St. Louis Bankruptcy Lawyers Blog

The only time a collection agency can make such a threat is if in fact the original creditor gives it permission to do so. But this is a very rare occurrence, so the chances that such a thing actually took place is slim. Either way, if the collector is threatening to report the debt, then they are probably threatening other (more pernicious) things as well.

When a debt is created, and you fail to make payments on it, the debt will almost certainly be sold to a collection agency. Once the debt is turned over to the agency, the collectors must follow very specific rules in their attempts to collect. This area of law is specifically covered by the Fair Debt Collection Practices Act (FDCPA). This statute regulates what a debt collector can and can’t do in its activities of collection. For instance, the collector cannot indicate, suggest, or threaten to report the underlying debt in question to the credit bureau. Such a threat has been deemed as unduly harsh and unnecessary. In addition, the collection agency can not indicate, suggest, or threaten that they will sue you on the debt, or that they will start calling all of your friends and relatives, or that they will begin calling your place of work every day. Because the only way that they can legally make such a claim/threat is if in fact the original creditor gave them express authority to make such a move as a result of non-payment.

So if the original creditor did not give such authority, why would the collection agency risk making an illegal move like that? Simple. Because making the threat more often than not helps to achieve the goal of getting you to cough up money. If they actually followed the very specific rules laid out for them in black and white, they wouldn’t get a whole lot of funds sent to them. But if they throw out a couple of nicely timed threats, that usually gets people scared just enough to pay.

Yes, in fact there is such a chance. This option is possible when you file a Missouri Chapter 13. It give you a chance (under certain circumstances) to drop the balance of your car loan while at the same time lower your interest rate.

A St. Louis Chapter 13 bankruptcy is described as a repayment plan over the course of three to five years in which certain creditors are paid back. This would include any car loans that you might have (unless of course you’d rather surrender the car, in which case you could hand the car back and get out from underneath the debt completely). The loan is spread out over a period of years, and the court allows for a defined interest rate to be used. This rate of interest is usually set at about 5-6%, which can be substantially lower than interest rates that some people are dealing with (rates as high as 17-18%, or higher). With lower rates spread out of a number of years, you could end up shaving off a couple thousand off of the total owed.

The other bonus of a Chapter 13 is the possibility of cutting several thousand off the balance of your loan altogether. This is described as ‘cramming down,’ wherein you end up owing not the current amount owed on your loan, but rather the actual fair market value of the car. This option becomes possible with what is called a ‘910 car’. A 910 car is an automobile that you purchased nine hundred and ten days ago or more (which works out to be about two and a half years). So let’s say you have a car or truck that you bought in early 2009, and you still owe $15,000. But the actual value of the car in question (taking into consideration Blue Book or NADA values, and the physical condition of the car) is closer to $7,000. In this type of scenario, the amount that you would pay back inside the Chapter 13 plan would be the lesser of the two. This obviously cuts that amount owed to the creditor in half (and again, spread out over a period of between three to five years in length).

The answer to this question depends upon which chapter of bankruptcy you file. Because the rules are quite different between the two main chapters, it makes sense to give a complete answer for both scenarios.

When you file a St. Louis Chapter 7 bankruptcy, it is necessary to disclose all property (real or personal) that you own (or will come into ownership very soon). In other words, you must make the Trustee aware of all the things that you are in possession of (or will be). This would include any real estate that you own, cars, trucks, boats, and mobile homes. All personal property, like furniture, appliances, stocks, bonds, and bank accounts. But also things like monies you expect to receive from an inheritance, divorce settlement, personal injury suit, workman’s compensation case, or a tax refund. The reason why all of this information must be disclosed is because the Trustee has the right to determine whether or not these things have enough value to liquidate. Of course, the government provides you with a number of exemptions in order to cover (or eliminate) any equity that may exist (your attorney should be able to sufficiently explain this to you how this works, but there are several blog entries on this site that describe how bankruptcy exemptions work). But if you anticipate a large tax refund, and it is getting towards the end of the year (like November or December), then it may be in your best interest to hold off on filing the Missouri Chapter 7 until you’ve had a chance to get your tax refund and spend it (you will want to make sure that you spend the refund on things that you need and/or can justify, because the Trustee will surely ask you where the money went). This would mean filing a bankruptcy in either January or February (depending on how long it takes you to do your taxes). Because otherwise, the Trustee is going to want to take the refund and spread it out to your creditors.

In a St. Louis Chapter 13 bankruptcy, things are a little bit different. A Missouri Chapter 13 is described as a repayment plan over the course of three to five years in which certain creditors are paid back. A monthly amount of money is paid each month to the Trustee, who then disperses the funds to the various creditors listed in your plan. The rules governing tax refunds in a Chapter 13 are as follows: if you receive a refund while you are inside the 13, you get to keep up to $600.00 of the total federal and state income tax refund. The rest would have to be sent to the Trustee to be distributed to the creditors. Of course, if you are used to getting a large refund at the end of the year, you can always adjust your withholdings such that you don’t end up receiving anything so large in the future. People tend to believe that the tax refund is like ‘extra free’ money that the government gives them once a year; but in reality, it is simply a refund of too much money being taken out of each paycheck. If you make a couple of adjustments to your withholdings, you would then receive a lesser refund, but you would enjoy a much larger paycheck.

