Some Reflections on the Law of Bankruptcy

Letter from 1775 proves bankruptcy is as AMERICAN AS APPLE PIE!

Check out the article written by Attorney Peter Francis Geraci titled, “Some Reflections on the Law Of Bankruptcy.” Read the article below or this article and more at https://www.infotapes.com/Articles.

A year before the Declaration of Independence, the ability to file a bankruptcy case and get a fresh start was prized in America. This letter published in Connecticut, which enacted a bankruptcy law before the American Revolution, written in 1775, proves that. https://quod.lib.umich.edu/e/evans/N05906.0001.001/1:2?rgn=div1;view=fulltext

Among the pearls of wisdom in the letter, which hold true today, there is a common theme: “such a law would be beneficial to the publick, and analogous to reason and our holy religion” In other words, the bankruptcy laws of the United States, allowed by the U.S. Constitution Article I Section 8 that Congress has enacted, are BENEFICIAL, REASONABLE, AND SIMILAR TO HOLY RELIGION!

The letter starts out:

I shall consider this Act in the

FIRST PLACE, As beneficial to the Publick,
SECONDLY, Serviceable in general to the Debtor.
THIRDLY, In general, no Disservice to the Creditor.
FOURTHLY, Agreeable to Reason, and the Genius of our holy Religion.

Other colonies, such as Virginia, were also enacting their own bankruptcy laws. When the U.S. Constitution was enacted in 1787, the power to make a nationwide bankruptcy law was given to Congress. That is why bankruptcy is a Federal statute today, available in every state and U.S. Territory.

The letter points out the evils of not having a fresh start, debtors’ prisons they had in England, advantages to business with a good bankruptcy law, and quotes the Bible, which favors and commands the forgiveness of debt in many places:

of thy Brethren, &c. thou shalt not harden thine Heart, nor shut thy Hand from thy poor Brother;

but thou shalt open thine Hand wide unto him, and shalt surely lend him sufficient for his Need, in that which he wanteth:

If thy Brother be waxen poor, &c. then thou shalt relieve him, &c. that he may live.

If, says JOB, I have seen any perish for Want of Cloathing, or any Poor without Covering; if his Loins have not blessed me, &c. then let mine Arm fall from my Shoulder-blade, and mine Arm be broken from the Bone.

Whoso hath this World’s Good, and seeth his Brother have Need, and shutteth up his Bowels of Compassion from him, how dwelleth the Love of God in him!

My little Children, let us not love in Word, neither in Tongue, but in Deed and in Truth.

When we turn over the Pages of the sacred Volume, wrote from the Mouth of our Divine Master, and there observe the sublime Sentiments of Benevolence, Compassion, Forbearance, Forgiveness of Injuries, and Enemies, &c. enforced by the most powerful Arguments drawn from Life and Death, and the same exhibited in Perfection in his own glorious Person.

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at www.infotapes.com. Bankruptcy laws are in place to help you. Who knows bankruptcy like Geraci Law? Geraci Law has 35,000 5-star reviews since November 2016!

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Hiring Random General Practice Attorney for Bankruptcy Leads to Disaster

Geraci Law concentrates in Bankruptcy: why pay the SAME and not get the NAME

Read the following article written by Attorney Peter Francis Geraci and MORE @ https://www.infotapes.com/Articles

A homeowner hired a local attorney in Algonquin Illinois whose main business is income tax preparation. That attorney failed to avoid a judgment lien attached to the residence. That was in 2015, 7 years ago. After the discharge was entered, the lien remained, and the homeowner discovered it 4 years later, and complained to the lawyer, who filed at least 4 motions to reopen the case that failed. The poor homeowner then hired another attorney to clean up the mess, who also failed.

