Before you file for Bankruptcy: Read This

 

Bankruptcy is seen as a fresh start for many people.

Bankruptcy is prominently mentioned in the Constitution. Article 1, Section 8, Clause 4 of the United States Constitution provides:

The Congress shall have Power To…establish…uniform Laws on the subject of Bankruptcies throughout the United States….

Bankruptcy is a necessary option for those with a high debt to income ratio.  However, it does come with serious consequences. Your credit will be ruined for up to 10 years, the process will cost you atleast 1-2,000$ to file and lenders will be very weary of you.  As a Bankruptcy paralegal myself, I would not recommend anyone file for bankruptcy who has less than 10,000$ of debt.  Debts can be paid down, negotiated, and so forth without destroying your credit report! However, if you find yourself in the midst of a foreclosure or simply cannot see a foreseeable way to escape, then bankruptcy could be your best option. If you are thinking about this option, consider these 10 strategies.

  1. Pass the “Means Test”:  If you are single and make under $40,000 per year, you will most likely qualify for a chapter 7 bankruptcy. If you are married and your combined income is less than $80,000 per year, you will most likely qualify. Some couples will strategically file for separation during a bankruptcy process in order to reduce their household income, however, the bankruptcy trustee will investigate your living situation to ensure it is a legitimate separation.
  2.  Replevin Orders are often needed to recover property from a debtor, which require the creditor to take you to court. Small items such as toasters, Televisions, or any item that is worth less than $1,000 is often able to be retained if the debtor is brave enough to call the creditor’s bluff. Replevin orders cost money and time. In my years working as Bankruptcy paralegal, it is extremely rare to see any creditor file for a Replevin order on any item worth less than a grand.
  3.  Credit scores can be strengthened after bankruptcy if you obtain a secured credit card and pay it down fast after making small purchases.
  4. Do not purposefully rack up debts on entertainment(non-essential) items and then immediately file for bankruptcy. Most debts younger than 90 days are generally scrutinized and are considered “fraudulent”  debts in many bankruptcy cases.
  5. Chapter 13 bankruptcies will save your house  from being foreclosed upon, however, it will only buy you a few months. If you fail to make payments on your Chapter 13 plan, the foreclosure process starts all over again.
  6.  Chapter 7 bankruptcies will not clear out mortgages and auto loans.  Expect to give back those properties after your case has completed unless you enter into a “reaffirmation agreement”.
  7.  Negotiate your reaffirmation agreement with your lawyer or better yet, try to avoid signing into one! See if the creditor will continue taking payments at the same rate as before. Oftentimes, creditors will try to get you to enter into a new agreement with higher rates to benefit themselves.
  8.  Child support is a non-dischargable debt.  However, filing for a Chapter 13 Bankruptcy can help you reorganize your child support debt and save you from getting your drivers license suspended.
  9.  Student Loans and owed Tax debt are generally considered non-dischargable. In some rare circumstances, they can be discharged.
  10.  Show up to court! If you don’t get a notice in the mail from your lawyer, call him/her! Missing your court date can cause huge delays and possibly have your case thrown out. It is imperative that before you file for bankruptcy, you save up some personal time off from your employer. The judge doesn’t care about your excuses. If you don’t show up, it takes alot work from the lawyers, paralegals, and courts to get a new court date. Your lawyer and the paralegals who assist will certainly thank you for making their job much easier!

 

These are just a few basic tips when it comes to filing for bankruptcy in Chapter 7 and Chapter 13 cases. If you have any additional questions. Feel free to contact me at Naliniglobalconsulting@yahoo.com

 

-Randell Stroud

2018

student loans are killing Americans

 

The United States government is about $20 trillion dollars in debt currently. The number is consistently climbing. With the collapse of Fannie Mae and Freddie Mac, financial institutions are more volitale than ever.

For many college graduates, student loans can feel like a financial death sentence. Child support, Taxes, Alimony, and Student loans are generally unforgivable in bankruptcy cases. So, what is a graduate to do if they cannot find a great paying job with their degree?

The good news is that there are well known options like “deferment” of payments and income based payment plans. However, many fail to realize that there are numerous grants and applications that can be used to lower your payments even further or have part of your balance forgiven.

Those who work in public service are the best candidates to have part of their loans removed. Teachers, lawyers, public defenders, and those who make less than 10K a year have a plethora of options for relief.  You can also challenge the accrediting merits of a school in order to have your loan forgiven.

