How Do I Request Medical Records?

To review a possible medical malpractice case or nursing home injury or neglect case at Duncan Law we must have the injured person’s medical records reviewed by an expert witness.  These are usually an expert nurse and/or a physician. For a medical expert to give a thorough review of your case it is important they have the opportunity to review the medical records.

To obtain a copy of the medical records you must request the records from the medical care provider. To provide these medical records to you, your health care provider must follow government privacy laws called HIPAA.  HIPAA is the Health Insurance Portability and Accountability Act of 1996.

First, you must qualify to receive the medical records. If you are the patient requesting your medical records, you can sign a HIPAA release and receive your medical records. If you are not the patient, you must have a formal release signed by the patient or have the legal authority to obtain these records.  The legal authority is usually granted by a power of attorney document properly executed by the patient (not just a hand written note signed by the patient). If the patient is incapacitated, you may have to obtain a legal guardianship or a court order to acquire the records. If the patient has died you must be the executor of their will or be appointed administrator of their estate by the clerk of the court or a judge.

Filling Out A Document

Second, after qualifying to receive the medical records you should make a written request to the medical care provider to provide the medical records. The medical provider may have these records stored electronically offsite away from their physical location, so it may take several days to obtain these records. If the records are stored offsite, the medical care provider should provide the records to you within 10 calendar days.

If the records are available at the facility, they should be able to have a copy made for you within 24 hours of your request. Do not expect to walk into the medical facility and they make you copies while you wait.

When you request the records, the staff may ask you why do you want a copy of your medical records? First, you are not required to answer that question. It is your medical records and you do not have to answer that question. However, any time you ask for medical records, especially from a doctor’s office, it raises flags and alerts the doctor to a possible problem. The staff will usually inform the doctor or nursing home administrator of the request and they go into “defensive mode”. In the past, some medical providers have been known to illegally change the medical records to “cover up” a mistake they have made.  Be aware this could happen. If the medical records are on site, you may ask the person in charge of medical records to pull the records so that you may look at the records on site before they are copied.  Once you have reviewed the records, you may then ask for copies.  After receiving the records, review the records and determine if any changes were made. If changes were made, notify your attorney immediately and dispute this with the medical facility.

Many medical providers will “discourage” you from obtaining the medicals by charging you an outrageous price per page to “copy” these medical records. Some providers will attempt to charge you a $1.00 per page.  If you have 600 pages due to an extended hospital or nursing home stay that could become very expensive. Fortunately, in North Carolina, there is a state law that prohibits excessive copy fees.  It is North Carolina General Statute  90?411, which states:

“A health care provider may charge a reasonable fee to cover the costs incurred in searching, handling, copying, and mailing medical records to the patient or the patient’s designated representative. The maximum fee for each request shall be seventy?five cents (75 cents) per page for the first 25 pages, fifty cents (50 cents) per page for pages 26 through 100, and twenty?five cents (25 cents) for each page in excess of 100 pages, provided that the health care provider may impose a minimum fee of up to ten dollars ($10.00), inclusive of copying costs.”

Once you’ve received your medical records contact your medical malpractice attorney or nursing home injury lawyer and provide them with the records so they can be appropriately reviewed.

Bankruptcy v. Deed In Lieu of Foreclosure

Foreclosure Sign in Front of HouseClients have frequently asked us what is the difference between a deed in lieu of foreclosure and a bankruptcy?

First, a deed in lieu of foreclosure (DLF) is when the homeowner signs over and transfers the deed to the home to the mortgage company without the legal process of a foreclosure. Most people believe this will look better on the credit report than a bankruptcy or a foreclosure. This is possible, however a DLF does not wipe out the pre-existing debt on the home as a bankruptcy would do. In other words, you as the homeowner would still owe the deficiency debt on the mortgage, the DLF just saved the mortgage company the time and expense of foreclosing. It does not eliminate the debt you owe them! This is the same on a “short sale”.

The mortgage company will eventually sell the home, usually at a loss, and demand you pay them the difference in money unless you have agreed in writing to wipe out the debt still owed. This debt is usually several thousands of dollars and possibly tens of thousands of dollars.  The difference in what you owe the mortgage company and the amount they sold the house for is called a “deficiency balance”.

If you do not pay the mortgage company the money they have demanded, they could sue you for the difference they lost from the sale of the home. The mortgage company will usually win the lawsuit because you do owe them the deficiency balance unless you have reached an agreement with them saying that you will not owe the deficiency balance.

