Getting student loans after bankruptcy Aberdeen

February 11, 2016
Gerald Pearce of Aberdeen

Common Errors People Make Prior to Filing For Bankruptcy

  • Using their retirement savings (IRA or 401K) to pay expenses and debt. These assets are protected in bankruptcy, so they should not be depleted prior to filing a bankruptcy petition.
  • Transferring property (like a car or a house) to a creditor or anyone for payment of a debt or to protect an asset, before filing bankruptcy. The law may require that property be transferred back as part of the bankruptcy process.
  • Using credit cards for luxury items within three months of filing for bankruptcy. When a client incurs $500 of luxury debt to one creditor, or receives a $750 cash advance within a short time before filing (90 days/70 days), these obligations may not be dischargeable in a bankruptcy case.
  • Paying unsecured debt with funds created by a secured debt. For example, paying credit cards debt (an unsecured debt) by obtaining a second mortgage (a secured debt) on a home. Normally, unsecured debts can be discharged in a bankruptcy case.

McCrann Law Firm, PA, located in Aberdeen, NC, represents residents of the NC Counties of Cumberland, Harnett, Hoke, Lee, Montgomery, Moore, Richmond, Robeson, and Scotland in bankruptcy proceedings. Please contact us for more information.

Max Garner's 34 Things NOT To Do When Preparing to File A Chapter 7:

  1. Don't leave out bank, checking, savings, brokerage, or credit union accounts
  2. Don't file if you income is greater than your expenses
  3. Don't use your credit cards
  4. Don't take credit card advances
  5. Don't use convenience checks
  6. Don't do balance transfers
  7. Don't pay money to family
  8. Don't pay money to friends
  9. Don't tell a creditor that you intend to pay
  10. Don't leave assets of of your paperwork
  11. Don't file if you are about to receive a tax refund or inheritance; discuss the timing with your lawyer
  12. Don't fail to tell your lawyer about your small business, sole proprietorship, partnership, LLC, LLP, corporation or hobby
  13. Don't purchase a home shortly before filing bankruptcy without first consulting your lawyer
  14. Don't give or gift property to anyone
  15. Don't pay more than $600 on any past-due bill
  16. Don't transfer property to anyone
  17. Don't cash our retirement plans or any 401-k
  18. Don't take out a second mortgage
  19. Don't gamble
  20. Don't hide assets or debts
  21. Don't take out "pay day loans"
  22. Don't put your money in your kids' bank accounts
  23. Don't omit or "save" a credit card for after your bankruptcy
  24. Don't fail to list debt to family or other "insiders"
  25. Don't write bad checks
  26. Don't borrow money
  27. Don't forget to tell your attorney about liens you may have on your home or unpaid judgments so they can be avoided
  28. Don't make major financial decisions without first talking to your lawyer
  29. Dont' get married before filing if you spouse has a high income
  30. Don't misrepresent facts to your lawyer
  31. Don't run up your credit cards in advance of filing bankruptcy
  32. Don't fail to appear at court hearings, trials or proceedings; coordinate with you lawyer.
  33. Don't hide from you lawyer; keep them up-to-date with your address, phone number and email address.
  34. Don't bank where you owe money. Close the account and reestablish it somewhere else. Social security debtors who do this have a lag time of a few months as sometimes it takes SS that long to get it done. If you are pressed to file, then clear out the account as soon as the deposit hits the bank. This also happens with payday loans. Many of those people have the debtors sign a form to withdraw money from the account on a regular basis and these are almost impossible to stop.

Max Gardner's Reasons Not To File Chapter 7:

  1. You want to avoid a second mortgage on you home.
  2. You want to be sure that your case is not reviewed by the United States Trustee/Bankruptcy Administrator.
  3. You want to keep your car and it is secured by a first lien in favor of Ford Motor Credit Corporation.
  4. You recently gave your car and boat to your grandson.
  5. Your real income on Schedule I is much greater than your actual expenses on Schedule J.
  6. You are substantially above the median family income in your state.
  7. You have a truck and a car and a Harley that are all not paid for.
  8. You are the sole beneficiary of your father’s estate and he is dying of cancer.
  9. You are the sole beneficiary of your mother’s insurance policy and she just died.
  10. You recently incurred substantial credit card debt since you knew you would not be able to get new credit for awhile.
  11. Last month you used your new Capital One cards and lost $10, 000.00 in Atlantic City.
  12. You filed Chapter 7 and got a discharge 5 years ago.
  13. You want to discharge your student loans using the hardship rules.
  14. You have a number of good pending civil actions for damages.
  15. Your attorney has identified a number of Truth in Lending claims.
  16. Your attorney has identified a number of FDCPA and state UDAP claims.
  17. You do not have $2, 000.00 to pay the attorney for filing the Chapter 7 case.
  18. Your son owes you about $10, 000.00 and you have a lien on his car.
  19. You recently repaid your grandmother the $20, 000.00 she loaned you for your failed business.
  20. You have 5 CD’s at the bank with a total face value of $25, 000.00.
  21. You own your home free and clear and it is worth $100, 000.00 but your exemptions under state law are only $37, 000.00.
  22. You want to keep your 1964 Pontiac GTO.
  23. You expect to receive a tax refund of $14, 000.00 on last year’s taxes.
  24. You owe the IRS about $20, 000.00 in 941 taxes and you want to discharge them.
  25. You also owe the IRS for 2006 and 2007 taxes in the combined amount of $12, 000.00 and the returns were filed on April 15th of each year.
  26. You really do not want to tell your creditors about your NASCAR collection in the event you might lose it.
  27. You have some "heir" property in the mountains and do not want to list it since your relatives who own it with you might get mad.
  28. Your mother-in-law co-signed the debt on the truck that you want to abandon in your bankruptcy case and of course protect her.
  29. You actually refinanced the 2nd mortgage about 45 days ago and used the cash to payoff about $43, 000.00 in credit card debt.
  30. You have a hold harmless/property settlement agreement on about 10 joint debts with your ex-spouse.
  31. Your attorney is unfamiliar with the trustee’s look-back time limits with regard to property transfers and Section 548.
  32. Your attorney does not have malpractice insurance.
  33. You want to bring some of the pre-petition claims in your own name in the bankruptcy case.
  34. You have a closely held corporation and just want to file Chapter 7 to discharge the debts.
  35. You want to file a Chapter 7 to discharge the debts but protect your relatives who cosigned some of the loans.
  36. You want to file to discharge your child support arrears.
  37. You want to file to discharge your back alimony payments.
  38. You got your Chapter 13 discharge 3 years ago but need to discharge some of your new high interest credit card debt.
  39. You want to give a notice of rescission of a Deed of Trust or Mortgage. Under TILA, the Deed of Trust or Mortgage is void as soon as you give the notice. You then make the tender as an unsecured claim in the 13. This way there is nothing for the Trustee to avoid.
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