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Missouri Attorney General Chris Koster announced that a consent judgment has been obtained against Vortex Debt Group, and that the debt settlement firm will cease operations in the State of Missouri. Additionally, Vortex will refund all fees paid by its 300 Missouri clients within the next year.

The Attorney General’s Office alleged that Vortex engaged in deceptive and unfair practices where they promised to reduce consumers’ debt, in return for a substantial fee, but then did not actually reduce the amount of debt owed. In fact, most of the time the consumers found themselves with more debt after hiring Vortex.

“I urge Missourians experiencing debt problems to contact a not-for-profit consumer counseling agency or to seek competent legal representation from a consumer bankruptcy attorney in order to deal with debt-related issues,” Koster said in a statement.

Unfortunately, this type of experience with debt settlements firms in not unusual. Many of my St. Louis bankruptcy clients report that they have experienced the same sort of problems before finally sitting down with an experienced St. Louis bankruptcy attorney.

If you are in financial distress, do yourself a favor and sit down with a Missouri bankruptcy lawyer. Most bankruptcy attorneys offer free consultations. It just makes sense to sit down with a professional when making decisions regarding your financial future.

Bankruptcy can discharge most unsecured debt, including medical bills, credit card debt, pay day loans, and much more.
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As a St. Louis bankruptcy lawyer, I speak with a lot of people who are in financial distress. A lot of these individuals contact me after they are served with a summons. Lawsuits are filed by creditors every day in an attempt to obtain a judgment against a debtor.

When you are served with a summons, it will list dates by which you must respond and appear if you do not wish for the creditor to obtain a default judgment. A default judgment occurs when there has been no answer filed in response to the creditor’s complaint. In order to defend the suit, you will need to file an answer, respond to discovery requests, and appear at all court hearings. Unfortunately, if you actually owe the money, chances are the creditor will obtain a judgment against you despite all of this effort on your part. Once a creditor obtains a judgment, they are able to garnish your wages and levy your bank account. The judgment will also be reported to the credit bureaus, and will remain on your record for at least seven years.

If you are facing a suit for delinquent debt, you should consider whether filing a bankruptcy could be beneficial. Being sued over past due debt is usually a warning sign that you are in financial distress. Filing bankruptcy gives you automatic protection from creditors. The bankruptcy filing can stop lawsuits, wage garnishments, foreclosures and repossessions. Once the bankruptcy is discharged, you will no longer owe the debt, and the creditor cannot try to collect from you.
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If there is a frequently overlooked rule in the world of bankruptcy, it is the rule concerning recent payments to insiders. This rule is very important, because it can sometimes mean the difference between whether one can and/or should file a St. Louis Chapter 7 bankruptcy.

The question at issue is: Have you either 1) paid back or 2) given away more than $600.00 to friends or family within the twelve month period prior to filing for bankruptcy? If the answer is yes to either, it doesn’t mean you cannot file a petition for bankruptcy relief. But it may push you into a St. Louis Chapter 13 repayment plan.

Why? Well, let’s say your particular case is on the surface a clear-cut Chapter 7. You’re below the median income, you have no assets with considerable equity, and you have tons of credit card debt and medical bills that you’d love to get rid of. But six months ago, you came into some extra money, so you decided to pay back that $2,500.00 loan from your older brother. You figured if you had the cash, you might as well make good on a family debt. Fast-forward six months to the present, and you are meeting with a St. Louis bankruptcy attorney, being asked questions about payments to creditors over the last year.

Being the honest person that you are, you disclose the fact that you paid back your brother $2,500.00 six months ago. The St. Louis bankruptcy attorney then tells you that if you file a Chapter 7, you will either have to pay that amount to the Trustee, or else the Trustee can go after your brother for the $2,500.00 you paid him (and hopefully your brother still has the money). In the alternative, the bankruptcy attorney says that you could file a Chapter 13 bankruptcy, which will protect your brother from the Trustee, but will now require you to pay back the $2,500.00 in monthly installments.

So at this point, you are beyond irritated. All you’ve done is asked for some advice on bankruptcy, and the attorney is making it sound as if you have committed a crime because you paid off your older brother. But if you think about it, the attorney has actually given you some valuable information. First, you now know that filing at this very moment in time may not be the best idea (for the sake of your brother, and your ability to file a Chapter 7). But more importantly, you now know how much longer you need to hold off before filing for bankruptcy (which in the scenario above works out to be about six more months).
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If you have fallen behind in car payments, chances are you are worried about the repo man coming for your car.

As a St. Louis bankruptcy attorney, I meet with a lot of individuals facing financial hardship. Many of these individuals have fallen behind on car payments and are living in fear of their vehicle being repossessed. They have been hiding the car in the garage or at a friend’s house, hoping to outsmart the repo man. This may work for a while, but eventually the repo man will catch up to you and one day your car will be gone.

How will you get to work without your car? If you cannot get to work, how will you make your rent or mortgage payment? Luckily, there is a solution.

