Friday, September 26, 2014

What Happens to Utility Bills in Bankruptcy?

        Utility bills are treated just like the other non-priority unsecured debts such as credit cards and medical bills. When a person files bankruptcy, any arrearage in one’s utility bill is eligible for discharge. Furthermore, Section 366 of the Bankruptcy states that a utilty company may not shut off water, electric, or any service for a debtor’s filing of bankruptcy. Therefore, your bill goes to zero and you start anew. But from then on, your utility company may shut off service if you miss any future payments like normal. Additionally, the utility company has the right to require a reasonable deposit, in order for you to keep your service.

       One thing you must watch out for, however, is filing a chapter 13 case. When a person files a chapter 13 case, the non-priority unsecured creditors are not allowed to charge additional interest, penalties, or other charges. The balance at the date of filing, is the balance until discharge. But, if a chapter 13 case gets dismissed, then the creditors are allowed to add to that balance, all the interest that accrued while the bankruptcy was active.

        That means, if you filed bankruptcy, lasted two years in a payment plan, and your owed utility bill was $500 when filed, then if the case gets dismissed, you will owe on top of the $500, an additional two years of accrued interest and late fees! That could easily take the $500 bill up to $800 or more. The highest I’ve personally seen was about $1,800. That also means your lights will likely be turned off if your chapter 13 case gets dismissed.

For more information be sure to call a Nashville Bankruptcy Attorney in Nashville TN.

Monday, August 4, 2014

Nashville Used Car Lot Sued for Consumer Protection Violation

One of our cases broke into the news last year. In that case, our client bought a car from a used auto lot. It turns out that at the time of the sale, the car had a salvage title; the car lot had not even applied for a new title at the time of sale, which is against state law. Additionally, our client made a cash down payment of $3,500 which the dealer denied.  The General Sessions court found that the dealer’s actions violated the Tennessee Consumer Protection Act and awarded money damages to our client.
UPDATE:  The dealer appealed, and we recently had a second trial, this time in the Circuit Court of Davidson County, who also found that the dealer violated the Tennessee Consumer Protection Act and awarded our client money damages. (Case No.  13C4572)
If you have a dispute about a vehicle you purchased, new or used, give me a call for a free case evaluation.
The link to the news story is below:
Please also know that previous results are not a guarantee for future results of a case. These results are not to be relied upon to form an expectation that the same results could be obtained for other clients in similar matters. Please see an attorney to go over your own specific factual and legal circumstances if you have been involved in a similar case.

Tuesday, November 26, 2013

What is Balance Transfers of Credit Card Debt?

Transferring the balance of a credit card debt is simply paying off high interest credit cards or loans with lower interest credit cards.

The benefit of transferring a balance is that one can substantially lower the interest rate of the debt, which helps one pay off the balance in less time and with less money. The negative of a balance transfer are the fine print. A “low interest” card may only last a few months or change at anytime.

Be sure to also avoid “cross default clauses” of the fine print which state that if you become late on anything you owe, including a phone bill or medical bill, then the interest rate goes from the low to a high default rate.

Make sure that the low rate does not only apply to new purchases or will be considered a cash advance and carry a higher rate.

Therefore, make sure to read all of the fine print and ask these questions to a customer service representative before transferring a balance for a lower rate.


Friday, September 27, 2013

Is it Possible to Reverse a Foreclosure?

          The short answer: Maybe.  If the foreclosure was conducted improperly then there are limited remedies, but only in a few rare situations can a reversal be granted. And those remedies are not statutory based.  Our office has successfully reversed a foreclosure.  In that instance the homeowner received a letter from her servicer stating that they would not foreclose on her property within the next 20 days because she was in a modification trial period.  The letter also stated that if foreclosure proceedings had begun (which they had) they would be ceased.  Well our client relied on this letter and decided not to file a bankruptcy, which would’ve ceased the foreclosure.  After the foreclosure the bank tried to evict her but we showed up to court with that letter and the bank agreed to reverse the foreclosure. 

           There is also another way in which a foreclosure can be reversed, but this is more of a technicality.  For any real estate to change owners, the sale must occur in writing.  It is not possible to transfer real property without a writing.  Thus a foreclosure is effectuated in writing through a Trustee’s Deed.  Well, in Tennessee, foreclosures occur as an auction at the court house steps.  The problem is that just because a winner was selected at the highest bid and the gavel struck does not make the property sold.  It must be conveyed through a Trustees Deed.  Many foreclosures result in the lending bank buying the property themselves for the amount of the loan.  When that is the case there is usually no hurry to prepare a Deed and it may take them 7 days, 10 days, or 2 weeks to sign a Trustee’s Deed.  If that is the case and a bankruptcy is filed before the Trustee’s Deed has been signed, then the sale never actually occurred.  So while technically the foreclosure was not reversed, it was still prevented after a winner was selected and “sold” during an auction.

Monday, September 9, 2013

What is the Automatic Stay?

The Automatic stay is one of the primary reasons that people file for bankruptcy. The automatic stay is a legal protection that is given to a debtor when he files bankruptcy. No court order is needed to create the stay, hence the term “automatic.” The instant a petition is filed, federal law makes it illegal for creditors to attempt to collect the debts of a debtor. If a creditor knowingly takes action against the debtor then the creditor will be liable to the debtor for any damages, attorney fees, and costs incurred against the debtor, plus possible punitive damages if the violation is egregious.

Therefore, the automatic stay stops all foreclosures, repossessions, law suits, levies, harassing calls, letters, etc. Furthermore, if a car has been repossessed filing bankruptcy within 10 days can actually allow a debtor to get the car back.

Now some restrictions may apply depending on the debtor's individual circumstances, but the automatic stay is a great benefit to filing bankruptcy.