Bankruptcy Information

I’m a member of a Credit Union and have several accounts with them.  I’ve heard of this mysterious ‘cross-collateralization’ CLAUSE and thought I would do some investigation so we can all sleep better.  Arizona Bankruptcy Attorney John Skiba wrote, Bankruptcy, Credit Unions & Cross Collateralization Agreements, over at JDSupra, which provides a very brief and technically incorrect overview of Credit Union’s dirty little tricks to get you to pay all your debts owed to them.  What we all need to know is, Can they get away with it?

The term cross-collateralization is not an agreement on its own, but rather it is a clause contained in other agreements that you might enter into with your credit union.  A contract clause is a term or condition that is written into the agreement that becomes part of the contract.  The trouble with these nasty little clauses is that credit unions are the only entities that think they’re a good idea and these clauses are not disclosed to the consumer and buried in the fine print or what we call ‘boilerplate’ language. I lik

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Tags: Credit Union, Union

If you rebuild your credit, three years after your bankruptcy you can get a car loan at a good interest rate.  But you can also get steered into a bad loan by someone who claims to be doing you a favor.  So, with not-perfect credit, you need to shop–shop carefully–for your car loan.

I’m a Virginia bankruptcy lawyer, and I hate to see my after-bankruptcy clients get cheated.

Sadly, many people spend days and hours shopping for a car, and then just take whatever is offered on the loan.  That’s not smart.  Here’s what to do.

Shop as carefully for the car loan as you do for the car.

First, go to your own bank or credit union and apply for a car loan.  See what rate they will give you.

Then, when you go to a car dealership, tell them you have a loan offer from your bank and ask them if they can beat it.  Go with your best deal.

Car dealers make two kinds of loans.  Sometimes the car manufacturer is discounting loans in order to help the dealer sell the cars.  (Obviously no bank will give you 0.0% on a car loan–but the manufacturer, through the dealer, might. )  Those are great loan

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Tags: Car Loan, Loan

Filing for bankruptcy can be a long and tedious procedure, with mountains of paperwork to overcome and a lot of hassles to face. Once you’ve decided that bankruptcy is your only option to financial freedom, what can you expect?

Credit Counseling:

Under the Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) of 2005, every person filing bankruptcy in the United States must first undergo extensive credit counseling with a court-approved counseling service.

A Big Decision:

You may have thought that deciding to file for bankruptcy was the biggest decision you’d have to make. Wrong! Next, you must decide which type of bankruptcy to file: Chapter 7 (which is a straight or liquidation bankruptcy that clears you of all your debt), or Chapter 13 (which is a repayment plan). Those wishing to file Chapter 7, must prove to the courts that they make under the average income in their state and can not repay their debt, regardless of any repayment plans devised by the courts. Read full post…

Tags: Bankruptcy, Bankruptcy Expect

Do you think?

Like millions of Americans who take their old car to the dealership and trade it in for a new one when they still owe money on that old car, they wind up financing both the amount owed on the trade-in along with the new car loan.  This transaction leaves the consumer with negative equity in their new car and the dealership is risking that negative equity if the consumer later files for bankruptcy.  Recent case law supports the consumers filing bankruptcy and means bad news for dealerships who have made these negative loans.

The 9th Circuit appellate panel in In re Penrod, showed that Penrod owed more on the Explorer than its agreed trade-in value, and this difference is known in the auto trade as “negative equity.” The bankruptcy court ruled that the negative equity portion of the loan could be treated as unsecured debt. The Bankruptcy Appellate Panel affirmed this ruling, and the three-judge panel affirmed the BAP.  The Court denied a rehearing on an earlier ruling, allowing the Debtor’s negative equity in their automobile to be treated as unsecured debt in their Chapter 13 Plan. 

This is good news for consumers who owe more money than their car is worth. What thi

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