Annie Leibovitz avoids mandatory credit counseling in New York

"Say BAPCPA!"

ABC News reports that Annie Leibovitz reached an agreement with her creditors that, at least for now, staves off the need for a bankruptcy filing.

What if Annie Leibovitz had filed for bankruptcy in New York?

Would she have to go through mandatory credit counseling (cost:  $50) as required by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA)?  Would she have to sit through a class with the huddled masses that tells her how she could have been a little more fiscally responsible with all of her multi-million dollar homes and valuable photograph collections?

The answer is yes, she would be subject to the mandatory credit counseling requirement.  And it wouldn’t matter if she filed for Chapter 7, Chapter 11 or Chapter 13.

However, she would not have to sit in a class with the huddled masses, because the mandatory credit counseling requirement can be fulfilled by online courses as well as over the phone (unlike, say, traffic school).

Hopefully Ms. Leibovitz will not have to file for bankruptcy.  But if she does, it’s good to know she has a few options.  And if she’s reading this, she’s hopefully a bit relieved to hear that if she did need to take the mandatory credit counseling course, she could do it in the privacy of one of her many homes.

Though in the bigger picture, this hypothetical really just helps demonstrate the inanity of the mandatory credit counseling requirement under BAPCPA.  Is a one-size-fits-all-debtors credit counseling course really the kind of help that someone like Annie Leibovitz needs right now?  Probably not.

If you’re seeking bankruptcy help in New York, please feel free to contact me for a free initial consultation to discuss your situation.  Whether you’re Annie Leibovitz or Auntie Em, I’ll help you figure out the best options and strategy available.

Go to www.nybankruptcy.net to learn more about Rosenberg Musso & Weiner LLP and/or to set up a free consultation.

Can I rebuild my credit after bankruptcy in New York?

Yes, you can rebuild your credit within a few years if you’re careful about your finances and pay your bills on time after you’re done with your bankruptcy case.

A lot of people worry about their credit history when they consider filing for bankruptcy in New York.  It’s a legitimate concern and a healthy impulse to raise the question.

However, in the grand scheme, if you’re behind on a lot of bills and unlikely to be able to pay them off over time, then your credit history is likely to suffer regardless of which path you take.  Sure, bankruptcy affects your credit score.  But bear in mind repossessions, foreclosures and collection lawsuits become part of your credit history and remain there for as long as a bankruptcy does (i.e., 10 years).

If you’re drowning under a mountain of debt, then a more logical way to think about it is that filing for bankruptcy is the first step you take towards rebuilding your credit history.  When you file for bankruptcy, the case ends with a discharge.  The discharge gives you a clean slate and the breathing space to get your finances in order.  And regaining control of your finances is the path towards rebuilding your credit score.

Additionally, after your discharge you are suddenly very attractive to certain lenders.  Why?  Because you suddenly have little or no debt.  As a result, most debtors receive new credit card offers after coming out of bankruptcy.  Though it’s important to note that the credit cards generally have stricter standards and more limits than the types of credit cards you might have had previously.  Still, if you need a credit card, and you use it responsibly, then you’ll build up your credit score gradually over time.  In fact, using a credit card and making payments on time over a period of time actually improves your credit score.

If you have more questions about credit cards and credit card debt, or if you’re considering filing for bankruptcy in New York to deal with credit card debt or any other debt, please feel free to contact me for a free initial consultation.  I’ll be happy to answer all of your questions and figure out the best strategy for you to move forward with your financial life.

BAPCPA Man meets Subprimulus!

With permission from Bankruptcy Bill himself, here’s BAPCPA Man #3 where BAPCPA Man meets the ominous-looking villain Subprimulus.

(Click on image to see larger version.)

The cartoon touches on a number of important themes, including:

1. The mandatory pre-bankruptcy credit counseling requirement (addressed in previous post on this blog titled “What You Should Know About the Credit Counseling Requirement.”)
2. The credit industry’s attempt to mislead the country into believing that abuse of our bankruptcy laws was a major problem (which it wasn’t) rather than acknowledging the reality:  that bankruptcy is a necessary social safety net used by regular Americans who face financial circumstances beyond their control, such as medical bills, divorce, unemployment and recession.  (See previous post on this blog titled “Bankruptcy, Social Safety Nets and Planning Ahead.”)
3. Subprime loan companies, who helped get us into this economic mess to begin with, and loan modification companies who scam desperate homeowners and help keep us in this mess.  (See previous post titled “Subprime Loan Modification Companies.”)

The cartoon also shows the correct first step an average person should take when facing serious financial difficulties, which is to meet with an experienced bankruptcy attorney for a free initial consultation, ask all the questions you need to ask and learn all of your options.

If you’re considering filing for bankruptcy in New York, please feel free to contact me for a free initial consultation where we can discuss your situation, answer all your questions and figure out the best strategy to help you benefit from the bankruptcy laws in New York and move forward with your financial life.