In the alternative, the mortgage company could believe the debt is “uncollectable” from you and forgive the debt.  You may think, “that’s great!”  However, there’s a catch. The mortgage company will try to “write off” these thousands of dollars of loss on their taxes by filing a 1099(c) with the IRS eliminating your debt to them.  The drawback is the IRS will consider this “forgiven” debt to be gross income if it totals more than $600. In other words, you don’t have to pay back the full amount of the debt but the IRS will tax you on that forgiven debt as gross income. For example, the mortgage company losses $50,000 on the sale of your home.  The IRS will expect you to pay taxes on the $50,000.  If you are in the 25% tax rate, you would have to pay $12,500 in taxes to the IRS.  If you do not have the $12,500, the IRS could start assessing you penalties and interest. That could, in turn, lead to the garnishment of your paystubs!

In contrast, a bankruptcy will usually eliminate any deficiency balance you owe the mortgage company.  Therefore they cannot sue you or attempt to collect the deficiency balance you owe them. The IRS usually cannot tax you for the deficiency balance you owe the mortgage if you file the bankruptcy.  If you file bankruptcy, you are considered insolvent, and the IRS must waive the tax liability on the 1099 if you are deemed insolvent.

In conclusion, consider your options. However we believe surrendering the home in bankruptcy and wiping out any deficiency balance and eliminating your other unsecured debts, such as credit cards and medical bills, is usually a better alternative than a deed in lieu of foreclosure.

How Long Does a Judgment or Lien Last?

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A judgment initiated by your Creditor can be issued by the court of North Carolina when a debt becomes past due.  This judgment is enforceable for a period of ten (10) years from the filing date.  A judgment may be “renewed” so to speak, by filing a Complaint prior to the expiration of the ten (10) year effect of the original judgment.  That Complaint must be filed and served upon you, the Debtor/Defendant, the same way the original judgment was issued.  Technically, it does not “renew” the old judgment.  Rather, it is a new judgment based upon the existing debt that extends from the original judgment. This so called renewal can only be done once.

A lien may be placed on your home, automobile or personal property.  A judgment lien is a way of collecting on your unpaid balance to a Creditor.  Until you, the owner of the asset, take some action to sell, transfer, or refinance the home, car or personal property; the lien will remain attached to the item.  Once you sell, transfer, or refinance the item, all judgment lien holders may be entitled to collect on their judgments, depending on the nature of the situation.

By paying off a judgment the judgment will be considered satisfied. This means that you will get something from the creditor showing that the judgment was paid and you will no longer have the judgment levied against you. However, most people can’t pay off judgments against them. In this situation bankruptcy may be a good consideration.

By filing bankruptcy you will have the opportunity to wipe out judgments against you. If there is a lien against you then your attorney could file a Motion to Avoid a Judicial Lien as well. Regardless of the legal process, it is important to satisfy the judgment by paying it off or by filing bankruptcy to have it removed.

What To Look For In A Credit Card After Bankruptcy

Credit Card DebtYes, credit cards are the evil culprit for many folks who have had to file bankruptcy, but credit cards are not entirely terrible.  Having a credit card helps in many ways to help build your credit, you just need to get the right one that is tailored for you and your needs.  For someone who is coming right out of a bankruptcy, all you wish to do is move forward and a credit card is one of your first steps in establishing good credit.  There are a few things that you need to look for in one when you are ready to start establishing credit.

What are the start up fees?  Are there hidden fees?

Many cards do not have an application fee, but will have annual fees that will be incurred in the future and in many cases, you must pay it when you first sign up for the card.  You will want to do thorough research on this, because in some cases, the annual fee may be low, but the hidden fees may hit you hard!

What is your interest rate?

This is a given.  Just like you would not want to buy a car with a high interest rate, you do not want a card with one either.  Once you leave a balance (i.e.: you do not pay the card off immediately after using it) your credit card company is going to charge interest.  Even if you are not using the card, they will still charge interest on the balance of the card.

Keep your balance low

Credit bureaus do not determine your score solely by whether or not you have made your payments on time.  They also look into your balances.  You do not want to have a high balance on a card because it will bring your score down.  A high balance is how much you owe on the card.  If you have a card that only has a $300 credit limit, you need to try to keep your balance owed on the card under $150.

Get a secured credit card

This is sometimes, but not always, a great way to start to establish credit.  You will have to put money “down” on the card (which is what your credit limit is based upon, for example, you put $300 down, then your credit limit would be $300.)  You will need to look into it whether these cards report to the credit bureau.  If they don’t, the card won’t help you establish payment history.

What Financial Statements are Required for a Business if I’m Filing Bankruptcy?

If you are self-employed or own your own business, you should prepare monthly financial statements to understand how your business is performing.  Realistically, financial statements are often the last thing a small business owner worries about.  He or she is usually more concerned about how to make the next sale or generate the next contract.  However, when an individual files bankruptcy, the financial statements of the business are required to determine the profitability of the business as well as the value of the business.

For our purposes, there are two basic financial statements for your business that will be required when you file personal bankruptcy:  a profit and loss and a balance sheet.

