to allow them to spend any more money and abruptly cut off their line of credit. The loans still have not been finalized and the unemployed workers have refused to vacate the plant until the loans are officially approved.

Because of this tumultuous economy, we need to immediately put in place in Dallas-Fort Worth laws that will prevent this from happening here to unemployed workers. Three days notice is not enough for people to make plans for how they are going to pay their mortgage, utilities, buy food and care for their children. There needs to be some type of safeguard that will protect workers and our communities from this type of abrupt action by companies.

To read the original article click here.

To decrease the chances of trouble when filing for bankruptcy, make sure you list and properly notify all of your creditors. That includes creditors that may not show up on your credit report, such as landlords (in the case of renting), personal loans from friends and family and other debts that aren’t normally listed on the credit report.

Although a bankruptcy may, in certain circumstances, discharge an unlisted debt, if the creditor was not properly notified or the debt was unlisted, there may be a limit to the amount a debtor can recover if there is a stay violation by the unlisted/improperly notified creditor. A stay violation occurs when a creditor takes some kind of action which is specifically prohibited by the Bankruptcy Code after a bankruptcy case has been filed on behalf of the debtor. For example, if a creditor garnished a debtor’s wages or seized a bank account during a bankruptcy, the debtor can recover damages. But if the creditor was not properly notified of the bankruptcy, the debtor may not be able to receive the full amount in damages.

Under the bankruptcy law reform in 2005, creditors can request that bankruptcy notices be sent to a specific address. This special bankruptcy address is usually listed by each creditor on the debtor’s credit report. Debtors must send all correspondence regarding the bankruptcy to this special address designated for bankruptcy by creditors.

As more Americans face decreased income due to job loss, business closure or decreased access to credit, some of the simple, yet critical, things in life are now in jeopardy–simple things such as utilities. Many Dallas-Fort Worth residents who can’t afford to pay for lights, gas or even hot water face shutoff of their utilities. The most vulnerable citizens in Dallas-Fort Worth to utility shutoffs include senior citizens, the poor and families with young children.

If you are facing a utility shutoff, filing for bankruptcy will prevent the utility company from disconnecting your service. Of course you don’t want to file bankruptcy only because you are behind $300 on your utility bill; but most people facing utility disconnection are also struggling with their mortgage payments, credit card bills, and other debts. Utility disconnection is usually a chronic symptom of greater financial troubles that might be best handled in bankruptcy.

How It Works

Once your utility shutoff is stopped by filing bankruptcy you will be responsible for paying all utility bills you incur after your bankruptcy filing date. But the bills you owed before filing bankruptcy will be discharged in a Chapter 7 bankruptcy or included in your repayment plan in a Chapter 13 bankruptcy . Many utility companies will require bankrupt debtors to place a deposit with them to continue the utility service with their company; but usually will give the debtor 20 days to come up with the deposit. If the deposit is not paid, the utility service will be disconnected.

The Mortgage Bankers Association released a report stating that 11.5 percent of subprime loans in Texas were in foreclosure or facing imminent foreclosure. The foreclosure rate was only 9 percent last year. Many of these subprime homeowners have adjustable-rate mortgages with interest rates that have reset to unaffordable levels. One of those borrowers, a 78-year-old veteran featured in the Dallas Morning News, is facing foreclosure after seeing his mortgage payments double. Like so many other seniors caught in the web of this subprime mess, he first ran into trouble when he accumulated over $3000 in medical debt and just could no longer pay all his bills. Although his mortgage servicer will try to help him avoid foreclosure, he has less than a month before his home is sold from under him. This senior citizen facing foreclosure lives on disability and has extremely limited income.

The 78-year-old veteran facing foreclosure is the perfect candidate for bankruptcy. It is highly unlikely that he can renegotiate that subprime loan in time to save his home from foreclosure; but bankruptcy can be filed immediately to buy him more time. This is the type of information that mortgage companies should be required to tell homeowners facing foreclosure.

Despite mortgage companies efforts to streamline and speed-up programs designed to avert foreclosure, Texas homeowners are quickly running out of time due to the state’s fast-track foreclosure process. In other states, foreclosure can take as long as four months; but Texas’ foreclosure process can take as little as 41 days to complete. That’s the quickest foreclosure process in the country. Current foreclosure laws in Texas only give homeowners 20 days to pay off the default balance of their mortgage and avert foreclosure. The state Attorney General Gregg Abbott plans to introduce legislation next week that could double the amount of time given to homeowners facing foreclosure. If the new legislation is approved it would give homeowners 45 days to fix their mortgage problems and avoid foreclosure.

The short amount of time given to homeowners facing foreclosure is probably the main reason Dallas-Fort Worth has one of the highest foreclosure rates in the country. The bottom-line is that 20 days is not enough time to fix a foreclosure issue, especially when trying to renegotiate the terms of a subprime mortgage. By the time many homeowners have received new loans, the foreclosure process has already started.

On Monday, Tribune Co. filed Chapter 11 bankruptcy, giving the nearly insolvent newspaper and television station owner time to find buyers for some of its troubled properties. Tribune Co. which owns 10 daily newspapers, 23 TV stations and has 20,000 employees has been financially devastated by a crushing $13 billion debt and reduced advertising revenue. Many of their top employees, fearing job losses have already fled the debt troubled company. But those who were laid off and still depend on Tribune Co. financially are in for a rude awakening. With the Chapter 11 bankruptcy, Tribune Co. has already stopped severance payments, deferred compensation and other payments to former employees. These former employees will have to file a claim with the Chapter 11 bankruptcy court to receive payment. Tribune Co. is also expecting more job losses in the near future as they struggle to stay afloat.

