On behalf of Kratter & Gustafson, LLC posted in Chapter 7 on Thursday, May 17, 2012
Most Connecticut residents have probably heard of Nadya Suleman, also known as "Octomom." Suleman has 14 children but is most famous for giving birth to octuplets. Recently, her financial troubles have apparently become too much, and she has filed for Chapter 7 bankruptcy protection. She claims she has about $1 million in debt and wants to start over financially. Suleman stated that difficult decisions have led her to the decision to file for Chapter 7 bankruptcy.
She owes money to several people including her father, the water department, DirecTV, a private school and also is behind $30,000 in rent to her landlord. Chapter 7 will require that all of her non-exempt assets are liquidated to pay off everyone she owes before her debts are able to be discharged. Suleman, unfortunately, is no stranger to financial troubles.
On behalf of Kratter & Gustafson, LLC posted in Foreclosure on Wednesday, May 9, 2012
Connecticut homeowners facing foreclosure may be interested in a recent headline about the housing crisis of 2007 and how mortgage servicers are attempting to clean up their acts. During the crisis, countless homeowners were subjected to messy processes that often resulted in serious damage, including inappropriate foreclosures Those currently facing foreclosure may now have more options, thanks to the federal government stepping in and beefing up industry standards.
Mortgage servicers largely took the blame during the housing chaos. When the housing crisis began, servicers were overwhelmed by the sheer number of defaulting mortgages, but when the federal government stepped in, the situation finally began to improve. The housing industry collapse led to a virtual halt in foreclosures across the nation that banks are only now catching up on. The settlement has caused the major servicers to improve quality across several areas, including communication with borrowers and execution of foreclosure documents.
On behalf of Kratter & Gustafson, LLC posted in Personal Bankruptcy on Wednesday, May 2, 2012
Due to the ebbs and flows of the economy, which still appears to be struggling, many Connecticut residents continue to have trouble paying their mortgage, credit card bills and other financial obligations. As we have discussed before on this blog, filing for bankruptcy can help a person who is deep in debt with managing that debt and ultimately gaining a solid financial footing. In that vein, readers may be interested to learn how retirement accounts are treated in bankruptcy.
Although it varies from state to state, a retirement plan such as a 401(k) or company pension is typically fully protected in bankruptcy. This means that no matter how much money is in the plan, no creditor can touch it. Additionally, a 2005 federal law extends those protections to an IRA or Roth account. The protection is limited, though, to $1.17 million.
On behalf of Kratter & Gustafson, LLC posted in Credit Card Debt on Thursday, April 26, 2012
One of the predicaments that Connecticut residents may face is that of credit card debt. Unfortunately, credit card debt can be intensely stressful due to the constant harassment of creditors. However, it is possible to gain control over the debt by taking some simple steps.
It can take years to pay off a $1,000 credit card debt if you only make the minimum payments each month. The minimum payment mostly goes toward paying off only the accumulated interest, meaning that the debt burden remains essentially the same. It is therefore important to make larger payments on the debt, and if you have multiple cards, start with the one that has the highest interest rates. The size of your payments can grow as you begin to gain control over your finances.
On behalf of Kratter & Gustafson, LLC posted in Personal Bankruptcy on Thursday, April 19, 2012
In 2005, the U.S. bankruptcy laws were changed so as to prevent abuse of the process. That is, the change in the law was meant to prohibit those who could afford to pay their debt from filing for bankruptcy. However, one unfortunate consequence of the 2005 reforms is that it made filing for bankruptcy more expensive.
Although it may strike some Connecticut residents as surprising, it does cost money to file for bankruptcy. As a result of the increase, which put filing costs at about $1,477 as of 2007, more and more people have been using their tax returns to get started. As the average tax refund was $2,913 last year, the refund may more than cover the filing costs. What that also means, though, is that there is often a spike in filings around this time of year.
On behalf of Kratter & Gustafson, LLC posted in Personal Bankruptcy on Wednesday, April 11, 2012
Many Connecticut residents and others across the country are starting to bounce back from the effects of the Great Recession and are beginning to get their finances in order. In the last few years, many individuals filed for bankruptcy because of financial conditions out of their control. Yet, according to the latest financial information, the number of personal bankruptcy filings is expected to keep decreasing for at least the remainder of 2012.
The first quarter decrease in consumer bankruptcy filings -- between 8 and 10 percent below the levels for the same time period in 2011 -- is credited to the nation's overall economic improvement. The current year is also projected to have fewer consumer bankruptcies because of continued economic growth.
On behalf of Kratter & Gustafson, LLC posted in Personal Bankruptcy on Tuesday, April 3, 2012
After declaring bankruptcy, a Connecticut resident may be able to file a debtor's discharge. A debtor's discharge is a legal maneuver that is designed to prohibit creditors from contacting the debtor, such as through phone calls or by mail. Yet even after filing for bankruptcy and a discharge, a person may still find themselves continuously harassed by the creditor.
When that happens, the creditor is most likely acting illegally under the provisions of the Fair Debt Collection Practices Act. After a discharge is filed, there is a legally-binding injunction in place that prevents the creditor from continuing or commencing a collection action. Breaching that injunction may make them civilly liable to the debtor.
On behalf of Kratter & Gustafson, LLC posted in Chapter 13 on Thursday, March 29, 2012
As part of a multi-state settlement with some of the biggest lenders in the nation, many Connecticut homeowners may have some amount of debt relief coming to them. Part of the settlement includes a deal to reduce the principal on many mortgages across the nation. Moreover, Bank of America also announced a separate deal to write down underwater mortgages of about 200,000 homeowners to market value. Yet mortgage modifications are not always in a homeowner's best interest, and sometimes a Chapter 13 bankruptcy may be preferable.
When a lender reduces the principal on a mortgage, that can create issues for people who have two or more mortgages on their home. That is, if a lender reduces the amount owed on the first mortgage to at or below the home's market value, then the homeowner may find him or herself on the hook for the second mortgage even if they declare bankruptcy. This is because in a bankruptcy, when the first mortgage is reduced, it may no longer be possible to wipe out the second mortgage.
On behalf of Kratter & Gustafson, LLC posted in Personal Bankruptcy on Thursday, March 22, 2012
Many Connecticut residents may know firsthand the stress associated with a large debt burden. Indeed, it may feel overwhelming, if not paralyzing. Fortunately, though, U.S. federal law allows for debtors to escape from their debt burden by filing for bankruptcy.
Of course, a personal bankruptcy does not necessarily permit someone to totally escape his or her debt. Rather, it allows them to gain control over it, putting them back on the path toward financial independence under the protection of a court. Yet, one form of debt is notoriously difficult to discharge, and more families than ever are suffering from it: student debt.
On behalf of Kratter & Gustafson, LLC posted in Foreclosure on Thursday, March 15, 2012
Readers of this blog may recall a story about a large, multi-billion-dollar settlement that the attorneys general of 49 states reached with major banks across the country in regards to improper foreclosure practices. Recently learned, though, is that Bank of America has reached a separate deal as part of the overall foreclosure settlement that could reduce its penalties while providing substantial relief to thousands of homeowners. The deal could very well provide much needed help to homeowners in Connecticut.
About 200,000 homeowners would be affected by the separate deal with Bank of America. Under the terms of the deal, these homeowners could see substantial reductions in the principal amount owed on their mortgage. In fact, the reductions could total more than $100,000, which would be a sigh of relief for many.