Here’s what the court had to say about the first attorney: While the court does not do so for every attorney appearing before it, as Maksymonko was unfamiliar to the court and given his repeated errors, prior to the Initial Hearing, the court sua sponte sought to confirm Maksymonko’s status as an attorney authorized to practice before it. It is worth noting here that this court has no bar qualifications or admission process. Attorneys practicing before it must only be members in good standing of the bar of the United States District Court for the Northern District of Illinois. What the court discovered was concerning—that Maksymonko was not a member in good standing of the District Court bar. Apparently Maksymonko was suspended from practice by the State of Illinois on January 23, 2003. As a result, he was reciprocally suspended by the District Court. https://www.ilnb.uscourts.gov/sites/default/files/opinions/BruceK.Probst15bk12654JudicialLienAvoidanceUnder522f60.pdf

Another attorney then appeared and failed. The lien of $92,054.53 is still stuck on the debtor’s residence. All because the homeowner went to an “unknown attorney” who was suspended. You can read the whole sad story in Judge Barnes’ opinion. Geraci Law would have simply filed, and won, a motion to avoid the lien, for most likely $92,000 less than what the homeowner is going to have to pay. Those attorneys who “dabble” in bankruptcy law may sometimes cause big trouble for their clients. In this case, the cost of a “cheap lawyer” was over $92,000.00.

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

How Do I Get Out of Debt?

The question is answered by Attorney Peter Francis non-bankruptcy credit counseling courses. You can watch this and more @ https://www.infotapes.com/Bankruptcy/BankruptcyInformationVideos

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

When Will Creditors Stop Bothering Me?

If you are having trouble with bill payments, you should get a consultation with an experienced bankruptcy attorney before you make more payments to creditors.

Check out Chapter 20 in Attorney Peter Francis Geraci’s “Complete Book on Bankruptcy.” This chapter is below, read more @ https://www.bankruptcybookbypeterfrancisgeraci.com/

CHAPTER #20 When Will Creditors Stop Bothering Me?

The minute the bankruptcy case is filed. In the meantime, don’t talk to them, leave them on the answering machine. If they call you at work, get their info, give them your home number, and say “My employer does not allow calls at work, please call me at home.” These are magic words under the Fair Debt Collection Practices Act that require them to stop calling you at work. You can tell them that!

After we have prepared a petition listing your debts and assets, and prepared answers to required questions about your personal actions in relation to money, the bankruptcy petition is filed with the Clerk of the Bankruptcy Court. Of course, your attorney fee must be paid in full, unless you have made other arrangements. After you have paid your attorney, you pay the filing fee, or court cost. It is about $300.00 (When I started practicing bankruptcy law, in 1974, the court cost was only $30.00.) This must be paid in the form of a money order or cashier check payable to the Clerk of U.S. Bankruptcy Court, since the Clerk does not take personal checks.

After the Clerk has stamped a bankruptcy case number, or docket number, on the petition, notice can be sent out to all creditors that you are under the jurisdiction of the Bankruptcy Court. Then, Federal law requires that all collection action stop.

After you have made up your mind what to do, I generally advise you to stop paying all creditors except the ones which will survive a bankruptcy. If you are having trouble with bill payments, you should get a consultation with an experienced bankruptcy attorney before you make more payments to creditors.

You may be wasting your money right now by making minimum payments on bills that don’t go down after you make the payment, or you may be paying money to creditors that you will get rid of, instead of creditors that you must pay.

It is important to understand that thinking about filing bankruptcy, or even talking about it, is not the same as giving money to an attorney and actually having a docket number assigned by the Clerk of the U.S. Bankruptcy Court. Even giving money to an attorney is not enough. The case actually has to be filed with the Clerk. It is then that the provisions of the Bankruptcy Code which protect you from creditor harassment, bill collectors, wage assignments and lawsuits come into effect.

Those provisions are briefly known as the “automatic stay” provisions. This protection is known as the automatic stay, because the Bankruptcy Code provides that all creditor action is automatically stopped, or stayed, when a petition is filed with the Clerk of the U.S. Bankruptcy Court. This “automatic stay” is truly automatic, and even if a creditor does not know a bankruptcy case has been filed, you are protected from their actions.

For instance, if money is taken out of our paycheck by a creditor after the date a bankruptcy petition has been filed, it must be put back as soon as you notify your payroll department that you were under the protection of the automatic stay provisions of the Bankruptcy Code at the time the money was deducted.