Public Service Loan Forgiveness
Forgiveness from an income-driven plan
Federal Perkins Loan cancellation
Loan forgiveness for teachers
Loan forgiveness for nurses
Loan repayment assistance for doctors and other health care professionals
Loan repayment assistance for lawyers 
Additional student loan repayment assistance programs (LRAPs)
Military student loan forgiveness and assistance
Student loan discharge for special circumstances

If you need help processing your application or advice upon qualifications, feel free to set up a consultation with me by donating $30 on our support page .//naliniglobal.wordpress.com/support/

After you complete that step, shoot me an e-mail at naliniglobal@yahoo.com so that we may schedule a consult!

In liberty,

Nalini-Global

How to settle Legal Matters- A basic guide for Newbies

 

“Money makes the world spin”.  It’s a phrase that we all know very well. Credit cards, alimony, child-support, mortgages, student loans, business loans, ….with a current 19 Trillion debt, the United States and its citizens are buried in financial problems.  But, there is one thing that most of these aforementioned debts have in common, they can usually be mitigated with “settlements” and/or negotiations. However, in this article I will focus on basic lawsuits and criminal cases.

When we hear the word, “Settlement”, images of money are immediately conjured into our minds.  Most of the settlements we hear about in the media are for large sums, anywhere from $50K to millions of dollars, often involving celebrities or powerful business moguls.  Many people might ask, “If a party knows they are innocent, then why would they agree to settle the case?”

People settle cases for all kinds of reasons.

  1. Save on lawyer expenses
  2.  Avoid public attention
  3.  Reduce stress/Time in court
  4.  Reduce risks of harsher sanctions from potentially losing in a trial.

Defendants often settle criminal cases for “plea” bargains. (An admittance of guilt in exchange for a lighter punishment) for similar reasons that defendants agree to settle in civil cases.

Nobody likes being in court! It is costly, time consuming, stressful and can be somewhat intimidating. Whether you are being sued for a credit card debt or facing criminal charges, the potential of being garnished, put in jail, missing time away from work and family, the presence of armed guards, black robed judges, ect…. the entire process can be a bit frightening, especially for those who do not spend much time in the courts. (Which is usually most people unless you are a legal professional, police officer, or a habitual criminal.)

When we decide to settle a case, we have to weigh our options. Defendants and Plaintiffs settle for the same reasons believe it or not. If a defendant believes he has a weak defense or is simply fed up with the court process, he is likely to settle, if a plaintiff believes he has a weak argument or he is fed up with the court process, he is likely to settle. Time is money, and people do not like to have their’s wasted!

In essence, settlements happen when people come to a conclusion after assessing in their minds a “cost-benefit-analysis”.  Let us take a look at the perspective from a defendant and plaintiff’s point of view in a hypothetical discrimination case.

John sues Corporation-Z for racial discrimination.  John has several witnesses who have agreed to testify. Corporation-Z learns that these witnesses with be participating. Corporation-Z believes that John has a good chance at defeating them in court. Corp-Z offers John $10,000 to settle the case out of court. If John were to win the case in court, he would probably sue for much more in damages, however, if John takes the offer, he can save himself attorney fees and months (possibly years) going to court cases.

Although Corp-Z is in a disadvantageous position, they are well-funded and will be able to drag the case on for a long time. John is a simple 9 to 5 employee with very little resources. However, John feels that he has strong evidence and is unwilling to settle for $10,000, he refuses the offer and decides to see it through to the end. Corp-Z offers another amount for $15,000, John still refuses.

Corp-Z files several continuances to drag out the case. John is getting tired.

John later finds out that several of his key witnesses have decided not to testify. John is now getting worried. Corp-Z has not yet learned that the witnesses have backed out. The next court date is in 6 weeks. John must act fast! Due to these new circumstances, his chances to win the case have gotten much lower.

At this point, John has several options:

  1. Contact the defendant and accept their $15,000 settlement offer
  2.  Send the defendant one last counter offer for a higher amount before agreeing to settle.
  3.  Rebuild his case, look for new evidence, take the case to trial and potentially win big or end up with nothing if he loses.

Option 1 is the safest–  Defendants and Plaintiffs have the option to offer and/or withdraw settlement offers at ANY TIME. In this scenario, the defendant, Corp-Z is likely to accept to settle unless new evidence has been obtained.