Bankruptcy can stop repossession. Once a bankruptcy is filed, the automatic stay protects you from your creditors taking adverse action against you. If you are behind in car payments, a St. Louis Chapter 13 bankruptcy can protect you from the repo man while you get that car paid off over a period of three to five years. If fact, if your car has already been repossessed it may not be too late for an experienced St. Louis bankruptcy lawyer to help you get your car back.
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Once you make the decision that bankruptcy may be right for you, it is time to meet with an experienced St. Louis bankruptcy lawyer. Make the most of your face time with the attorney by being well prepared for the consultation. The more information you can provide to the bankruptcy attorney, the better their understanding of your situation will be. I advise my potential St. Louis bankruptcy clients to bring the following information/documentation to their free consultation.

• Have a general idea of the type and amount of debt you owe. This information is crucial in determining which chapter of bankruptcy is right for you.

• Bring a copy of your most recent paycheck stub. Bankruptcy requires full financial disclosure. The amount of money you make will determine which chapter(s) of bankruptcy you are eligible to file.

My St. Louis bankruptcy clients often tell me about the tactics used by debt collectors in an attempt to get paid. Nine times out of ten the tactics described are illegal under the Fair Debt Collection Practices Act (FDCPA). The FDCPA regulates how creditors can attempt to collect debts. Here is a brief overview of what you need to know about the act.

• Debt collectors cannot call repeatedly or continuously. The FDCPA considers repeat calls to be harassment.

• Debt collectors cannot use obscene, profane, or abusive language in their attempts to collect. This is also considered harassment under the FDCPA.

Do you feel like you are drowning in student loan debt? You are not alone. Many St. Louis bankruptcy debtors are in default on their student loan obligations. In fact, the rate of default increases every year. It can be hard to make minimum payment on student loan debt when you are already struggling to pay rent, health insurance, and car payments.

Unlike credit card and medical debt, student loan debt is typically non-dischargeable in St. Louis Chapter 7 or St. Louis Chapter 13 bankruptcies. When you fall behind on student loan payments, the account will likely be turned over to a collection agency and you will start getting calls from bill collectors. In addition, you can be sued, your wages can be garnished, and the creditor can also take future tax refunds to offset the balance owed.

It is almost impossible to get student loans discharged by filing for St. Louis bankruptcy relief. In order to do so, a debtor must be able to prove serious undue hardship. Such hardship is difficult to prove and is focused mostly on your future ability to repay. Judges in the Eastern District of Missouri bankruptcy court encourage debtors to look into income based repayment options since most debtors are not eligible for student loan discharge.

Nowadays, many individuals filing for divorce are in serious financial distress. These individuals are often considering a St. Louis Chapter 7 bankruptcy filing in addition to dissolving their marriage. Filing for St. Louis bankruptcy prior to divorcing has some serious benefits. Here are a few reasons why you might want to consider a joint bankruptcy filing before divorce:

• A married couple can file a joint bankruptcy petition. If you wait until after you are divorced, each party will have to file their own case, which means paying additional attorneys’ fees.

• Most married couples share joint debts. Discharging those debts prior to filing for divorce eliminates the need to address these debts during the divorce. This saves time and time is money when paying attorneys’ fees.

Short sales and foreclosures often result in forgiveness of debt for the borrower. Forgiven debt can result in taxable income. Since the amount of debt forgiven is often quite large, this can be a scary proposition to a lot of debtors. The good news is that if your mortgage debt is forgiven during tax years 2007 through 2012, you may be able to obtain tax relief through the Mortgage Forgiveness Debt Relief Act.

Under the Act, you may be able to exclude up to $2 million of debt forgiven in relation to your principal residence (or $1 million if married but filing separately). You can include mortgage debt forgiven in a foreclosure or through mortgage restructuring. In order for the debt to qualify, it must have been incurred to buy, build, or improve your principal residence, and must be secured by that residence.

What type of mortgage debt doesn’t qualify? Debts forgiven on second homes, rental properties, and commercial properties do not qualify. Also, proceeds from a refinance that were used for other purposes, such as paying off credit card debt or medical bills, do not qualify for the exclusion from income under the Act. However, there may be other tax relief that applies, and you should contact a tax professional for more information.

When debt is forgiven, the lender will send a Form 1099-C (Cancellation of Debt) at the end of the year. This form will show the amount of debt forgiven and the fair market value of the property foreclosed, if applicable. Examine this form carefully for errors, and notify the lender immediately is any of the information is incorrect. Make sure to give the form to your CPA or tax preparer when it is time to prepare your tax returns.

If your home is foreclosed upon, or you do a short sale, and the remaining debt is not forgiven by the lender, you may have a deficiency balance.
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My St. Louis bankruptcy clients are always sad to learn that Chapter 13 and Chapter 7 bankruptcy cannot discharge their student loan debt. Even after receiving a discharge of the rest of your debt, it can still be hard to come up with the monthly payments on student loans. If you cannot pay then you end up in default, and could be subject to garnishment and/or bank levy. They can even take your tax refunds!

Before you get too freaked out, you should look into Income-Based Repayment (IBR). IBR is designed to be more helpful than the older Income-Contingent Repayment Plan (ICR). IBR applies to Direct Loans and government guaranteed FFEL student loans. You cannot be in default if you want to enter IBR, but you can be eligible after bringing your student loan payments current.

To be eligible for IBR you must have a “partial financial hardship.” This means you must meet minimum income requirements to enter this repayment program. Your monthly payment can be zero, and is calculated based upon income level and family size. After 25 years in IBR, your student loan debt will be forgiven. Unfortunately, however, the forgiven amount is taxable unless you are insolvent.