Better Business Bureau Logo

The profit and loss reflects the profitability of the business over a period of time.  It takes into consideration the business’s income, expenses and the resulting profit or loss.  The period of time could be weekly, monthly, quarterly, annually, etc.  For the bankruptcy, we will want the profit and loss for each of the six months prior to filing bankruptcy as well as a current period year-to-date.  For example, if you are filing bankruptcy in April 2011, you would need the profit and loss statements for October, November, and December 2010 as well as January, February and March 2011.  In addition, an April 2011 year-to-date profit and loss would also be required.  We will look at the component of a profit and loss in more detail in another blog post.

The balance sheet reflects the value of the company at a point in time.  It is usually considered the most important financial statement for the business, but oddly enough, it is often overlooked by everyone except for your accountant and banker.   The balance sheet takes into consideration the profit or loss for the company as well as the assets and liabilities for the company.  A balance sheet is sometimes referred to as the thermometer of the business, since you can use it to check the business’ “temperature” to determine if it is “healthy – 98.6” or “sick – 102.”  The balance sheet reflects the true value of the business at a point in time, such as March 30, 2011.  If on March 30, 2011 your business has a value of $10,000, you should be able to sell the business for $10,000 if you have a willing and able buyer.  We will look at the components of a balance sheet in another blog post.

Preparing and understanding the financial statements for your business can be an overwhelming task.  Many small businesses purchase accounting software to help them prepare the financial statement or they may hire an accountant to assist the business owners.  Let’s look at a simplified version in the blog post, The Basics of Understanding Financial Statements for Your Business.

Can I Open A New Bank Account After Filing Bankruptcy?

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Yes. There is no law that prohibits a debtor from opening a bank account after filing bankruptcy. However, if you owed money to a bank (i.e. for a credit card, loan, overdraft fees, etc.) and they were included in your bankruptcy, chances are you might have a difficult time opening an account with that institution.

You may need to shop around in order to find a bank that is willing to open a new account.

Prior to filing bankruptcy, if you have an account with a bank that you owe money to, your attorney may recommend that you close that account and open a new account at a bank where you have not borrowed funds or owe money. Generally speaking, it is best to open a new bank account before you file bankruptcy to ensure that you have a bank account with an institution who you do not owe money to.

How To Get Financing For A House After Bankruptcy?

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Many people assume that because they have had poor credit and needed to file bankruptcy to get their fresh financial start that their ruined credit will prevent them from financing and purchasing a home. That is not necessarily the case but certain factors will affect the ease and timing of a new home purchase.

The Waiting Period

Family-in-Front-of-HouseBankruptcy will remain on your credit report for up to ten years but that doesn’t mean you have to wait that long to finance a new home. Through the thousands of cases that we have filed over the years we have seen numerous clients be able to purchase a new home as little as two years after filing bankruptcy. However, that doesn’t necessarily mean that you will get the best rates for your mortgage so soon after bankruptcy. Generally, you can get good rates after four years depending on whether you experienced a foreclosure, deed-in-lieu of foreclosure, or a short sale of your previous home.

The FHA requires as little as 3.5% down after two years to qualify for a loan. Some lenders may even qualify you just six months after bankruptcy but will do so with a higher interest rate and down payment. Fannie Mae and Freddie Mac, the two privately owned companies who dominate 90% of the conventional mortgage industry and are heavily regulated by HUD, have a variety of waiting periods based on various factors. If extenuating circumstances exist such as job loss, serious illness, severe injury resulting from an accident, or death, Fannie Mae and Freddie Mac’s waiting period is 3 to 7 years after foreclosure. Without extenuating circumstances, the waiting period is 5 to 7 years to obtain a conventional loan. If you want to buy after a deed-in-lieu of foreclosure (the exchange of the deed to your house for a considerably smaller sum than what it would cost the bank to go through a lengthy and expensive foreclosure process) the waiting period is 4 to 7 years or 2 to 7 years with extenuating circumstances. You must wait two years after a short sale, i.e. your lender agrees to the sale of your home for less than you owe on the note. Your new home purchase must be a principal residence, not a vacation or rental home.

Improving Your Qualification for Financing a New Home

Bankruptcy, foreclosure, deed-in-lieu of foreclosure, and short sales will have a negative impact on your credit score. Anyone who tells you otherwise isn’t telling you the whole truth. However, you can use the time between filing your bankruptcy an getting a new mortgage to rebuild your credit which, in turn, will improve your financing options.

If your credit reports shows open and overdue balances, contact all three credit reporting agencies and insist that your debt be shown as included (and therefore wiped out) in the bankruptcy. Make sure any other errors on your report are also corrected.

You might want to get a secured credit card, which gives you a credit limit equal to the amount you deposit in the bank. It may only be a $200-$500 limit but it erases any danger of running up your card to uncontrollable levels. Pay your credit card bill every month on time and often the secured credit card can be converted to an unsecured card in 12-18 months for good credit behavior.