I routinely provide my clients with notices entitled “Automatic Stay”, which state the language of the Code. I mail them to the client when the case is filed, so that the client can notify payroll, if necessary, or tell the docket number to any bill collector who calls. Sometimes clients get these in the mail, and even though we have discussed it thoroughly, they call up and say, “What are all these papers? Do you mean I have to notify my creditors? What am I paying you for?

I then explain again that this is for your benefit, so that you quickly have something in your hand to give to anyone who wants proof that you have filed a bankruptcy petition. Creditors and payroll departments will immediately stop any action if they know definitely that a bankruptcy has been filed.

Problem: Keith has a wage assignment from a finance company, and all his creditor cards are behind and bill collectors are calling him constantly.

The Peter Francis Geraci Chapter 7 or 13 Solution: The filing of any bankruptcy petition stops all creditor action. When Keith’s bankruptcy case is filed, the wage assignment has to stop, and no one can even call him on the telephone.

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com

Student Loan Updates

Student Loan collections to resume in 2022 – read Geraci Law press release and PFG Article!

Geraci Law released the following press release regarding student loans. Read this release and more @ https://www.infotapes.com/Press

As of December 31, 2019, 10,347,000* borrowers were in default or 91+ days delinquent out of 44,865,000 borrowers with outstanding debt, according to Sen. Elizabeth Warren’s April 2, 2021 press release. During COVID, federal student loan interest, and collections, were paused. Will there be a “Jubilee” of forgiveness. Not likely. But there may be relief in bankruptcy for loans over 10 years old if a bill introduced in the Senate on August 21, 2021 passes both houses of Congress. https://abi-org.s3.amazonaws.com/Newsroom/FreshStartAct.pdf

The problem with this bill is that it requires schools with a high default rate to pay to the Treasury up to 50% of the amount forgiven.

In August, the President extended to Jan. 22, 2022, the moratorium that 9 of every 10 student loan borrowers have taken advantage of. Will the forgiveness bill pass before then? Probably not, if ever. Will the moratorium get extended again. Good chance, since the Democrats want to get elected in November 2022. Will student loans disappear? Not likely. Why not? Because America’s higher education gets fat by raising tuition and have students borrow our tax money to pay for a 4 year vacation from work. So the colleges and universities are opposed to any form of student loan forgiveness that would cost them a nickel, or reduce enrollment in super-expensive post-high school education.

What to do in the meantime? Get ready to pay your student loan, since it can’t be forgiven in bankruptcy. No fresh start for you, B.A. in Philosophy!

But wait there’s more!

Attorney Peter Francis Geraci wrote an article titled, “Student Loan Forgiveness for the Permanently Disabled.” You can read this article and more @ https://www.infotapes.com/Articles.

If you are receiving Social Security Disability, the Social Security Administration has determined that you are permanently and totally disabled and cannot engage in meaningful employment. In fact, if you do engage in meaningful employment paying over $500 a month, you are then deemed to be able to work. While you are disabled, you should apply for an “administrative discharge” of any student loan obligation. A family member can help you with this. You do not need an attorney.

You should not think of filing a bankruptcy to discharge student loans, therefore, if you are receiving Social Security Disability. Just inform the student loan servicer that you are totally, permanently disabled, and ask them to forgive the loan.

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com

PFG the Chef!

Attorney Peter Francis Geraci is not only an attorney but a chef. He routinely prepares meals for the office!

Attorney Peter Francis Geraci is not only an attorney but a chef. He routinely prepares meals for the office. Here are some photos of a seafood meal in honor of Florida! Did you know the top counties of oyster production are Franklin, Levy and Wakulla in Florida?

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Debtor’s Prison

Below is an article written by Attorney Peter Francis Geraci, read this and more @ Bankruptcy and Debt Articles | Geraci Law (infotapes.com)

The reason there is a bankruptcy law in the United States is that most of the founding fathers came from England, where there was no bankruptcy law. In fact, many of the members of the Constitutional Convention had personal experience being thrown into debtors’ prison in England. Some avoided debtors’ prison by fleeing to America. Some of the colonies were friendly to people in debt, and some were not. But everyone in 1787 agreed that Congress should make uniform bankruptcy laws. So that is in Article I Section 8 of the U.S. Constitution, our country’s governing law.