Debt management and debt settlement companies invade Twitter-sphere!

Since setting up a Twitter account (http://twitter.com/nybankruptcynet), I’ve acquired a number of followers who are both nice and interesting.

However, there are two categories of Twitter followers who are more persistent than others and who I block every time:

1. Representatives of the oldest profession, and
   
2. Debt settlement and debt management companies

(I apologize for having to put #1 in the same list as #2 as it clearly besmirches the reputation of #1.)

I thought perhaps it was worth taking a closer look at these persistent harassers in the Twitter-sphere.  In deciding which category to focus on, I’ve determined that my New York bankruptcy lawyer background makes me primarily qualified as a commenter on category #2, i.e., debt settlement and debt management companies.

Now let’s take a look at some of my recent Twitter “friends” (so that you don’t have to):

1.  “government_loan” and “_debt_solution” and “debt_secured_”:  It turns out these three are related.  Their feeds consists entirely of cliches and platitudes that most likely are being copied from a proverbs website somewhere.  (Or even more likely, are being posted by an automated software program.)  A click through to the link they provide takes you first to a page that offers a free book of “7 Sexy Twittering Secrets.”  (See?  Not so far off from Category #1 after all.)  And a link at the bottom to “Debt Consolidation Government Loan” takes you to “The Expressway to Freedom from Debt.”  No names of contact people or even of a company name.  Sure, let’s give them control of our finances.  What could go wrong?

2.  Debt1Solutions:  A combination of random posts that are either quotes on the topic of debt or else inane comments about new blogs, e.g., “Blog up about Michael Jackson doctor’s debt problems, could this explain his actions. Debt problems will drag you down.”  Um, thanks.  Most disturbing about Debt1Solutions page is that in the “Website” field, all I can see is “http://[unsafe l…” and the link has been rendered un-clickable by the wholesome folks at Twitter.

3.  bankruptcybgone: Lastly is a Twitter follower who lands right in the middle of categories #1 and #2 named “bankruptcybgone.“ Sounds innocent enough, but its Twitter page is accompanied by a headshot of a rather buxom young woman.  No accompanying links.  Not sure what to make of it other than I don’t think she’s going to have the desired affect on your finances that you may be seeking.

All of this is hopefully telling you what you already know about debt settlement and debt management companies.  Namely, that they’re bad options.

If you are seeking thoughtful, intelligent, strategic help with bankruptcy in Manhattan, bankruptcy in Brooklyn, bankruptcy in Queens or bankruptcy anywhere else in New York, please feel free to contact me for a free initial consultation.  I’ll answer all of your questions and lay out all of your options so that you really do have a “debt solution,” don’t need a “government loan” and are able to make “bankruptcybgone.”

New Bankruptcy FAQ section

Just want to let everyone know that the Bankruptcy FAQ section from our website is now also available on this blog.

In the Bankruptcy FAQ section, you can find answers on the following topics:

• What disclosures must a collection agency provide to a debtor?
• What actions must a collection agency avoid?
• Are there any alternatives to filing bankruptcy?
• Are student loans discharged in a bankruptcy proceeding?
• What effect does a bankruptcy filing have on the collection of alimony and child support?
• Does a bankruptcy discharge eliminate all debts?
• How much property does the debtor have to give up in a bankruptcy proceeding?
• Will a debtor lose his or her home by filing bankruptcy?
• How long are bankruptcy and other credit information included on the debtor’s credit report?
• What happens if the debtor’s salary increases after filing a Chapter 13 wage-earner plan?
• The Bankruptcy Code uses such confusing terminology. What is meant by such terms as preference and fraudulent conveyance?
• How can a debtor determine whether a debt is secured?
• Learn More: Bankruptcy Law

And if you don’t find the answers you’re looking for (or you don’t have time to look), feel free to contact us for a free initial consultation if you’re considering filing for Chapter 7, Chapter 11 or Chapter 13 bankruptcy in New York, facing foreclosure, dealing with preference lawsuits or any other kinds of bankruptcy issues.  We’ll answer all of your questions and help you figure out the best solution for your financial problems.

Don’t believe the hype: Credit counseling services and debt settlement companies

Watch out for credit counseling ads with language like this:

We negotiate to alter your total debt – instantly!

We negotiate your interest rate!

Pay one bill per month while paying off your debt quickly!

One simple monthly payment!

Non-Profit Agency means the lowest fees!

I always strongly advise my clients (as well as everyone else I know) to stay away from credit counseling services and debt settlement companies.  There may be one or two good ones out there, but most are not out to help you and I hear of too many instances where people lose their money and get no benefit.

Oh, and don’t get take in by that “non-profit” status nonsense either.  Just like “organic” doesn’t necessarily mean something is healthy for you (think about organic sugar or butter), being a non-profit doesn’t automatically mean they’re do-gooders.  And they’re definitely making a profit.