Option 2 is a little risky–  In this situation, John has learned that his witnesses are refusing to testify. Corp-Z has not yet found out, however, if they do find out, they are very likely to withdraw any offers to settle, as they will be likely to defeat the suit. John can attempt to negotiate one last time to get a higher amount from the defendant, but it will take some time to sort out the particulars, and time is something John doesn’t have with a looming court date. The closer the trial date gets, the more likely the defendant is to find out about the witnesses backing out.

Option 3 is highly risky– If the case goes to a trial by jury and John has other evidence besides witness testimony, the jury could still see it his way. If his witnesses are his key pieces of evidence, then he is at high risk for losing. This option would require very careful consideration. If John wins the case through jury, he will likely receive a huge pay-out, if he loses the case, he could end up losing everything or even end up being counter-sued by Corporation-Z.

Factors to consider:

Is John poor? How bad does he need money? If he loses the case, will he still be financially sound? Is he looking for justice or a pay-out? What are his goals in this lawsuit? Is he mentally and emotionally prepared to stay in court for several more months?  These are questions John has to ask himself before making a decision on how to proceed.

 

From the Defendant’s perspective:

Corporation-Z is a business and they have a business to run. Handling these legal matters are a huge cost and burden on the operation. Negative publicity can also hurt the business extensively.  Even if Corporation-Z discovers that the plaintiff, John, has lost his key witnesses, it still may be beneficial for Corporation-Z to settle. Typically, when settlements occur, non-disclosure agreements must be signed stating that the allegations against the company cannot be publicly discussed.  If Corp-Z refuses to settle and defeats John, John may still end up retaining his right to discuss the trial and his allegations to public organizations causing bad press not to mention the extra legal fees it may take to try and sue John later for defamation.

In this situation, if Corp-Z discovers that John has lost his witnesses, Corp-Z can agree to settle, for the same amount previously offered or for a lower amount, (since Z now has bargaining power!) or Corp-Z can withdraw all offers and attempt to win in trial.

Corporate attorneys are famous for their slogan to , “Always settle, settle, settle”.

While Corporation-Z has a good chance at defeating John, they may end up spending triple the amount of their settlement offer attempting to defeat the suit, also, Corporation-Z isn’t fully aware if John has any other additional evidence that is not yet known.  Victory is not always guaranteed. In court, just as in a boxing match, the ability to appear weak when one is strong, and the ability to appear strong when one is weak, is very crucial in the negotiation process of settling a case.

Timing:

Losing a lawsuit that goes to trial can result in dire consequences.

  1. Income garnishments
  2.  Loss of employment as a result of being garnished by multiple entities
  3. Loss of public reputation
  4. property being seized
  5. injunctions being placed against yourself or your business
  6. liens being places on your assets
  7. Tax refunds being withheld
  8.  Negative credit score

(These are just a few examples)

Some may be tempted to file for Chapter 7 or Chapter 13 bankruptcy in light of being sued for a debt, however, I wouldn’t recommend doing so unless your debts exceed $10,000. I’ll save that discussion for another article.

Timing is very critical when it comes to successfully mitigating a civil or criminal case. Let’s say you owe a credit card company $10,000.  Typically, after you default on your loan for more than 90 days, the credit card company will likely sell your debt to a third party collector. A few months to a year later, you are likely to be served with a warrant stating that you are being sued for the amount by the third party debt collector who purchased the debt for pennies on the dollar.

Once the lawsuit is filed, the creditor now has the upper-hand. Since you have essentially ignored all attempts to collect, it is assumed that you are avoiding the debt and do not have the means to pay it back. A smarter decision would have been to inquire about hardship programs or attempt to settle the debt with a partial amount before you were sued. (Always get everything in writing).  However, since things have escalated to a court hearing, the creditor now probably believes that they have a great chance to win the case.

When most people owe a debt, they stick their heads in the sand and do nothing. If you are sued for a credit card debt, your goal now is to re-establish your bargaining power! Even if you owe the debt, make them prove it! File an answer to the lawsuit, file a discovery request, ask for continuances! ( I can help you do these things by offering a template to follow.) Once the creditor sees that you aren’t going to be like the other 99% of people who don’t show up to court and allow for a default judgement, the creditor will be likely willing to settle the debt for a fraction of what they are suing you for.

While you are fighting the lawsuit, whether your intention is to get it dismissed through lack of evidence,lack of itemization or your goal is to settle the debt for a lesser amount, you must act swiftly! If you do intend to settle the debt, be sure to make the number attractive but not too high. If you owe $10,000, offer them 30%, because they are likely to counter back asking for 50%.

