Chapter 13 bankruptcy in Arizona is a long-term commitment. For those who successfully complete the process of the three-to-five year plan, a discharge of remaining debt awaits, as well as the peace of mind of having paid off a chunk of their secured, non-dischargeable debt while keeping any asset they really wanted to keep. But [...]

A Chapter 13 plan often sounds like a great idea at the time you file for bankruptcy.  But three to five years is a long time, and it is not uncommon for people to lose their jobs or face other financial hardships during that time.  If you lose your job during the course of your [...]

For years, healthcare has been a major subject of discussion in the United States.  Costs are ever-increasing, and many claim there is no clear solution, while others propose very different solutions to the problem.  But it should come as no surprise that medical debt has become a larger and larger factor leading to bankruptcy, according [...]

It is one of the oddities of life:  a business can file for Chapter 11 and remain respectable, while those who file for Chapter 7 or 13 are ashamed and embarrassed.  Is bankruptcy really something to be embarrassed about, and is there a difference between a corporate bankruptcy and a personal one? The main reason [...]

As the weather turns colder here in midtown Manhattan, we at Shenwick & Associates wanted to take this time to wish you a happy, safe and warm holiday season and a very happy and healthy 2013. We also wanted to thank you for your friendship, your business, your referrals and your trust in us. Personal bankruptcy, business bankruptcy litigation, short sales, real estate closings and our emerging student loan debt practice continue to keep us busy as 2012 draws to a close! We're here for you now and in the upcoming year, and we look forward to working with you.

It is one of the oddities of life:  a business can file for Chapter 11 and remain respectable, while those who file for Chapter 7 or 13 are ashamed and embarrassed.  Is bankruptcy really something to be embarrassed about, and is there a difference between a corporate bankruptcy and a personal one? The main reason [...]

Raj Sabhlok, ContributorEconomists fear we’re racing towards another trillion dollar bubble of student loan debt. But there is a simple way to stop the madness now, before we blow any more taxpayer dollars — or our kids pay an even bigger price. If financial history has taught us anything, it’s that high levels of debt and, more specifically, bad loans lead to financial crises. We have seen this numerous times including the Asian Debt Crisis in the late 90s, the more recent Greek Debt Crisis and, of course, the U.S. subprime mortgage debacle.Financial crises have often been linked to government monetary policy. Arguably, the U.S. government was at least complicit with “easy money” credit policies that led to the housing boom and bust, which in large part triggered our most recent financial crisis.Unfortunately, we are heading for another government-induced financial crisis — this time it is the $1 trillion in student loan debt. As of 2010, about one in five households in the U.S. have student loan–related debt of over $26,000. What is saddest about this pending crisis is that it will likely impact millions of student borrowers throughout their lives, because unlike credit card debt or mortgage debt, student loans can’t be discharged by bankruptcy.How did we get here?Ironically, as this crisis races toward a financial cliff, there has been no action by the government to curtail student loans, as would be the case in any other debt-related financial crisis. In 2011-12, the federal government issued 93 percent of all student loans.Student loans are unique for a number of reasons, none perhaps more glaring than the fact that virtually nothing can disqualify an applicant from a federally-backed loan, excluding a prior student loan default or a drug conviction. A student loan is quite possibly the only loan that is not tied to credit worthiness or the ability to repay. Even more frustrating is that these easy loans are correlated to the rising cost of college — colleges have every incentive to raise costs knowing that there is an endless money supply.Stop the madnessThis crisis will likely end badly for the millions of student borrowers steeped in debt and with no ability to repay. For some reason, the government believes that everyone should go to college and is willing to give students any amount of money to put them on that righteous path. Inexplicably, this is all happening with no regard to whether students will be employable upon graduation or how they will pay back these monstrous loans. This madness must stop.Like any loan, there needs to be some element of credit worthiness as William Bennett suggested last week in his article, “The looming crisis of student loan debt.” But one might ask, how can an unemployed student be creditworthy?A simple solutionAdmittedly student loans are riskier than most since there is no tangible asset to collateralize (although there certainly is a non-tangible asset — the student’s education). However, all educations are not created equal and should be “appraised” by lenders as part of a student loan determination.College fees and student loan debt have a perverse symbiotic relationship. Rising costs in education beget rising student loan debt. It is puzzling why an art degree costs as much as a computer science degree when the job prospects of each are so vastly unequal.Lenders, in this case the government, should make a fact-based determination of a student’s likelihood to graduate, to get a job and their expected income. Prospective students applying for loans can be evaluated for “credit worthiness” based on a score much like a FICO score. A student loan score would be based on a formula comprising their grade point average, major, and academic institution. Each of these variables is directly related to a student’s ability to get a job upon graduation and repay their loans. For example, a STEM (science, technology, engineering and mathematics) major at MIT would yield a higher score and loan compared to a religious studies major at a lesser ranked school.While the solution I have outlined doesn’t offer relief to those deeply in debt today, it will stop more hot air going into the student loan balloon. And although I agree that everyone should have the right to go to college and study whatever they’d like, our government and colleges shouldn’t be reckless with our youth’s financial future — or taxpayer dollars.Copyright 2012 Forbes.com LLC. All rights reserved.

Many people are confused about the difference between a charge-off and a bankruptcy discharge.  What is the difference, and which one is better? A charge-off occurs when your creditor, usually the bank with which you have your credit card, declares that your debt is unlikely to be collected.  The bank has, after assessing your situation, [...]

When life intervenes during the course of a Chapter 13 case, we can modify the debtor’s Chapter 13 plan. As I laid out the provisions of §1329 on modifications for that post, I saw the hand of the late Senator Ted Kennedy in this section. I talked earlier here about his role in providing a deduction on the means test for health and disability insurance that a debtor ought to have but might not have at filing. Subsection 1329(a)(4) provides that obtaining health insurance not already deducted in the means test justifies a modification of a confirmed plan: (4) reduce amounts to be paid under the plan by the actual amount expended by the debtor to purchase health insurance for the debtor (and for any dependent of the debtor if such dependent does not otherwise have health insurance coverage) if the debtor documents the cost of such insurance and demonstrates that— (A) such expenses are reasonable and necessary; (B) (i) if the debtor previously paid for health insurance, the amount is not materially larger than the cost the debtor previously paid or the cost necessary to maintain the lapsed policy; or (ii) if the debtor did not have health insurance, the amount is not materially larger than the reasonable cost that would be incurred by a debtor who purchases health insurance, who has similar income, expenses, age, and health status, and who lives in the same geographical location with the same number of dependents who do not otherwise have health insurance coverage; and (C) the amount is not otherwise allowed for purposes of determining disposable income under section 1325(b) of this title; and upon request of any party in interest, files proof that a health insurance policy was purchased. One hopes that health insurance will become more widely available and less expensive over the next couple of years. But don’t overlook the opportunities for reducing plan payments in confirmed cases to fund health insurance for your clients who didn’t have insurance at confirmation. Image courtesy of Truthout.org.

This is the case of Joseph Loomis who comes to me from Aurora, Illinois for consultation regarding debt relief.  Mr. Loomis has never filed for bankruptcy before.  He is not a homeowner and he is not renting, either.  He is living with his parents.  He has a 2012 Ford Transit which is financed by Ford+ Read MoreThe post Bankruptcy Case Study By Attorney David M. Siegel appeared first on David M. Siegel.