Creditors – Page 2 – Law Office of Rick Morin, PC

Bankruptcy Law, Chapter 11 Bankruptcy, Creditors

Donald Trump’s Many Bankruptcies

Donald Trump

Donald Trump certainly has been in the news a lot recently. Whatever you think about his politics or show business credentials, the man clearly knows his way around a United States Bankruptcy court.

A brief review of bankruptcy court information reveals that Donald Trump’s organizations have filed at least five bankruptcies since 1990. Each of these bankruptcy cases were filed under Chapter 11. Chapter 11 bankruptcy allows a person or a corporation to reorganize their debts under the supervision of the bankruptcy court.

Most Chapter 11 cases are for very large businesses or wealthy individuals. Think 50 Cent, or General Motors — they both filed Chapter 11 bankruptcy to help reorganize their respective debts.

Donald Trump’s first Chapter 11 case was related to his Taj Mahal casino and resort in Atlantic City. The casino, opened in the spring of 1990, was forced into Chapter 11 in November of that same year, presumably because the business could not support the large amount of debt payments associated with the resort’s construction.

Trump Plaza Hotel was forced into Chapter 11 bankruptcy in 1992 — again because of a crushing debt load.

All things bankruptcy was quiet for Donald Trump until 2004, when Trump Hotels & Casino Reports rushed into bankruptcy court. The bankruptcy filing gave the corporation additional leverage for Donald Trump to work out deals with his creditors. The company emerged from bankruptcy as Trump Entertainment Resorts Holdings.

Trump Entertainment Resorts Holdings needed to declare bankruptcy again in 2009, now having accumulated over $1.2 billion in debt. Trump and his creditors tussled over who would control the resorts and whether Donald Trump’s name would remain on the business. Trump and his creditors ultimately came to an agreement with the assistance of the Bankruptcy Court.

Donald Trump’s most recent bankruptcy filing was in 2014. Trump Entertainment Resorts Inc declared bankruptcy again, how reporting debts somewhere less than $500 million. This bankruptcy case is still open, with the court approving the Chapter 11 reorganization plan in March of 2015.

August 17, 2015/by Attorney Rick Morin

Bankruptcy Law, Bankruptcy Rules, Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Creditors

List all of your bankruptcy creditors – or else!

Bankruptcy Creditors

Preparing a successful Chapter 7 or Chapter 13 bankruptcy involves many steps. One of the most important steps in any bankruptcy is to ensure that you have listed all of your creditors. Here’s why.

After a Chapter 7 or Chapter 13 bankruptcy is filed, the court will send every creditor a notice of bankruptcy filing. This notice tells your creditors that you have filed bankruptcy. The notice also gives your creditors information about your case such as the date of your bankruptcy meeting of creditors. The notice also contains important deadlines.

The court will only mail this notice to creditors that have been properly listed on the bankruptcy schedules. After all, the bankruptcy court does not know who you owe money to. The court simply takes information that is provided on your bankruptcy paperwork and uses that information to notify all of the relevant parties.

One question that I am often asked is what to do when a creditor has sold a debt or assigned it to a collection agency. My rule is to be as thorough as possible when listing bankruptcy creditors. I prefer to list the original creditor, such as capital one, and also the collection agency that the debt is it assigned to, such as Midland Funding LLC. This ensures that all appropriate parties receive your notice of bankruptcy. It also ensures that each creditor will stop contacting you once your bankruptcy is filed.

Another trick is to make sure that you notify your creditors at the appropriate mailing addresses. Look on your debt statements for a “correspondence address.” This address might be different than the payment address. You also might need to use Google or other tools in order to locate the mailing address for your various creditors. Sometimes this information is not easy to find on a creditor’s website.

The bottom line is that you should take time to ensure that you list all of your creditors at the right address on your bankruptcy paperwork. Bankruptcy law and the rules of the bankruptcy court tell you that only properly listed debts will be discharged in your bankruptcy. The main point of this article is this: list all of your debts, even debts that you are not sure about.

After going through bankruptcy, you don’t want to discover that you forgot to list major creditors. Dealing with creditors after your bankruptcy is over can be difficult. Getting things right at the beginning will help you down the road.

Please call my office if you have any questions about filing bankruptcy in Sacramento. My phone number is (916) 333-2222.

March 4, 2015/by Attorney Rick Morin

Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Creditors

Rebuild Credit After Bankruptcy

Construction

Most of my clients ask for advice on how to rebuild credit after bankruptcy. The good new is that it is absolutely possible to have a good credit score within just 12-24 months of filing for bankruptcy. You will need to have a plan and stick to it, but it is not impossible by any stretch of the imagination!

