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We take pride in finding creative solutions to complex problems. Following are some examples of the client service we strive to provide. (Please note that they are examples only, and not a guarantee in your particular situation.)
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 The $110,000 windfall. |
The debtor had a home valued at $500,000, and $350,000 total in 1st and 2nd mortgages, which meant there was about $150,000 in equity. The debtor also had more than $180,000 in credit card debt. Selling her home outside of bankruptcy she would still owe $30,000 in credit cards ($150,000 - $180,000 = - $30,000). The debtor attempted but could not fund through her limited income a Chapter 13 plan that would pay in $150,000, even over five years so she could keep her home. The only other option was a Chapter 13 liquidation plan where she would sell her home for the benefit of creditors, but do so over six months with a realtor, instead of an auction, so as to maximize the value and possibly realize sufficient profit to pay her debts and also herself. The home was sold for $550,000. However, credit card debtors had only submitted $90,000 in proofs of claim by the deadline.
Result: The debtor ended up with a $110,000 windfall. By selling in bankruptcy, the debtor, in her Chapter 13 plan, provided for payment to all those who submitted proofs of claim by the deadline. Since only the 1st and 2nd mortgage holders ($350,000) and $90,000 of the unsecured creditors submitted claims, for a total of $440,000, the remaining $110,000 went back to the debtor, and all debts (including those which listed but for which claims were not submitted) were discharged.  |
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| A home at risk -- saved. |
The debtor, hounded by creditors, wanted the quick fix of Chapter 7 bankruptcy, even if it meant sacrificing his home, which had $15,000 in equity, to the trustee. We reviewed his assets and realized that he had a 401K plan, an exempt asset, and in addition, his military retirement plan. Also, a look at the terms of his 401K plan showed that it provided for distributions before retirement in hardship situations. We filed the Chapter 7 and then arranged with the trustee for payment of $15,000 -- the amount of the equity in the home -- from a 401K distribution we got from the administrator (making sure to set aside enough we could pay all taxes at year's end.)
Result: The debtor got Chapter 7 relief in three months, kept his home, and protected his retirement income with his more than adequate military retirement and what was left in the 401K. |
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| The misfiled tax lien. |
The debtor could discharge all her debts under Chapter 7, but there still remained a tax lien which appeared on her credit report causing her problems. We investigated the lien and found that it had been filed in DC. The debtor, however, lived in Maryland and had no property in DC. We filed in court to void the tax lien.
Result: At the first appearance in court, the bankruptcy judge indicated he agreed with us and invited us to file a summary judgment motion before discovery even took place. The tax agency saw the motion and immediately settled. The lien was voided and removed from the public record. |
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| It pays to read carefully. |
The debtor otherwise qualified for Chapter 7, but had a little more than $4,000 in his bank account and no exemptions left to protect it. His bank account clearly would be seized by the trustee. A close reading of Virginia law however revealed that the statute expressly allowed debtors to take non-exempt property, use it to purchase exempt property before bankruptcy, and not be considered a fraud against the creditors. We advised the debtor. He took money from the account and purchased furnishings for his home, backed by receipts, up to the $5,000 maximum allowed by Virginia law.
Result: The debtor protected his $4,000 by converting it into exempt home furnishings, which he was free to keep or sell post-bankruptcy as he wished. |
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| Playing the odds. |
In many states, including Virginia, a home, held as a "tenancy by the entirety," which is standard for homes purchased by a husband and wife, is exempt from creditor process for the debts of only one of the couple. This does not hold if it is a joint debt. In this case, both the debtors, husband and wife, had substantial joint debts, but if they filed together their home, which had significant equity, would have been seized in Chapter 7. Chapter 13 was not a viable option because there was too much equity to pay off with the income they had, even in a five year plan. A closer look however revealed that many of the so-called joint debts on the credit report were misreported. In fact, credit card holders were reporting "authorized users" as "joint debtors." Only one of the debts was probably joint, we figured. The rest belonged to the husband, and even that debt, the husband was willing to contest its validity as a joint debt. A Chapter 7 was filed for only the husband. The trustee did not notice or did not bother with attempting to sell the house for the benefit of the one joint debt.
Result: Attention to detail and some calculated risk-taking pays off. Except for the one questionable joint debt, all the other debts were all discharged. For the one questionable debt that is not discharged for the spouse who did not file, the debtors can decide later, if it ever comes up, to pay it off, litigate it, or pay it off in a Chapter 13 plan. |
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| Getting even with the used car dealer. |
In this case, the event precipitating the bankruptcy was the auto dealership's cashing an old check left by the debtor months before as a down payment on a car. The dealership's act emptied the debtor's bank account and left her short for all her bills. She had to file bankruptcy. Trying to get the original loan documents from the dealership to arrange for a redemption, the debtor encountered resistance from the sales office. Finally getting the documents, she found that her boyfriend's signature had been forged on the documents. While the bankruptcy case was pending, we brought suit against the dealership for the forgery in the bankruptcy court. The violation was clear. The dealership settled.
Result: Often, there are consumer law claims within a bankruptcy that can provide a benefit to the debtor. The bankruptcy court can be a convenient and favorable forum for debtors. In this case, the debtor was discharged of her debt, and through the settlement of the consumer claim, essentially got a free car.
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| Edward Gonzalez specializes in Washington DC Bankruptcy Law, Maryland debt relief, Virginia personal bankruptcy, chapter 7 bankruptcy in Virginia, chapter 11 bankruptcy in Washington DC, Maryland, Virginia credit card debt, Virginia bankruptcy debt, debt elimination, new bankruptcy law in Virginia, new bankruptcy law in Washington DC, new bankruptcy law in Maryland, Virginia bankruptcy lawyer, file bankruptcy, filing chapter 11, filing chapter 7, file chapter 7, file chapter 11, debt collection, debt relief, debt free, debt law, debt help, bankruptcy help, bankruptcy info, money help, money problems, offer in compromise, tax problem, debt problem, foreclosure attorney, foreclosure lawyer, garnishment, garnish wages, tax levy, bankruptcy faq, chapter 7 bankruptcy faq, chapter 13 bankruptcy faq, personal bankruptcy faq, financial problem, stop foreclosure, stop home foreclosure, help stop foreclosure, credit counseling, bankruptcy firm, bankruptcy information,
and bankruptcy advice. Contact Edward Gonzalez, Virginia, Maryland & Washington DC bankruptcy attorney.. |
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