This is a possibility, but as in all other areas of bankruptcy law, it depends on a few pertinent factors. There is nothing wrong with owning more than one car or truck, but it is the Bankruptcy Trustee’s job to look into and examine all of your assets to determine their condition, status, and value. In some circumstances, the Trustee may wish to liquidate the automobile or ask that you guarantee its value to your unsecured creditors. Knowing when this might happen is very important when you file for bankruptcy, but then that is why hiring an attorney who knows the Bankruptcy Code inside and out is so vital.

When you file a Missouri bankruptcy, the court requires that you disclose your ownership interest in all assets. This would include all cars, trucks, real estate, bank accounts, stock options, accounts receivable, executory contracts, leases, and personal property (such as clothes, books, appliances, and furniture). Once all property is properly disclosed, it is then necessary to assign a value to them. In the case of personal property, you are able to use garage-sale value (in other words, What would your clothes sell for at a garage sale / yard sale? Probably not much.) This garage-sale value is almost always covered by the exemptions that the government gives you to protect such property. But in the case of a major asset like a car, the court is going to want something a bit more solid than just your guess as to its garage-sale value. Depending on what the year, make and model of the car is, the fair market value can be determined in a few specific ways. Most notably the NADA or Blue Book. Of course, the condition of the automobile and the number of miles plays a factor in the car’s value as well. If the car or truck in question does not have significant value (or value that can be eliminated by way of an available exemption), then you may keep the car. So for example, if you are currently financing a 2009 Chevrolet Cobalt with a loan balance of $15,000, there is a good chance that there is no equity in the vehicle; you would simply reaffirm the debt with the creditor, and continue to make monthly payments on the note.

But if you own a great number of vehicles (two or more), then it may be necessary to justify why you own so many. If you are a household of two (ex. you and your spouse), then both of you owning automobiles is fine (and maybe even if you own one more just as a backup). But if you there are more cars or trucks that you have in your possession, it becomes necessary to explain why. Sometimes its related to the type of work that you do for a living. For instance, if you are a contractor, it wouldn’t be terribly unusual for you to own a work-truck. But if you are a household of one (just you living by yourself), and you own two cars, a truck, and a motorcycle, the Trustee is probably going to argue that one or more of those vehicles are strictly for your entertainment, and therefore a luxury item. This may in turn lead to either liquidation of the asset in a St. Louis Chapter 7 bankruptcy, or a large guarantee of money to the unsecured creditors in a St. Louis Chapter 13 bankruptcy.

Yes, this option is available in certain situations. If you qualify for a Missouri Chapter 7, then even if you start off in a Missouri Chapter 13, you can convert. However, as with most things in life, there are very specific rules that must be followed, and certain qualifications that must be met in order to do such a thing.

To begin with, if you start off in a St. Louis Chapter 13 bankruptcy, there was probably a good reason why. For instance, you may have been trying to stop a foreclosure on your home, or get back your car after it was repossessed, or you didn’t qualify for a Chapter 7 for some reason. The Chapter 13 offers a repayment plan to get caught on your debts. It is between three and five years in duration, in which certain debts are paid in full, and others are partially paid. It also provides an opportunity to get rid of a second mortgage on your house, cram down the amount on your car to actual value (as opposed to the balance of the existing loan), and protect your assets from being liquidated.

But there are several reasons why someone may wish to convert their Chapter 13 to a Chapter 7. So long as you qualified for a St. Louis Chapter 7 bankruptcy when you initially filed your Chapter 13, it can be converted. But if you have previously filed a Chapter 7, then a full eight years will have to pass first before you qualify for a new one. So if you filed a 7 three years ago, you will have to wait five more years to file another one. If this is case, then the only bankruptcy option for you would be a Chapter 13.

Then I say, ‘Congratulations!!’ This obviously means you are well on your way towards the fresh start / clean slate that a bankruptcy is supposed to provide. But there are certain things you should know about how this might affect your Missouri bankruptcy.

To begin with, when you file for bankruptcy, the court is interested in knowing what your household income was during the six months preceding the filing of the case. This information will determine (at least initially) whether or not someone qualifies for a discharge of unsecured debt (things like credit cards, medical bills, payday loans, and deficiencies from a repossession, foreclosure, or rental contract). The reason why the court looks to the past is because that is something that can be determined with a great deal of accuracy. It is easy to figure out how much you made over the last six months (you can usually just look at your most recent paystubs). If we were to look forward, it would be guesswork. So the only thing the court has to look at is the past.

If the last six months of income put you below the median income level for your household size, then you qualify for a St. Louis Chapter 7 bankruptcy (with a few wrinkles that should be considered as well). From start to finish (from when you file to when you receive your discharge), a Missouri Chapter 7 takes about three to four months. But once you file the petition for relief, the only thing the court looks at is what happened in the past. So if you get a fantastic job earning substantially more money six months after you file for bankruptcy, that is great news for you (because there really isn’t anything that anyone can do about that). The only exception would be if you were to receive something from a divorce settlement, trust or will when someone dies and leaves you something, or sometimes when you receive money from a personal injury suit, workman’s compensation case, or something similar in which you stand to gain monetarily. But all of this would have to occur within the six month period of time after you file for the Trustee to receive anything. So if you get divorced a year after filing your case, and receive a monetary settlement from your ex-spouse, it’s yours to keep.