Chapter 7 bankruptcy will give you a fresh start. Your old debts will be a thing of the past. No more collection calls, garnishments, or lawsuits. But bankruptcy itself doesn’t do anything for your credit. That is up to you.

An easy way to start working on your credit might not actually take any effort on your own part. If you are keeping a car loan, called a “reaffirmation” in bankruptcy terms, your lender will report your ongoing payments to the credit bureaus. This means that you don’t even have to apply for any new accounts to start working on your credit after bankruptcy. However, it is important that you make your loan payments on time!

Not everyone knows what makes up a credit score. For purposes of this blog, one of the most important parts of a credit score is your payment history. Even one late payment that hits your credit can wreck months and months of hard work. So whatever you do after bankruptcy, make sure that your payments on credit accounts are on time each and every month!

Right after bankruptcy, it will be very possible to get new credit cards. In fact, you will probably receive credit card solicitations in the mail. Be careful though: a lot of the products being offered to you right after a Chapter 7 bankruptcy will have high interest and fees. Know what you are getting into before signing up.

What I strongly recommend to people after bankruptcy is this: a secured credit card. Most of the major banks offer them. I know that Capital One and US Bank offer good secured credit card products. A secured credit card requires a deposit in the amount of your credit limit. They usually start small, around $300 to $500. Once you establish a good history of on-time payments and responsible use, the bank will convert your secured card into a full credit card — and they will even refund your deposit!

Whatever route you take, it is critical that you maintain good credit habits. Don’t max out your accounts and make sure you are making your payments on time each month. A good credit score is no free lunch. It will take a concerted effort and careful planning to get right. But it is worth the effort!

If you have questions about re-establishing credit after a Chapter 7 or Chapter 13 bankruptcy in Sacramento, please call my office at (916) 333-2222.

February 9, 2015/by Attorney Rick Morin

Chapter 7 Bankruptcy, Creditors

Payday Loans Are Worse Than Gambling

Poker
A sure sign that a person is ready to file bankruptcy is a reliance on payday loans. Let me be clear: these things are flat-out scams. Any loan with interest rates over 100% should be illegal. I’m not entirely sure why our elected representatives have not outlawed these things. Alas, they are a part of life for many people.

Taking a payday loan is often a necessity for someone in a dire financial position. The problem is that while the loan provides immediate relief in a tough time, the consequences of the payday loan are long-lasting.

The fees and interest with these loans are abusive and put desperate people into an even worse position than before the loan existed. This is especially true when people “roll over” their payday loans multiple times. A recent report indicated that over 80% of new payday loans are not paid in full on their first maturity date. And a majority of payday loans have been “rolled over” at least 10 times.

The good news is this: payday loans, just like all other forms of unsecured debt, will be eliminated after a successful Chapter 7 bankruptcy. Of course, payday loan companies don’t want you to know that. In fact, I have heard many stories where payday loan companies have flat-out lied to my clients and told them that the loans were not dischargeable in bankruptcy. Take it from an expert: these predatory loans are absolutely dischargeable in a bankruptcy. Bring it on, payday loan companies!

Everyone deserves a fresh start. If your finances are a mess, don’t turn to predatory payday loan or cash advance companies to try to make ends meet. You would probably have better luck taking that same money to a casino and putting it all on black. At least the casino won’t follow you around for years trying to get more and more of your money.

Don’t fall in the payday loan trap. If your finances need a fresh start, you should skip these scam loans and consider bankruptcy relief. My office can help you get a fresh start. Please call me at (916) 333-2222 to find out more.

February 4, 2015/by Attorney Rick Morin

Bankruptcy Law, Chapter 7 Bankruptcy, Creditors, Local Bankruptcy News

Bill Collection Scams in Sacramento

Debt Collector

My office has been receiving a surprising number of phone calls recently from people thinking about filing bankruptcy with one common trait: they were recently called by a extremely aggressive bill collector. Read more below to find out what you need to know about these bill collection scams in Sacramento.

Bill collectors get a bad rap because of a minority of people in their industry. However, the number of “bad” collectors appears to be in the rise. At least that’s what the phone calls to my bankruptcy law firm seem to indicate.

Potential bankruptcy filers calling my office all tell a similar tale. They defaulted on a debt in the past 10 years or so and never heard from the company again. Then, out of nowhere, they were flooded with aggressive phone calls. Not only to their personal numbers, but to work and to family and friends.

