Can I file for bankruptcy if I am the victim of fraud?

Can I file for bankruptcy if I am the victim of fraud?

There are numerous types of fraud that can occur. We have seen situations where another person uses your social security number to file taxes to obtain a tax refund or uses your personal information or to get a credit card in your name.

Sometimes people don’t know this has happened until the IRS notifies them that a tax return has already been filed under their social security number or they pull a credit report and notice that there are credit lines on the report that they have never taken out. In that case you would need to contact the FBI and social security office. In extreme cases, it might require you to re-issue another social security number. Other types of fraud scams occur when a party asks you to send them money or gift cards in exchange for an investment opportunity.

The same situation happens on dating websites when someone starts asking for funds. People take out credit lines of tens of thousands of dollars, then the person disappears with their money never to be heard from again.

Usually, it’s difficult to apprehend these criminals to get reimbursed which leaves no other option other than filing for bankruptcy to eliminate the debt. Fortunately, bankruptcy is an option.

However, it is recommended that you attempt to make payments to the best of your ability for several months to a year to show you made a good faith effort to pay on it prior to filing your bankruptcy case so the creditor does not object.

Is a voluntary repossession still collectable?

Is a voluntary repossession still collectable?

The short answer to that question is yes. It really doesn’t matter whether the car is repossessed by being towed out of your driveway in the middle of the night, or whether you voluntarily and cooperatively turn over the car to the lender because you couldn’t afford to make the payment.

If the lender sells your vehicle for less than you owe on it, you will be responsible legally for paying the difference (otherwise known as a deficiency). This is a little less of a problem in recent months due to car shortages, there tends to be more equity in vehicles than there has been in the past, meaning the lender in many cases can sell the car for more than you owe on it. The good news is that filing for bankruptcy will discharge a deficiency judgment against you.

It is recommended to never trade in a vehicle with negative equity and add it to your current vehicle loan. This forces you as the borrower to be in a position where you cannot sell it for more than you owe on it. Typically, that is usually accompanied with a high monthly payment. It also puts you in a position where if the car has mechanical issues it makes it even harder to get rid of it because you can’t break even if you sell it.

If you do have any questions about prior vehicle repossessions or if you are considering turning in your car, feel free to contact our office to discuss your options.

What is a Bankruptcy Trustee?

What is a Bankruptcy Trustee?

When you file your case both a bankruptcy trustee and a judge are assigned to your case. Their roles are very different. The person with whom you’ll have your 341 hearing is actually the bankruptcy trustee not the judge.

The trustee is usually either an attorney or a certified public accountant that reviews your case and administers any assets to your creditors. For example if you are over the exemption amount by $1,500, you would pay that $1,500 to the Chapter 7 trustee and out of that $1,500 the trustee would collect a fee and they would distribute a pro rata share to any creditors who file claims in your case.

The trustee can also collect any insider payments in the past year (any money that you have repaid to friends or family members) or any gifts over $600 to any one person in the last two years. Its very important for your attorney to thoroughly review all of your bank statements and information to make sure there are no unforeseen issues on what you might have to pay the trustee.

That is also why it’s very critical to tell your attorney 100% of information so you can get proper advice on whether it’s in your best interest to file you case or whether it might be beneficial to wait to file your case. The trustee is objective is to find money to pay your creditors.

Although, creditors may also hire their own attorney to represent their interests. The judge is there to make rulings if there is a dispute between you and the trustee in terms of value of property or any other issue that may arise. In most cases there are no assets to distribute, but the trustee files the appropriate paperwork and the judge orders the discharge of your case.

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