Check out https://en.wikipedia.org/wiki/Marshalsea for a description of the most horrible of the debtor’s prisons in London, if you don’t count the one that they dug out under the river Thames. Charles Dickens novel Little Dorritt is about a family who grew up in the debtor’s prison Marshalsea, where the father spent 20 years imprisoned for a debt no one could figure out how to pay. https://en.wikipedia.org/wiki/Little_Dorrit There was even some of that in America until 1833, according to https://www.winonapost.com/Article/ArticleID/49823/Swamp-Water-Jurisprudence-Debtors-prisons-havent-gone-away

But now, the creditors can only use the courts to determine if you are liable to pay them, and if you are, use the courts to give you notice before they take your property or bank account. And you don’t have to serve time in debtor’s prison, you can file a plan for debt relief under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. If you live in a state where Geraci Law practices, you can get help from us, just visit www.infotapes.com

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Protect Assets before Filing for Bankruptcy

Before a Geraci law attorney files a case, we analyze the client’s assets, and whether those assets are “exempt” from creditors or not. Read more to see protection that could help you! Need to review your options? Call 800 CALL PFG for a free consult or set online @ https://www.infotapes.com/Bankruptcy/OfficeLocator

Below is an article written by Attorney Peter Francis Geraci titled, “Protect Assets before Filing for Bankruptcy.” This focuses on rent prepayment as allowable in some states to protect otherwise exposed case from creditors. Read more articles by Attorney Geraci at https://www.infotapes.com/Articles

Before a Geraci law attorney files a bankruptcy for a client, we always analyze the client’s assets, and whether those assets are “exempt” from creditors or not. Each state has laws called exemption laws. The U.S. Bankruptcy Code also has exemption provisions. These exemptions state what property is “exempt” from attachment and liquidation by your creditors.

Exemption planning is perfectly permissible! One way to claim an exemption is to convert “non-exempt” property into “exempt” property. This should NOT be done to hide money from creditors, or without the advice of an attorney, but some “exemption planning” has been approved by both state courts and bankruptcy courts. “Homestead” exemptions are usually thought of as protecting real estate, but in some states, when filing an Illinois bankruptcy or an Indiana bankruptcy, personal property such as a trailer used for a residence, or prepaid rent, are permissible exemptions under those states “Homestead Exemptions”.

In some states, such as Florida, exemption planning is forbidden when it comes to personal property. :

Florida Statute 222.30 Fraudulent asset conversions.— (1) As used in this section, “conversion” means every mode, direct or indirect, absolute or conditional, of changing or disposing of an asset, such that the products or proceeds of the asset become immune or exempt by law from claims of creditors of the debtor and the products or proceeds of the asset remain property of the debtor. The definitions of chapter 726 apply to this section unless the application of a definition would be unreasonable.

(2) Any conversion by a debtor of an asset that results in the proceeds of the asset becoming exempt by law from the claims of a creditor of the debtor is a fraudulent asset conversion as to the creditor, whether the creditor’s claim to the asset arose before or after the conversion of the asset, if the debtor made the conversion with the intent to hinder, delay, or defraud the creditor.

There has to be the requisite intent. “[A] debtor can convert non-exempt assets to exempt unless he is motivated to make such a conversion by an actual intent to hinder, delay, or defraud his creditors.” In re Jennings, 522 F.3d 1333 (11th Cir. 2008)

But if you are lucky enough to own real estate, or a trailer, that is your primary residence in Florida, (your “homestead”) you CAN transfer cash or sell that $40,000 classic car that would be taken in a bankruptcy, and pay down your mortgage on your homestead property. FLA does not have a blanket prohibition against exemption planning.

