Can I get a fee waiver for my chapter 7 bankruptcy?

The short answer: it depends on your monthly income and how many dependents you claim.

One of the most difficult things for people planning to file for bankruptcy is finding enough money to pay an attorney to represent them. On top of attorney’s fees, you will have to pay the court a filing fee which is currently $306. That may not seem like a lot of money to some but if you are considering filing for bankruptcy chances are you are carefully watching where every dollar goes.

Fortunately, if you are below 150% of the poverty line you may be eligible for filing fee waiver. You’ll still have to pay your attorney’s fees but at least you can shave off a few hundred dollars off the cost of your bankruptcy.

The amount is determined by the U.S. Department of Health and Human Services (DHHS). Whether you qualify depends on how many people are in your household. The more people in your household, the higher that 150% of the poverty line climbs. The number also depends on which state you live in, although DHHS uses the same numbers for the 48 contiguous and D.C. while Hawaii and Alaska get their own numbers.

At the time of this writing this table shows the maximum monthly income you may have in order to qualify for a fee waiver.

Persons in family unit Monthly Income
1 $1,458.75
2 $1,966.25
3 $2,473.75
4 $2,981.25
5 $3,488.75
6 $3,996.25
7 $4,503.75
8 $5,011.25
Each Additional Person $507.50

Links:

How do I download my taxes from the IRS?

6355404323_ac5691e105_oAs a bankruptcy attorney I feel like I am always chasing down documents. There are a number of documents that need to be gathered and filed as part of your bankruptcy whether it is chapter 7 or chapter 13. Most documents that are needed to be filed with a bankruptcy, like taxes and pay stubs, are given to me in paper form.

When I get these documents from my clients I have to scan them to my computer and make sure they are in PDF format because everything that is filed now, whether it is with the federal bankruptcy court or the trustee’s office (in Utah at least) is filed electronically.

Often times clients know that they have filed their taxes but they just can’t remember where they put them or they have lost their taxes. I have good news for all my clients and for everyone filing for bankruptcy and for their attorneys. The IRS has a service called “Get Transcript” that allows you to download your IRS transcripts directly to your computer! This means that if you have a computer, or even probably a smartphone, you can log onto this website, download your IRS transcripts, and forward your transcripts on to your attorney without using a single piece of paper. And the best part about it is that it’s absolutely free.

Links:
“Get Transcript”, download your tax transcripts from the IRS

Fisker sold for $149.2 million

1024px-Fisker_Karma_PHEVFisker has been sold for $149.2 million to Chinese carmaker Wanxiang. Fisker experienced financial troubles which eventually led to the company filing for chapter 11 bankruptcy. While the sale seems to be fairly certain it still needs to be approved by US Bankruptcy Judge Kevin Gross.

While Fisker has failed to gain traction in the market, Tesla has proven to be a viable competitor in the automotive world, paying off its Department of Energy loan of $465 million and watching its stock price rapidly.

Payday loan bill flies through House Committee

imgresThe Utah Legislative Session is up and running and the bills are passing. One of the bills of interest to me is HB127. This bill is designed to reform many of the practices of Payday loan companies. Today it sailed through the House Business and Labor Committee by a vote of 12-0.

Why is this of interest to bankruptcy attorneys you ask? Just the other day I was talking to an individual who was telling me about her debts and she proceeded to list off seven payday loan companies that she hadn’t repaid. What I see happening are people obtaining payday loans in desperation to pay off debt hoping to be able to pay off the payday loan in a couple of weeks only to realize that they don’t have the money. Seeing that big interest is going to hit (the average interest being 474% for payday loans) they decide to get another payday loan to pay off the previous loan which then cannot be repaid. The cycle repeats itself. Wash, rinse, repeat. Soon they find themselves in a financial avalanche that they will never recover from.

Here are some of the more important provisions of the bill:

-Payday loans, usually for two weeks, currently can be renewed or “rolled over” for up to 10 weeks, after which no more interest may be paid. The bill would then give borrowers 60 days to pay off the loan before lenders could take any action against them.