In one case, a client of mine agreed to pay an aggressive collector some money because he was hounding her at work. What the client did not know at the time was the debt was too old — it was beyond the “statute of limitations.” The client had no legal obligation to pay the debt!

Other clients have told me of stories of collectors threatening them with arrest or criminal prosecution for failing to pay a debt. My advice here is the same that I give to my clients: there are very, very few circumstances in which a person can be arrested for failing to pay a debt in America. This is jut another dirty trick that collectors use to try to get any money that they can.

Again, not all collectors are bad apples. In many cases, they are pursuing legitimate debts or judgements. If you receive collection calls, whether they be legitimate or not, it is important that you consult an experienced consumer attorney.

I have helped many clients deal with bill collectors — and bankruptcy isn’t always the path that we go down. I have negotiated debt settlement offers that keep collectors at bay and also avoid the need for filing bankruptcy. Occasionally we determine that bankruptcy is the best available option. Either way, I’m happy to guide clients through this challenging process.

If you have questions about aggressive debt collectors or bankruptcy in Sacramento, please call my office at (916) 333-2222.

December 28, 2014/by Attorney Rick Morin

Bankruptcy Law, Chapter 7 Bankruptcy, Creditors

How to Stop Wage Garnishment

Here in California, a judgement creditor can garnish your wages. A creditor can take up to 25% of your gross paycheck each pay period. For many of my clients, this is a disaster waiting to happen. Let me tell you how garnishments start, and how to stop it.

Before a creditor can take money from your bank account your garnish your wages, they must first sue you. Sometimes you might not even be aware that you are being sued. For instance, you might have moved recently, or the creditor failed to serve you properly.

The end result of many of these lawsuits is a “judgement.” When the court issues a judgement against you, it means that you have lost the lawsuit and the court has determined that you legally owe someone else money.

Only after a judgement may a creditor be able to garnish your wages.

After a creditor has its judgement, they can seek a “writ of execution.” This is an order from the judge that tells your employer that they must withhold money from your paycheck. Once your employer is served with the writ of execution and levy instructions, they are required by law to start turning over money to the levying officer.

The levying officer is the Sheriff’s office in the county of your employment. The levying officer is tasked with collecting funds from your employer. Once the levying officer has your funds, they turn over the funds to the judgement creditor to satisfy your debt. This will continue each paycheck until the debt is payed off, or you take action to stop the garnishment.

The most effective way to immediately stop your garnishment is to file bankruptcy. Bankruptcy will not only stop the garnishment in its tracks, but bankruptcy also eliminates your obligation to ever pay the debt again. For these reasons, a good percentage of my clients file bankruptcy just to stop a garnishment.

Once you file bankruptcy, I request that the Bankruptcy Court notify everyone involved in the garnishment process. This means your employer, the judgement creditor, the levying officer, and the court that originally issued the judgement. Once everyone is notified, your garnishment will stop!

Because of the devastating effect that a garnishment may have on your personal finances, I can quickly file your bankruptcy case to stop a wage garnishment. Please call my office if you need help stopping a garnishment. My phone number is (916) 333-2222.

September 2, 2014/by Attorney Rick Morin

Chapter 13 Bankruptcy, Chapter 7 Bankruptcy, Creditors

Credit Karma Now Offers Full Credit Reports!

One important part of filing bankruptcy is listing all of your debts. Many of my client ask whether Credit Karma is a good tool for determining their creditors. In the past, I have said no. This was because Credit Karma did not provide enough information about your creditors.

This has changed. Credit Karma is now offering access to your full Trans Union credit report — for free!

If you do not already have a Credit Karma account, you might consider signing up. I use it for my own personal finances. Now that they offer access to your full Trans Union credit report, it is even better.

For each creditor listed in a bankruptcy, I need the following information:

Name of the Creditor
Mailing address
Amount owed
Approximate dates that the debt was incurred
Type of debt

All of this information can easily be found on a full credit report! Therefore, it saves a lot of time for both me and my clients if I have an up-to-date credit report.

Another great resource for free credit reports is www.annualcreditreport.com. This is the government-sponsored website where you can get each of your credit reports once a year for free.

Do not search for “free credit reports” online. Many of the websites that you come across will charge you a fee or even enroll you in monthly credit monitoring. The resources above are the best options for getting your real credit reports for free!

Please call me at (916) 333-2222 if you need help getting your credit report. A credit report is a critical part of preparing to file Chapter 7 or Chapter 13 bankruptcy.

August 3, 2014/by Attorney Rick Morin

Chapter 7 Bankruptcy, Creditors

35 Percent in US Facing Debt Collectors

According to this article in the Seattle Times, 35% of Americans have debts that are being reported as delinquent. That means that debts are being pursued by debt collectors.

