Damon Duncan

Can I Recover Workers’ Comp Benefits if I Had a Heart Attack at Work?

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Like many areas in the law, it depends.  If the heart attack occurred during your normal work activities, usually the heart attack injury is not compensable under North Carolina workers’ compensation laws.  For the injury to be compensable, the worker must show the heart attack was caused by some unusual or unexpected event and was … Read more

Can I Get a New Apartment Lease During Bankruptcy?

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You sure can! It may be a bit more difficult to find a place that will rent to you than it otherwise would be, but be patient. Depending on the rental agency, you may be required to pay a higher security deposit or even be required to have a co-signer. It really depends on the rental agency.

Family with Young ChildThere is a chance that you may have to apply to several places before you find one that works. When applying, be up front with the apartment complex or rental agency about the fact that you filed bankruptcy. This will help because then it will not be a surprise to them when they go to check your credit. You may want to try smaller complexes or even rentals from individuals. They may be more willing to accept you even though you filed bankruptcy. They may not even check your credit, but that is up to them. Larger rental agencies are often required to do credit checks so you will find that it is common practice for large apartment complexes to do credit checks before they let you rent.

You may want to ask if you qualify for a short-term lease, maybe six months or so. This could provide you the opportunity to prove you are able to make the rent payments each month. After that period, they may be able and willing to provide you with a longer lease.  The ability to prove you have a steady income and are able to make the payments will hopefully indicate that you will be able to afford the rent.

If you have rented before, make sure to point out your good rental history. Be prepared that they may want to verify this so be sure you are truthful. Additionally, take the time to shop around. It may take some time to find the right place but be sure you do not settle for just anything. Even if you have filed bankruptcy that does not mean that you can only rent substandard housing. Be patient and shop around and hopefully you will find the right place for you.

If you suspect that you will have difficulty being approved to rent after your bankruptcy filing, you may want to go ahead and sign up for a lease prior to the filing of your bankruptcy petition. This would really apply to those who are surrendering their home in their bankruptcy and are certain they will need to find a new place to live. By signing a rental lease prior to filing your bankruptcy, you are avoiding the bankruptcy showing up on your credit report when the apartment complex checks your credit.

The good news, though, is that you do have options regarding finding a place to rent after bankruptcy, and you will be able to find the right place for you and your family. Be patient, do your research, and keep your mind open to all options.
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What is a Preference in Bankruptcy?

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Preference in a bankruptcy means that you are showing favoritism to one creditor over the others.  In other words, you treat one creditor better than another. For an example, let’s say that you received a bonus check of $1000 on top of your regular pay. You have a large number of creditors and you owe them all a considerable amount of money. However, you do have a charge card to your favorite department store and you choose to take your bonus check to pay off the $1000 balance on that account since you really like that card and want to be able to continue using it. Well, the court has a bit of a problem with that!

Dad & Son Playing

The court views this as “preferential treatment” and views it as you should have evenly spread out that $1000 by paying a little bit to each creditor instead of giving the entire $1000 to one specific creditor. Upon your bankruptcy filing, the bankruptcy Trustee will then contact that creditor (in this example is your favorite department store) and make them return the money to him so that he can divide it out equally among ALL of your creditors.

When you meet with your attorney prior to your bankruptcy filing, you need to discuss which creditors/debts you have been paying and the amounts that you have paid. You will also want to have an idea or timeframe as to when you will be filing your bankruptcy, so your attorney can advise you whether or not to pay any creditors and how much you should pay if you choose to pay them.

A normal credit card or medical bill can be deemed as preferential treatment but do not confuse this with your secured debts such as a home loan or car loan. If you are filing a Chapter 7 and plan on keeping your house and/or car, these loans MUST be current at the time you file your bankruptcy and kept current during your time in bankruptcy in order for you to keep them without any problems arising. Making payments to secured creditors above everyone else is not viewed as a preference.

Another important thing to keep in mind is that preferential payments to “insiders” – family members or friends – are also viewed as problematic. There can be consequences to paying family members or friends prior to your bankruptcy filing, so if you have done so or are considering do so and are also considering bankruptcy, you should talk to a bankruptcy attorney immediately. Depending on the circumstances, the bankruptcy Trustee may require the friend or family member you paid the money to to return that money to the Trustee so he can distribute it to your creditors. Therefore, it is very important to discuss this situation with your attorney prior to your bankruptcy filing.

If you are considering paying a debt prior to your bankruptcy filing, contact your bankruptcy attorney first to ensure that you are not going to cause problems later on in your case.
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Will Automatic Drafts With My Bank Stop After I File Bankruptcy?

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With the ever improving online banking that is available through most banks, it is possible to pay almost all of your bills without ever stepping foot outside of your home.  There is no doubt filing bankruptcy can impact every situation of everyday life, but what about paying your bills?  What happens if you have everything … Read more

If I Choose To Voluntarily Turn In My Car, What Should I Do?

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If you are behind on car payments or decide you will not be able to make the payments in the future, you can decide to voluntarily turn in your vehicle. We encourage our clients not to voluntary turn in their vehicle prior to filing bankruptcy, but we will discuss that in more detail below.