This is another example of how bankrupt companies can have a domino effect throughout the economy. Tribune Co. is huge; with 20,000 workers everyone will feel the effects of this bankruptcy. Their former employees who now have no income will most likely need to consider bankruptcy themselves. If you’re working for a company that has filed bankruptcy, you need to consider all of your options including personal bankruptcy before you get your pink slip. You may not lose your job; but you need to be prepared just in case.

According to an article in the Dallas Morning News, sales of pre-owned homes in the Dallas-Fort Worth area dropped 33 percent in November as consumers held back due to worries about job losses, debt and the general instability of the economy. Only 4,146 pre-owned homes were sold in November, the lowest monthly sales total in five years. Sales of condominiums were even worse with sales dropping 44 percent in November. Currently it is taking an average of 80 days to sale a home in the Dallas- Fort Worth area.

The sad fact is that many consumers are saddled with so much debt and fear of losing their jobs, many are very cautious about taking the plunge of homeownership. A lot of the previous boom in housing was fueled by homeowners "trading up" for newer homes; but many of those homeowners are now barely paying their debts and staving off foreclosure themselves. The biggest worry is that many of these homes sitting on the market for 80 days or more will end up in foreclosure. Most people who don’t need to sell their home are waiting out the crisis. But many of those trying to sell homes now are doing it because they can’t afford the debt and need to sell their home. Many homeowners are nearly drowning in debt, experiencing a job loss or trying to avoid foreclosure. Unfortunately, these numbers will most likely get worst.

According to an article in the Dallas Morning News, the cost of gasoline and heating has declined significantly, that’s good news for families facing mounting debt. The EIA report, featured in the article, predicted that the average cost of gasoline could decline to as little as $2.03 per gallon by this time next year. The price of gas and diesel has already fallen by $2 a gallon since July. This week the average price for gasoline was $1.70 and the EIA report projects that energy for heating this winter will be one-fourth of last year’s prices. Families who use natural gas will probably pay on average about $860 for heat this winter compared to the $1,570 paid by the average family last year.

This is great news for families who have been hit with job losses, reduced income and rising debt. Seniors will especially benefit because many are suffering financially with retirement funds that aren’t producing anywhere near the income they expected to receive. That means many have been unable to pay debts and basic living expenses, making this decline in energy costs a much needed relief.

Did you know that Dallas-Fort Worth has an old car replacement program that gives $3,000 vouchers to residents who turn in an old car and purchase a new one? Cars need to be at least 10 years old and the voucher must be used to purchase a new car. That’s right, they want Dallas residents to get rid of their old; but fully paid for clunkers and get a new car loan. Not only that; but the vouchers are only available to low-income and moderate income residents. The residents who can least afford any new debt. But according to an article in the Dallas Morning News, "surprisingly" participation in the old car replacement program has dropped by 40 percent.

Am I missing something here? Aren’t we in the middle of a recession caused by too much debt? What government entity would encourage its citizens to go out and take on new car loans, more debt, when companies are closing, going bankrupt and former employees are finding it nearly impossible to find new jobs? People are in debt up to their eyebrows and many are facing foreclosure. They don’t need new cars and they definitely don’t nee more debt. This program was originally designed to help Dallas-Fort Worth meet clean-air standards; but wouldn’t it be wiser to give vouchers for citizens to take public transportation?

It’s in the news almost daily; companies going bankrupt or closing their doors leave thousands jobless. But what we don’t hear about is the massive amount of medical debt many former employees are saddled with. When a company announces that they are going bankrupt or closing, many employees rush out to get much needed medical care such as, check ups, medication and operations; but many end up with huge medical debts. Why? Because often when a company notifies its employees that they are going bankrupt or closing they have already stopped paying into medical insurance and the employees are no longer insured.

If your employer announces that they are going bankrupt or closing check with human resources to see if you are still covered under the medical insurance plan before you go out and rack up unexpected medical debt. It’s also important to know that when a company files for bankruptcy or closes its doors, former employees may not be eligible for COBRA especially if the company is being completely liquidated through bankruptcy and not restructuring debt in bankruptcy.

If you have inadvertently accumulated thousands of dollars in medical debt because your employer went bankrupt or closed its doors, speak with a bankruptcy attorney about your personal bankruptcy options.

A deal is in the works that could possibly put between $14 billion and $17 billion in loans into the hands of the nearly bankrupt automakers who have been petitioning the government for a bailout. The proposal would be funded by money from an existing loan program designed to help automakers build fuel-efficient vehicles. If this proposal is approved, a "car czar" would be appointed to oversee the nearly bankrupt automakers’ restructuring and repayment of the loans. The "car czar" would also write the guidelines that automakers would be required to adhere to and would be charged with determining if those guidelines are being followed properly. If all goes well, automakers facing bankruptcy could receive emergency loans as early as December 15, 2008. The automakers receiving the bailout will be required to repay the loans by February 2009.

If these automakers are given a bailout, there needs to be a major change in the leadership ranks of these companies. The executives who allowed these companies to come close to the brink of bankruptcy should not be allowed to keep their jobs and benefit from this bailout.