Monthly Archives: October 2014

Will you trade or barter your bankruptcy services for a title to a car/truck, guns, paintings, or trade for services?

Actually yes.

I normally charge between $1,000 and $1,800 for a chapter 7 bankruptcy.  However, almost every case is $1,000.

In a chapter 13, I usually charge $500 up front, but the court eventually awards me between $3,000 and $3,500 in fees.

Almost every client pays cash up front, but there are exceptions:  I am typing this blog entry on an oversized Sony Vaio laptop which is so huge and powerful that my kids call it “Mongo.”  It was traded to me by a businessman who needed to file bankruptcy on his office supply business but was cash poor.  In our bankruptcy paperwork, I listed my attorney’s fees as follows:

Attorney’s Fees:  trade for laptop, approx. value $1,400.

At the 341 Meeting of Creditors, the trustee asked my client if he thought it was a fair exchange for services, and thankfully, my client said, “Yes!” emphatically.

Another client works for a rather good artist who has offered to trade a limited edition painting (signed) in exchange for a bankruptcy for his employee.  I have no idea what it is really worth, but it should go nicely on the opposite wall from my standard “The Prayer at Valley Forge” by Arnold Friberg that every Utah attorney seems to own.

So yes, I will file a bankruptcy in exchange for things.  tradeI have 9 children and one more one the way.  I would be glad to take the title to a car or truck for one of my highschool drivers.  I am not a big hunter, but I have no problem taking guns in trade for my services.  The same can be said for various other physical items like computers.  I am leery of trading services for services because I have heard too many horror stories from other attorneys who tried this, but I will accept things in exchange for my services.

I have even run the following KSL ad recently:

$1,200.00
Free chapter 7 bankruptcy in TRADE for car/truck for my highschooler.
American Fork, UT 84003 | Oct 1, 2014
Add to Favorites »

I am an experienced bankruptcy attorney with 9 children (yes 9!).
I need another car/truck for one of my highschoolers.

I will trade a free chapter 7 bankruptcy in exchange for a car that will pass safety/emissions. You will pay the court filing fee.

If the car is good enough, I can pay the $335 filing fee to the court as well.

Call/text/email

801-980-1313
robertspaynelaw@gmail.com
www.robertspaynelaw.com

and the following craigslist ad:

Free chapter 7 bankruptcy in TRADE for car/truck for my highschooler. – $1200 (West Jordan)

© craigslist – Map data © OpenStreetMap
(google map) (yahoo map)

1990 geo metro odometer: 200000 fuel : gas transmission : automatic title status : clean

I will trade a free chapter 7 bankruptcy in exchange for a car/truck for my highschooler that passes safety/emissions. You will still pay the court filing fee.
If the car is good enough, I will pay the $335 court filing fee as well.

It doesn’t have to be pretty.

www.robertspaynelaw.com
do NOT contact me with unsolicited services or offers

 

 

Can I discharge overpayments of veteran’s (V.A.) benefits in bankruptcy?

Yes.

In bankruptcy, there are generally two kinds of debts, priority debts (which survive bankruptcy) and everything else.

Priority debts include:  most taxes, student loans, and child support/alimony, to name a few.  A more complete list is here at 11 U.S. Code § 507 – Priorities

Everything else includes:  everything else, from medical bills to judgments to old cell phone contracts.

This means that if you have received overpayments of your V.A. benefits, you can list these overpayments in your bankruptcy and receive a discharge of those debts.  That being said, it is possible that the VA will file a special kind of bankruptcy lawsuit in your case called an adversary proceeding.  If they file this lawsuit, they will try to argue that you received the benefits fraudulently, trying to defraud or deceive the federal government.  If they win this suit, then you will still owe the overpayment, however, the lawsuit is not as common as you would think.  If they don’t file the suit, you receive a discharge of those overpayments.

If I take out more student loans for a better education, won’t I get a higher salary and be able to pay them off?