If the creditor is not willing to settle and/or you lose the case, enroll in a “slow-pay” program. That’s right! If you lose a lawsuit, you can enroll in a “slow-pay” program whereas you may only be paying $20 a month or so to the creditor. (Albeit for a very long time!).  Through the slow-pay process, you can pay with a check or money order. In order for the plaintiff (or creditor) to garnish your wages, they have to get an approved garnishment order from a court. If you miss a single-payment through the slow-pay program, some jurisdictions automatically issue a garnishment order because of your lack of ability to keep your promise to pay.

Federal law protects workers from being fired if they are being garnished by a single entity. However, if two or more entities are garnishing you, federal law allows employers to fire you because of the administrative burden your garnishment orders are costing to the company you work for.

Any legal case must be taken seriously whether it be criminal or civil. Even traffic court can cost us! If you ignore a traffic ticket, don’t be surprised if you later find out that your drivers license has been revoked! Reinstating a revoked license is time consuming and can cost hundreds, even thousands, depending on the liens placed upon the license.

In many criminal cases, district attorneys will offer “plea deals”. This “deal” is basically where you agree to admit guilt in exchange for a lighter punishment. Plea deals can benefit both parties. The district attorney meets his conviction quota, you receive a lighter sentence than you would if you lost your trial, and the process of court is sped up.

Going back to the lessons we learned earlier about, “Appearing strong when you are weak, and to be weak when you are strong”, accepting plea deals is an art within itself just as accepting settlements are.

Example:

John is accused of stealing a car. John maintains that he is innocent.

John’s witnesses didn’t show up to court.

The state offers him a plea deal.  Admit guilt and you will only face 6 months in jail.

John refuses! The trial continues

The state is having a hard time presenting evidence against John.

The state offers a new plea deal.

“1 month in jail with 6 months probation.”

John again refuses and demands a jury.

The jury hears John’s defense and the state’s allegations against him.

The jury decides that John is guilty! John will be sentenced to 3 years in prison.

John should have taken the plea deal!

Now, this is a worse case scenario! Just as in our lawsuit example earlier with, “Corporation-Z”, many factors come into play.

Let us replay the scenario. This time, John has several alibis and video surveillance of the vehicle being stolen that he managed to find on the internet. The video is low-quality but the suspect appears to have red-hair, John has brown hair!

John challenges the state’s claim. The state claims that John merely dyed his hair brown and his alibis are lying about where he was during the alleged carjacking!

John is confident in his defense and refuses all plea deals.

The jury finds John innocent!

Had John taken a plea deal, he would have ruined his record and served time for a crime he never committed! However, the jury could have still convicted him. No matter how confident you feel in your case, always prepare for the unexpected and don’t be afraid to appeal if necessary to buy yourself more time.

When to refuse a plea deal or when to take one, is no different than debating on whether or not to take a settlement. Many innocent men and women have taken plea deals for crimes they didn’t commit on the advice of their attorney who advised their client that the evidence is just too strong against them; even though they maintain their innocence.

Some defendants value their honor so much, that they resolve to never take a plea deal regardless of the consequences, whereas others make informed decisions in an effort to preserve themselves. In law, there is no “black or white”, “right or wrong” choice. Everything is about weighing risks vs rewards.  Every situation is completely different.

Who is the judge presiding over this case? Who are the jurors? What state is this case being held in? What do the state laws say? Are you in a liberal state or a conservative state? Does your lawyer have a good reputation or a bad reputation? Are you handling this case pro-se? Do you have any experience with legal matters?

These are all questions that can drastically effect the outcome of a case, or as I call them , “The intangible factors”.  In your heart, you may know that you are innocent, or feel that your case is valid, however, it isn’t always about what you “feel”, it’s about what you can convincingly present to the courts in conjunction with applicability of the law.

If you are involved in a lawsuit or criminal case as either a plaintiff or defendant, be sure to check out our “Legal Services” page.  Our programs there offer legal defense funds for people starting as low as $20 per month with unlimited consultations with licensed attorneys.  If you want to consult with me personally, follow instructions on my Consulting Page .  I can offer you one-time friendly advice, educational lessons, templates, and other resources to you, however I cannot offer you legal advice as I am not a licensed attorney, thus, anything I advise you on will have to be taken as “friendly” advice, not legal advice.  I have been working in the legal-field as paralegal/researcher for about 7 years and have experience in various jurisdictions and areas of law.

feel free to contact me Naliniglobal@yahoo.com 

 

Copywrite 2017- NaliniGlobal

Randell Stroud