by Thomas McAvity on February 5, 2012
The FTC recently imposed the second-steepest penalty ever imposed on a debt collector. According to the New York Times, Asset Acceptance, one of the largest collection companies in the country, recently agreed to pay a 2.5 million penalty to settle charges that company deceived consumers in the process of trying to collect debts.
I suppose that this is supposed to be good news and maybe even an indication that the federal government is finally poised to take action against an industry that nightly leaves thousands of grandmothers and single mothers across the country in a state of terror, waiting for collectors to make good on their false promises to sic the sheriff on them or have them imprisoned. However, given the profitability of the debt collection industry, the penalty doesn’t even rate as a slap on the wrist.
by Thomas McAvity on January 22, 2012
An article in today’s New York Times at contains a discussion of a recent study which strongly suggests that bankruptcy attorneys have been disproportionately channelling their African American clients into Chapter 13 Bankruptcies rather than Chapter 7.
It is unclear why this is taking place. Though there is a great deal of overlap, Chapter 13 Bankruptcy meets very different needs than does Chapter 7 Bankruptcy. It is entirely possible that a greater portion of a given ethnic or racial demographic could find Chapter 13 to be a better solution than Chapter 7. However, the Study does seem to suggest that racism, however unconscious, is a more likely cause.
by Thomas McAvity on January 21, 2012
Given the horrible weather confronting bankruptcy clients in the Seattle area, I thought it might be a good time to mention that if weather resuls in the closing of court facilities, a weather Notice will always be posted on the court’s website at http://www.wawb.uscourts.gov/.
Bankruptcy hearings are held in several different locations and conditions may differ between Seattle and Tacoma and among the remote hearing locations of Vancouver, Marysville and Port Orchard. In the event that any hearing location within the district is unavailable due to inclement weather, the judges may decide to continue those hearings to another date.
by Thomas McAvity on January 13, 2012
Bankruptcy filings declined by nearly twelve percent in 2011 from the year before. There were approximately 1.4 million bankruptcies filed overall. Roughly seventy percent of those filed cases were Chapter 7 Bankruptcy cases and about a third were Chapter 13 cases. While both Chapter 7 and Chapter 13 filings declined, Chapter 7 filings declined more than Chapter 13s.
by Thomas McAvity on January 7, 2012
In the years after a Chapter 13 Plan is confirmed, circumstances, such as job loss, disability and long term illness, may arise that conspire to keep a debtor from completing the Chapter 13 Plan. When such situations arise, the debtor may request that the court to grant a “hardship discharge.” rather than force the debtor to complete an untenable plan.
Normally a hardship discharge is available only where the following elements are present:
1.) The creditors have received at least as much as they would have received if the debtor had originally filed Chapter 7. Thus, if the debtor filed Chapter 13 because she had 10,000 of non-exempt equity in a home and in her Chapter 13, she paid out less than $10,000 to her unsecured creditors, she would not be eligible for hardship discharge.
2.) The debtor’s failure to submit all the required plan payments is due to circumstances completrely beyond the debtor’s control and through no fault of the debtor; and
3.) Modification of the plan is not possible. Job loss, illness or injury that bars employment sufficient to fund even a modified plan may serve as the basis for a hardship discharge. Opting for hardship discharge is appropriate where modification simply will not work.