The article goes on further to say that the amount of debt delinquency has remained constant since the Great Recession. This is concerning because the economy, at least on paper, has been getting better. This tells me that for the average person, the economy hasn’t improved enough to make a real difference.

There are over 140,000 people employed as debt collectors in America. As many of my bankruptcy clients know, these debt collectors can be very persistent. No one likes a debt collector calling, but especially if the collectors are rude, harassing and do not follow the law.

Now one or two past-due credit card bills are not sufficient to force someone into bankruptcy. However, a large amount of unsecured debt that is delinquent is a typical warning flag for me. This is true if you are struggling to make ends meet because of large debt payments.

As a Bankruptcy Attorney in Sacramento, I stand up to annoying debt collectors and banks that charge sky-high interest rates. I can help a family get a fresh start with their finances in less than four months. A typical Chapter 7 Bankruptcy case here in Sacramento will last about 90 days from the day it is filed to the day the bankruptcy discharge is ordered.

Please call my office at (916) 333-2222 if you have any questions about Chapter 7 Bankruptcy. I am happy to help.

July 29, 2014/by Attorney Rick Morin

Chapter 7 Bankruptcy, Creditors

High Interest Car Loans and Bankruptcy

This article from the New York Times confirms what I often see in my office: many people are being put into bad car loans with very high interest rates.

I define a bad car loan as having two main characteristics: 1) the value of the loan is typically much higher than the value of the car itself; and 2) the interest rate charged for the loan is substantially higher than market rates.

Given the extremely low interest rates these days, I would say that anything over 12% is too much to pay for interest on a car loan.

A person with a high interest car loan will pay many times the “real” price of the car over the life of the loan. This hurts the consumer in many ways. High monthly payments can wreck a budget. And overpaying for a car means less money for other things down the road.

Because of the high monthly payments associated with these high interest car loans, people often fall behind on payments. This leads to a repossession of the car and negative marks on credit reports. After repossession, the lender will typically sue to recover the deficiency balance on the loan. And negative marks on credit reports will make it difficult to obtain good car loans later on. It is a vicious cycle.

As I have discussed earlier, bankruptcy can help in this situation. You can surrender your car in a Chapter 7 Bankruptcy and walk away free-and-clear from the bad loan. Bankruptcy will also eliminate any judgements associated with a deficiency balance. After your bankruptcy is over, you can rebuild your credit and qualify for better car loans that will not cost as much.

Some people may want to keep their high interest car loan even after filing bankruptcy. While this is possible, it is not a very good idea. I don’t like leaving my clients with bad debts on the books even after a Chapter 7 Bankruptcy.

Please call my office if you want to find out how Chapter 7 Bankruptcy can help you get rid of high interest car loans. My phone number is (916) 333-2222.

July 20, 2014/by Attorney Rick Morin

Chapter 7 Bankruptcy, Creditors

Wage Garnishments and Bankruptcy

Bankruptcy can stop and eliminate wage garnishments. This is one of the top reasons people call my office for bankruptcy relief.

A wage garnishment is a process by which a creditor can take money from your paycheck. In California, a typical judgement creditor can take up to 25% of your gross wages each paycheck. This can be devastating to a person’s financial situation.

Before a garnishment can start, a creditor must first obtain a money judgement. To obtain a judgement, a creditor must first sue you.

Many of my clients were sued by a creditor but had no idea they were being sued. This can happen when a person moves and the creditor serves a prior address with the lawsuit. This means that the first notification of the lawsuit is a letter or phone call from your employer saying that your wages are about to be garnished.

Don’t ignore a notice of garnishment from your employer. If you take swift action, we can stop your garnishment and make sure that your paycheck is not affected at all.

Filing bankruptcy immediately stops all collection activity. This is known as the “automatic stay.” Federal law is clear that creditors are not allowed to continue collecting money from a person in bankruptcy.

After my office files a bankruptcy, we reach out to all parties that have pending collection activity against a client. This includes wage garnishment situations. We will notify the County Sheriff’s office, the lower court that issued the judgement, along with a client’s employer. These steps are critical to stopping a garnishment before money is taken from your paycheck.

Bankruptcy is one of the best tools that can be used to stop a garnishment from wrecking your finances. Done quickly and correctly, bankruptcy will help preserve your paycheck and will eliminate unsecured money judgements.

Please call me at the office at (916) 333-2222 if you have any more questions about stopping a wage garnishment in Sacramento.

July 13, 2014/by Attorney Rick Morin