1. 222.30 does not apply to the homestead in FL. See Havoco of Am. Ltd. v. Hill, 790 So.2d 1018 (Fla. 2001) and In re Chauncey, 454 F.3d 1292 (11^th Cir. 2006)

2. There has to be the requisite intent. “[A] debtor can convert non-exempt assets to exempt unless he is motivated to make such a conversion by an actual intent to hinder, delay, or defraud his creditors.” In re Jennings, 522 F.3d 1333 (11^th Cir. 2008)

So, in Illinois and Indiana Geraci Law lawyers think about renters: Is there a homestead exemption for prepaid rent or security deposit?

Illinois Yes – 735 ILCS 5/12 901

Indiana Yes – IC 34-55-10-2(c)(1)

Wisconsin No for homestead, but Yes under wildcard

FL No for homestead Florida Constitution Article 10 § 4 and Florida Statutes Annotated § 222.01 through § 222.05 but yes under wildcard

US Yes, arguably because same language as Illinois and Indiana

Illinois: 735 ILCS 5/12 901: Every individual is entitled to an estate of homestead to the extent in value of $15,000 of his or her interest in a farm or lot of land and buildings thereon, a condominium, or personal property, owned or rightly possessed by lease or otherwise and occupied by him or her as a residence, or in a cooperative that owns property that the individual uses as a residence.

Indiana: IC 34-55-10-2(c)(1): Real estate or personal property constituting the personal or family residence of the debtor or a dependent of the debtor, or estates or rights in that real estate or personal property, of not more than fifteen thousand dollars ($15,000). The exemption under this subdivision is individually available to joint debtors concerning property held by them as tenants by the entireties.

Florida: 222.05 Setting apart leasehold. Mobile home on leased land is exempt.

Federal: 11 U.S.C. (d) The following property may be exempted under subsection (b)(2) of this section:

(1) The debtor’s aggregate interest, not to exceed $15,000 [$20,200 effective 4-1-07. Adjusted every 3 years by section 104.] in value, in real property or personal property that the debtor or a dependent of the debtor uses as a residence, in a cooperative that owns property that the debtor or a dependent of the debtor uses as a residence, or in a burial plot for the debtor or a dependent of the debtor.

Wisconsin 990.01 (14) Homestead exemption. “Exempt homestead” means the dwelling, including a building, condominium, mobile home, manufactured home, house trailer or cooperative or an unincorporated cooperative association, and so much of the land surrounding it as is reasonably necessary for its use as a home, but not less than 0.25 acre, if available, and not exceeding 40 acres, within the limitation as to value under s. 815.20, except as to liens attaching or rights of devisees or heirs of persons dying before the effective date of any increase of that limitation as to value.

ANALYSIS:

Illinois: By plain language, a debtor’s interest in a lease can be claimed as homestead as long as they are living there.

Indiana: Under IN law, a leasehold can be considered an interest in real property or an interest in personal property, but the exemption applies regardless. See In re Coffey, 339 B.R. 689 (Bankr. N.D. Ind 2006)

Federal: debtor’s interest in real or personal property used as a residence under homestead: also can be exempt under federal wildcard

Florida: Homestead is principal residence, must be real estate of something live in on land, like a trail that is owned, whether on land owned or leased. But exemption planning adding to homestead is allowed and can be exempted.

Wisconsin: Prepaid rent can’t be exempted under Homestead definition limited to “the dwelling” no language like Illinois and Wisconsin.

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

Answers to Almost Every Question About Bankruptcy

Did you know Attorney Peter Francis Geraci wrote a book? It’s called the “The Complete Book on Bankruptcy.” His book answers almost any question you may have about bankruptcy.

Did you know Attorney Peter Francis Geraci wrote a book? It’s called the “The Complete Book on Bankruptcy.” His book answers almost any question you may have about bankruptcy.

The best part? The book is FREE and available online. You can click https://www.bankruptcybookbypeterfrancisgeraci.com/ to read the entire book and learn about the differences of Chapter 7 and Chapter 13.

His book answers questions like:

What happens to my credit score if I file bankruptcy?

Will My Employer Find Out if I File Bankruptcy?

What can bankruptcy do for you?

When Will Creditors Stop Bothering Me?