-The bill would require lenders to file any default lawsuits where borrowers live or obtained the loan. Many lenders now make borrowers waive that right, and lenders do such things as sue people living in St. George in an Orem court — making cases difficult to defend.

-The bill would require lenders to do at least minimal checking to see if borrowers can afford the loans and rollovers, including looking at pay stubs, doing a credit check or looking at repayment history of previous loans.

-The bill would require the industry to report to the state how many loans go the full 10 weeks, how many end up in default, and the amounts involved. Advocates now claim that default rates are high while the industry claims it is low, and the data should show what is true.

What do you think? Is more regulation of payday loans good policy?

Do I need to hire a bankruptcy attorney?

waterblaster-pressure-washer-gx390The short answer is ‘no’. Anyone can file his or her own bankruptcy. Perhaps the wiser question is ‘should I hire a bankruptcy attorney?’ The short answer is ‘yes’. Allow me to explain.

When I was in college I ran a mobile detailing business with a friend of mine. I borrowed my dad’s pressure washer, bought a truck, and bought the necessary equipment and I went out and found some clients. The business was successful while it lasted but in the end my friend and I ended up at different colleges and we gradually wound up the business.

A couple of years later my dad went to go use the pressure washer on our driveway. When he tried to use the washer, only a weak stream came out. Frustrated, he came to me since I had used the washer so much in the past.

Thinking I was up for the challenge, I decided to have a go at it. The engine seemed to be working just fine so I turned to the pump, a complex copper piece attached to the engine. I was a little nervous but I started taking the pump apart. Inside I found all kinds of pieces that somehow worked together. I tried my best to remember where everything went but there were just too many pieces and I started to forget how to reassemble the machine.

I sat there on the garage floor surrounded by various pieces. I couldn’t find the owner’s manual so I had to download a PDF from the Internet. I ran out of time that Saturday but I thought I had a pretty good idea of which piece needed to be replaced. I emailed the corporate headquarters of the company that made the actual pump and ordered a part from them.

A couple of Saturdays later I found sometime and I attempted to put the pump back together. Needless to say, it took much longer than I had expected. I ran into all kinds of weird mechanical hiccups. Finally, at the end of that Saturday, I was able to put everything back together and I decided to give the pressure washer a test run. I was really hoping the darn thing would work because I had just invested two Saturdays into fixing the washer and I had spent some of my dad’s money buying a new part. If it didn’t work, I was going to be ticked. The moment of truth was here. I fired up the engine and squeezed the trigger. A powerful stream came shooting out of the machine. I was relieved that I didn’t have to spend another Saturday troubleshooting that pressure washer.

Now you might be asking at this point, what does a pressure washer have to with the price of tea in China? More specifically, what does a pressure washer have to do with bankruptcy? I’ll tell you.

There are several repair shops near my house that know how to fix pressure washers. I could have easily taken the washer to one of those shops. It would have been easier. It would have saved me two Saturdays. True, it would have been more expensive. But most importantly, I would be more certain that the job would get done.

Sometimes people ask me if they need an attorney to file bankruptcy. Again, the answer is ‘no’. Generally you don’t need an attorney to represent yourself in legal matters. But I generally would not recommend going at it alone. When I was fixing that pressure washer, I decided to do it on my own because the risk was low. If I didn’t fix the washer, someone else could probably fix it. Even if I destroyed it, we could go buy another one for a couple hundred bucks.

You and your family’s economic well-being is a whole “nother” story. Can you really afford to lose your house or your car? Can you afford to have your wages garnished? Do you really want to roll the dice on these things? Of course you can always re-file should your case get dismissed but there are consequences to filing again. And if you have to file again, you have to pay the filing fee again. At this point, you aren’t really saving much money at all and you have to do all the work. The work takes you longer than it would an attorney because it is something you are new at and you don’t know if you are doing it right. The list goes on and on.

Do you have to hire a bankruptcy attorney? No. Should you hire a bankruptcy attorney? Yes.