No.

This isn’t exactly a bankruptcy question, but I see the results of this question every day.  Our common thought here in the U.S. has been that you must get more education, a better degree,  maybe an advanced degree, and a higher starting salary.  This isn’t necessarily true.  In fact, I will go out on a limb and say that your B.A. in Communications will land you a lower starting salary than an underwater welding certification.

I file bankruptcy for too many clients with $40,000 to $210,000 in student loan debt.  Their income is low enough to qualify for a chapter 7 bankruptcy, but since they can work, those student loans are nondischargeable, meaning that they will survive the bankruptcy.  I recently filed a case for a client with 3 masters degrees, two education-related and one in gender studies.  She has been unable to find a job to match her student loans of well over $100,000.

I don’t do financial planning for clients, but in an attempt to stave off more business for myself and my competitors, I recommend getting your education without taking out student loans.  If you need student loans, then keep them as minimal as possible.  And yes, I understand that there are a million exceptions to this, but in general, student loans cannot be discharged in bankruptcy and will haunt you for the rest of your adult life.

Additionally, I work over the budget and paystubs of clients every day and have compared incomes of literally thousands of people.  Having a college degree doesn’t guarantee that you’ll make more money than a tech worker or blue collar Joe.  A little focus on your career path at the outset will go a long way for you.

This all came home in a recent cartoon my brother-in-law posted on Facebook.  He teaches at a tech school, and his students get their hands dirty in school, get their hands dirty at work, and then put those filthy hands on the steering wheels of their brand-spanking new over-sized pickup trucks to drive back to their families in their clean new homes.

starting salary

If the cartoon offends you, then you’ll probably hate the Mike Rowe Works Foundation as well, which “promotes hard work and supports the skilled trades in a variety of areas.”  An education with no focus really won’t get you  very far.  You need to combine hard work with training in something, but you don’t need school just for school’s sake.

Don’t forget, all of this comes from a guy with a Bachelor’s in English Lit, a minor in Political Science, a year of Master’s work in English Lit, another year of Master’s work in Public Administration, and three more years of a law degree.  A little more focus and a few less student loans would not have hurt me one bit.

What happens to a large business when it files bankruptcy?

I don’t do this kind of bankruptcy.  If your business is a truck, trailer, and 4 lawn mowers, then you’re my kind of case.  If you have hundreds of employees and millions of dollars of inventory, then you need to go to a “tall building” lawfirm and pay through the nose for a chapter 11.

That being said, larger businesses generally follow two paths when they file bankruptcy:

1.  they can file a chapter 11 and attempt to reorganize their debts, or

2.  they can file a chapter 7 and close their doors, liquidating everything.

Take the example of a dollar store called Honks.  The Idaho Statesman reported that the “Last Honk’s stores close after bankruptcy plan fails.”  Honks ran a dollar store, where everything was $1.00.  They started having financial troubles in a down market and eventually sought bankruptcy protection from their creditors by filing a chapter 11.  In a chapter 11 case, the business presents a plan to reorganize its debts and make consistent payments to its creditors.  It couldn’t keep up with its payments and eventually

In addition to shutting down its remaining five stores in Boise; Caldwell; Nampa; Elko, Nev.; and Provo, Utah, Honk’s also laid off its employees and handed over its equipment and store inventory to its lender, Bank of the Cascades, according to court filings.

If Honk’s could have made its chapter 11 work, it would have saved the business, but those ongoing payments are very hard to make.

On the other hand, in a chapter 7, the business closes its doors and allows the bankruptcy trustee to sell off its remaining assets and distribute them equally between its creditors.  This kills the business quickly and allows for an orderly distribution of whatever assets remain.

In the end, Honk’s had to close its doors.  If you go to their corporate website, they sum it up briefly as follows:

We are sorry to say that over the next few months we will be closing our doors. Thanks for the many memories and great deals we’ve had over the years.