Bankruptcy and Divorce, Alimony, & Child Support

Bill Consoli dation Scams

Chapter 13 Debt Repayment Plans

Dial 1-800-CALL-PFG for a free phone mini-consultation, or make an appointment online 24/7 at http://www.infotapes.com. Bankruptcy laws are in place to help you. Who knows bankruptcy like Geraci Law? Geraci Law has 30,000 5-star reviews since November 2016!

Can I Get Rid of a Vehicle By Filing Bankruptcy?

Article written by Attorney Peter Francis Geraci. Read more of his posts at https://www.infotapes.com/Articles!

Can I get rid of a vehicle by filing bankruptcy?

Sometimes you just don’t want a vehicle. It may be worth far less than you owe, or it may be a junk that costs too much to repair. So the question is, how do you get rid of it and get something else? You’re probably not going to just get rid of the vehicle and walk or take the bus. So there are a variety of situations, and you need good legal advice before you make a false move.

Title loans Do you have an old vehicle with a title loan? If you do, the title loan company has a lien on the title. They will want you to pay them before they release the title. If the vehicle doesn’t run, or has been in an accident, you can’t junk it unless you get the title. Title loan companies seldom will take a vehicle back, rarely even repossess vehicles, because they don’t loan you enough money to make it worthwhile. If you file a bankruptcy, we can provide that you surrender the vehicle, then file a procedure called a motion to exempt and redeem. The court values the vehicle, and all you have to do is pay the value of the vehicle to the title company in which they are required to give you the title. This works very well when you have a junker is only worth $100 salvage value.

Under water Second situation that is very common is that you have a vehicle where you have a loan on it, in the loan payoff is much more than the vehicle is worth, and you don’t want it. Let’s say you bought a used car, and it’s now worth $8000. But you have 40 payments of $350 left to pay, or $14,000, the payoff and that depending upon how long you’ve financed it for, might be as much is $11,000 or $12,000. So if you wanted to give the vehicle back to the finance company, they would sell it at auction, probably $4000, and soak you with the auction costs, if you credit for the $4000 sales price, and you’d end up owing 8000 on the repossessed vehicle. Chapter 7 filing can eliminate that $8000 deficiency.

So Chapter 7 works very well when you owe a lot more than the vehicle is worth. If you want the over financed vehicle in a chapter 7, sometimes, we can make a deal, and a reaffirmation. So you can either surrender a vehicle that’s over financed and eliminate the deficiency, or possibly we can negotiate a better deal in bankruptcy, but you have to be willing, under Chapter 7 to surrender it if they don’t give you a better deal. There is another option called 722 redemption, similar to the junker, but if the value of the vehicle is $8000, you have to come up with the full value of the vehicle, or finance it, and if you do not come up with the $8000 722 redemption, you probably be financing it at 30% interest which is a terrible deal and you’d be right back where you started.

Chapter 13 The third situation involves keeping the vehicle, and filing chapter 13 to pay what the vehicle is worth, if the vehicle is over two and half years old, and even if it’s not 2 ½ years old to pay it at the prime rate +2%. Now if that sounds complicated, it is. One problem that we are running into is people are financing vehicles for 72 or 84 months, and then coming in to file a chapter 13, which can only last 60 months. They may even have a 0% interest rate. So if you have a long way to pay on a vehicle, and you’ve already got 0% interest, chapter 13 doesn’t help you. Depending upon your income, it may be wise you can qualify for chapter 7, to get rid of this monster and get a reasonably priced vehicle with a low payment.

There’s a lot more to vehicles in bankruptcy. Geraci law lawyers have filed over 100,000 bankruptcy cases, many of which involve cars, both chapter 7 and chapter 13. If your only debt is a car, you should not be doing a bankruptcy. But if your problem is greater than just the car payment, let’s look at what filing a Chapter 7 or Chapter 13 can do about your whole picture, and where the vehicle fits in.

That’s why you need an experienced Geraci law bankruptcy lawyer to figure all this stuff out.

Read ALL ABOUT DEBT RELIEF at www.bankruptcybookbypeterfrancisgeraci.com.

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CHAPTER #20 When Will Creditors Stop Bothering Me?

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But wait there’s more!

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