Loving CoupleWhat if you do choose to voluntarily surrender your vehicle? How should you go about doing that? If you are going to voluntarily turn in your car you will need to call the finance company and set up a time where you can bring the vehicle to them. It is critical you get a business card or use some kind of identifying method to show who you left the vehicle with. You do not want to just drop it off and walk away without knowing exactly whom you turned the vehicle in to. In the past we have heard of dealerships not reporting the vehicle as turned in to the finance company. This means you would still owe on the car. Sometimes people will choose to voluntarily turn in the vehicle instead of having the finance company come to their home or place of work and repossess it. By doing so they can avoid the feeling of not knowing when their car will be picked up. It is on their terms instead of the lenders.

Once you turn the vehicle in to them, the creditor will then sell the vehicle. You will receive a statement from the finance company after the vehicle is sold. You will still be responsible for the difference between the amount you still owe for the vehicle and what the sales price is. That debt does not automatically go away just because you do not have the vehicle anymore. The amount you owe is called the deficiency balance and this is a debt that can be included in a bankruptcy filing. This occurs whether the vehicle is voluntarily surrendered or repossessed.

However, it is important to know voluntarily turning in a vehicle prior to bankruptcy filing will still go on your credit report as a repossession. This means you will still have a negative mark on your credit report and do not forget you will still owe the deficiency balance even if you voluntarily surrender the vehicle and do not file bankruptcy. We typically encourage our clients to surrender their vehicle within the bankruptcy instead of the voluntary surrender prior to bankruptcy. If you surrender the vehicle within your bankruptcy a repossession does not appear on your credit, and you can still eliminate the remaining debt within your bankruptcy. If you are planning to file bankruptcy and have already voluntarily surrendered your vehicle, be sure you discuss the voluntary surrender with your attorney so the deficiency balance can be properly taken care of.
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Upside Down or Under Water on Your Home? Bankruptcy May Help!

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With the decline in the housing market many people find they are “upside down” or “under water” on their home.  In other words, do you owe more for the house than what it is worth?  If that is your situation and you have two or more mortgages, you may find that Chapter 13 bankruptcy is an option you have never considered.

Young Family in Front of House

Let’s look at an example where Chapter 13 bankruptcy may help you:

You have a home with a fair market value of $150,000.  Three years ago the house was worth $200,000.

You have a first mortgage on the home for $160,000 and a second mortgage or HELOC for $40,000.  In other words, you owe more on the first mortgage than the house is worth.

You can easily make the first mortgage but the second mortgage is more than you can afford.

You know it will be several years before the house is valued at $200,000 again.

As a result, you are stuck making two or more mortgage payments on the home and it isn’t worth it.

You are contemplating a short-sale which leaves you without a home and a “ding” on your credit or you are considering walking away from the home and letting the mortgage company foreclose.

If this is your situation, you should consider a Chapter 13 bankruptcy.  With the Chapter 13 bankruptcy, you may be able to “strip” or eliminate the second lien/mortgage.  Within the bankruptcy, you are able to eliminate the lien on the house as long as you complete the Chapter 13 bankruptcy within the three to five years required by the bankruptcy laws.  The number of years you must be in the bankruptcy will depend on your specific situation.  Let’s use the example above to see how it might work for you.

Your first mortgage is $1,100 per month.

You have $10,000 in credit card debt, a $2,000 personal loan and $750 in medical bills.

You owe $40,000 on the second mortgage that may be eliminated in your Chapter 13 bankruptcy.

You meet with the bankruptcy attorney and determine that you qualify for a Chapter 13 bankruptcy and it appears you are eligible to strip the second lien in the bankruptcy.

Your Chapter 13 plan payments are estimated at $1,300 – $1,500 including your first mortgage and other debts including the second mortgage.

Once the bankruptcy is filed, your attorney will file a lawsuit or adversary proceeding against the mortgage company or they may be able to simply file a motion to strip the lien.  Each bankruptcy court has their own requirements, so you should speak with your bankruptcy attorney to determine what must be completed in your case.

Once this process (either adversary proceeding or motion) is completed, the bankruptcy court will issue a judgment or order that voids the second lien on the house as long as you complete and receive a discharge in your Chapter 13 bankruptcy.

Once the bankruptcy is discharged and completed, three to five years after you file, you will resume payments on your first mortgage but the second mortgage and the other debts listed in your bankruptcy are eliminated and you will not be responsible for making payments on these debts in the future.

As a result, if you decide to sell your house in the future, you will only be required to pay off the first mortgage.  The second mortgage is no longer a factor.

This is obviously a simplified approach, so you should seek the advice of a bankruptcy attorney to see if stripping your second or third mortgage or HELOC is an option for you.  You are thinking this must be too good to be true otherwise someone would have mentioned this to you before!  It really is fairly simple.  This is just one way a Chapter 13 bankruptcy may assist you in keeping your home when you are upside down or under water.

If I Become Depressed Due To An Incident on the Job Can I Collect Workers’ Compensation Benefits?

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Depression caused by an accident or incident on the job is usually compensable.  However, there must be a medical doctor or a licensed psychologist opinion that the depression was caused by the incident or accident.  You cannot claim you feel depressed without a professional opinion substantiating the claim of clinical depression. For example, a new … Read more