St. Louis Bankruptcy Lawyers Blog

No, it is necessary that your spouse file a joint bankruptcy with you. And in fact, it may sometimes be more beneficial to file solely based on the situation at hand and the types of debts that exist.

First, let me start by describing when a joint bankruptcy (either Chapter 7 or Chapter 13) between you and your spouse may be best. The most common situation would be when a husband and wife own most of their debts jointly. For instance, if the credit cards, personal loans, mortgage, car notes, and business debt are in both of your names (and therefore you are both jointly liable for the underlying debts), then it is probably advisable to file the bankruptcy jointly. You can still file an individual petition, in which case all the debts would be discharged that run to you, but your spouse would still be on the hook for all the money that is owed. In this scenario, even though you have gotten out from underneath the debts, it is still going to end being a problem since the creditors will simply go after your spouse. But if you both file, the debts are discharged jointly so that the creditors cannot come after either one of you.

But sometimes, it is preferable to file a bankruptcy individually without your spouse. Many examples come to mind, so let me describe a couple. The most obvious example would be a case where you are the only one who has amassed the debt, it is all in your name solely, your spouse has little or no unsecured debt, and your secured assets are separately owned (you have a car in your name, he/she has a car in his/her name). In this scenario, it would probably make more sense for you to file a St. Louis Chapter 7 or St. Louis Chapter 13 individually. This would also ensure that at least one member of the household will not have the bankruptcy filing show up on their credit report (which may be advantageous in the short-term while the filing spouse gets back on their feet financially).

Another example would involve a situation in which one of the spouses is not currently eligible for a discharge in a bankruptcy. The bankruptcy code states that an individual may not file two Chapter 7s within an eight (8) year period. So if your wife filed a Chapter 7 in May 2010, she is not eligible to file another Chapter 7 until May 2018. But if your debts have reached an unsustainable point, such that making even minimum payments is unfeasible, then you still might want to file an individual bankruptcy even though your wife cannot.
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Many of my St. Louis bankruptcy clients assume that by filing for bankruptcy, either their current employment will be harmed or that they will have a more difficult time getting a job in the future. To begin with, it is unlawful for an employer to discriminate against you because you have filed for bankruptcy. There are legal codes detailing what an employer can and cannot do in regards to an employee who has filed for either a Chapter 7 or Chapter 13 (see 11 U.S.C. §525).

Regarding a Chapter 7 bankruptcy, the only way that your current employer is going to know that you filed anything is if you tell them. Otherwise, it is highly unlikely that they would ever find out. Your debts will get discharged, you will continue to work, and life will continue apace (but with much less stress, since you will have gotten rid of all your creditors).

In a Chapter 13 bankruptcy, you will be placed in a repayment plan over the course of three to five years. The most common way in which the payments are made to the Trustee each month is by way of a wage order (through which your payroll department deducts from your paycheck the amount necessary to go to the court). Thus, your employer (at least your payroll department) will know about the bankruptcy. This may sound like an invasion of your privacy, but you would probably be surprised to learn just how many people you work with whom are currently in a Chapter 13 repayment plan in which part of their earnings go towards payment of debts, and you have been none the wiser.

However, if you have recently filled out an application for a job, you will notice that most have a question pertaining to whether or not you have filed for bankruptcy before. If you have filed in the past, you should answer honestly. There is no reason at all to lie. But the fact that you have filed a bankruptcy in the past cannot be the basis for why you were denied employment. The employer simply cannot use this fact as justification for not hiring you.

Occasionally, there are businesses and corporations that do in fact discriminate against someone because of a bankruptcy filing. But these entities are often sued and are required to compensate the individual for having violated his/her rights.
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Discharging income tax debt in bankruptcy can be difficult. The rules surrounding when income taxes can be discharged are quite complicated. However, income tax debt is eligible for bankruptcy discharge if certain conditions apply:

The tax debt is at least three years old.

To eliminate income tax debt in bankruptcy, the taxes to be discharged must have been “due and owing” for at least three years prior to the date the bankruptcy case was filed. For example, if you file a bankruptcy case on May 2, 2011, any income tax owed for tax year 2007 may be eligible for discharge, assuming other conditions are met. This is because any tax owed for 2007 was due and owing on April 15, 2008, which is more than three years prior to May 2, 2011. Some issues can arise that further complicate this rule, such as offers in compromise, so make sure to seek the counsel of an attorney before filing bankruptcy to discharge tax debts.

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.