Installment loans can help rebuild your credit too. Be prepared for very high interest rates on vehicle loans at first but they can also be refinanced within a few years of good credit behavior. Also, student loan (not discharged in bankruptcy) repayment can be another good way to restore your credit by paying them on time.

For more information on how to rebuild your credit after bankruptcy review our 6 Steps to Rebuilding Credit After Bankruptcy blog post series. This will be important to helping you reestablish your credit so that you can achieve the best financing rates possible for your new home purchase.

Budgeting After Bankruptcy: Step #5 – Use Technology to Help You

Step #1: Determine Your Average Monthly Income
Step #2: Know Your Expenses
Step #3: Create a Balanced Budget
Step #4: Review Your Budget Regularly

Step #5: Use a Technology to Help You

Step #5: Use Technology to Help You

By this time you’ve completed the “meat and potatoes” steps (Steps 1 through 3) that allow you to create your budget and you should be reviewing your budget regularly (Step 4). Now, how can we make following your budget and gaining your financial freedom even easier? Let’s use technology!

Laptop IconI’ll admit it – I’m a huge technology guy. I use it in all kinds of areas of my life and I think we can leverage the power of technology to make our lives much easier. There are a ton of different pieces of budgeting technology. Here are a couple of our favorites:

Mint.com: This is probably my favorite of all of the online budgeting tools. Mint.com allows you to link your bank account to a budget. It uses 128-bit SSL encryption to protect your information – that’s the same security technology that banks use to protect your online banking. Mint.com will pull your bank account information and categorize what has been spent into different categories. You can then set goals (based on your budget) and it will track your progress towards reaching those goals. One of the best features is that you can look at your budget on any given day and see how much you have spent on each category (food, personal care, bills and utilities, mortgage / rent, etc.) and how much more you have to spend for that month. This is a great way to continually monitor your performance in a visual and easy to understand way. The best thing – Mint.com is free. You can sign up and get started in less than 10 minutes, and they also have iPhone and iPad applications.

Wesabe.com: Wesabe.com isn’t a whole lot different than Mint.com. I think Mint.com is a little bit better at being an overall budgeting package but what I really like about Wesabe.com is it ties in the presence of an online community. In other words, when you sign up for an account you can ask questions and discuss your budget with others. We have seen that people have a greater chance of success when they can voice their accomplishments and potential hurdles with others.

Another option is to create a Microsoft Excel template. This is easy to do and can be done in less than five minutes. However, I really like the way Mint.com and Wesabe.com show you what you are spending in a graphical format. It’s one thing to be told what you are spending money on but to actually be shown is a whole different ballgame.

In the future we expect the two tools discussed above and other online money management programs to use historical data and demographics, including geography, to show you what other people in a similar situation are spending each month.

Regardless, you can use online tools to simply the budgeting process. Do the legwork to put a great budget together then use one of these, or any other online tool to help you lower your expenses and increase your savings and the amount of money in your pocket at the end of each month.

Budgeting After Bankruptcy: Step #4 – Review Your Budget Regularly

Father and Daughter on ComputerStep #1: Determine Your Average Monthly Income
Step #2: Know Your Expenses
Step #3: Create a Balanced Budget
Step #4: Review Your Budget Regularly

Step #5: Use a Technology to Help You

Step #4: Review Your Budget Regularly
The first three steps in this series are really the “meat and potatoes” of creating a budget after filing bankruptcy. This next step discusses techniques that can be used to ensure that you stick to your budget and the financial freedom you have worked for.

Once your budget is completed it is critical that you regularly review your budget. Contrary to what many people think – your budget should not be set in stone. Instead, your budget is a malleable and ever changing guide. It is important to change your budget as it becomes necessary.

Your budget will largely mirror your life events and goals. If you have children who are preparing for college then you may find it necessary to set aside a little money each month for college savings. Similarly, you may have a car that is 15 years old and you know that you need to be saving for a new car. Your budget will need to reflect your goals and priorities.

It is also important to review your budget regularly because in doing so you may be able to catch “cash leaks” or other areas of the budget that are understated. Catching these pitfalls of your budget early will allow you to adjust your budget and will greatly increase your chances for success.

During the bankruptcy process we will speak with many of our clients about budgeting post bankruptcy. There are areas within your bankruptcy, such as Schedules I and J, which may help you draft your own budget. I typically encourage my clients to take their budget and put it on their refrigerator or next to their computer. Your budget should be strategically located in a place where you will look at it often so you can measure your success or be aware of potential stumbling blocks. Again, this really comes back to that “financial honesty” that we discussed in prior posts.

Reviewing your budget regularly will allow you to maximize your chances of success and, just as important, increase your surplus at the end of each month.