Wantland Law

Debt settlement firms pretend they can make creditors settle for “pennies on the dollar”. They claim their service is better than bankruptcy. I usually see them make things worse. These companies are not regulated by anyone. They can, and often do, collect thousands of dollars before providing any services. Sometimes, they take the money and run. A lot of times they can accomplish anything only to say to you “bummer”. Because they make more the longer it takes to settle your debt, they are in no hurry to work things out pronto.

First of all, debt settlement can be done by you just as easy as the settlement firms. If the creditor is not willing to work with you, they’re not about to work with some settlement firm. By getting involved with a settlement firm, the only message you’re sending is that you have extra money to pass out. This makes creditors even hungrier. Remember, debt settlement isn’t the law. Until you involve Courts, you can’t force a creditor to modify their legal rights.

To add insult injury, at the end of the settlement, the money you save is taxable income. So, about the time you’ve dug out all your savings to settle a bill, you get another bill from the government.

Before getting involved with debt CONsolidation, call me. Get real advice from a real lawyer. You owe yourself that much.

Rebuilding credit after bankruptcy is doable…however, you need to do a little work to make sure everything is as it should be.

A common worry I hear from client just out of bankruptcy that credit stuff on their credit reports is wrong. Sometimes things remain as collections on the report that were discharged in bankruptcy. Is this correct? Nope. End of the world? Certainly not. Fixable? Certainly.

The easy fix is to send a note to the credit bureau and the creditor that the debt was discharged by the bankruptcy and should no longer be on the report. Be sure to do in writing. Writing is a pain- I know- it’s also the only proof that you brought it to someone’s attention.

If they still refuse to fix it, the letter is your proof you asked. That proof, along with the motion I would file, would allow the bankruptcy court to sanction the creditor.

Good credit is possible after bankruptcy. With our help, we can get you back on track. Sometimes, just like your bills, you need a little help from us.

Call today. Tomorrow, start working on better credit.

Call us. We can help.

502-716-0000

A lot of clients come to me after being in debt consolidation programs for a while. Typically, they have spent several thousand dollars on “credit counseling” or “debt consolidation”. After months of paying into a program they figure out that their debt has not actually gotten any lower, their credit, once bad, is now destroyed, and they are no closer to a fresh start than before.

Debt consolidation works for some folks. Some people are actually able to take a pile of high interest debt and turn it into one low monthly payment. Usually, these folks have OK credit and are able to get a better loan or have some collateral to offer a lender. Most that I see get put into a “debt settlement program”.

Most “debt settlement programs” or “debt management programs” work something like this…

A person calls an advertisement on late TV. Soon they are paying a few hundred dollars monthly to a debt settlement company. The company sends letters to the creditors asking them to begin negotiations. The credit card companies have a few choices…

They can chose to work with the settlement companies- this means that after the debtor pays into the settlement program for a few months, the debt settlement company will pay off the now charged-off balance to the credit card company. This allows the debtor to get out of the debt for less than the whole amount owed. Sounds pretty good, right?

Not so fast- first, your credit is pretty well shot at this point. Next, your have tax issues at the end of the year. Debt resolved through forgiveness is taxable. That means if you settled $1000 in credit card debt for $500, you get to pay taxes on $500. But, it could be worse.

Sometimes credit card companies decide not to work with debt consolidation companies. This is when the nightmare really begins…

First, your already bad interest rate gets worse. Credit card companies will move you to what is called the default interest rate. This means that the amount you owe each month in interest mushrooms. Next, the balance will be accelerated. This means EVERYTHING you owe is due now. You think this is not a problem because the debt settlement company will fix it, right? WRONG! UNLESS THE CREDIT CARD COMPANY AGREES TO WORK WITH YOU, THE DEBT SETTLMENT COMPANY HAS NO LEGAL RIGHT TO FORCE THE CREDIT CARD COMPNAY TO DO ANYTHING.

The result when this happens is ruined credit, potentially garnished wages, a higher interest rate, and no real solution in sight. Oh, and on top of that, the debt settlement company keeps your money.

What a bargain.

Does bankruptcy have drawbacks- certainly. No doubt bankruptcy will hurt good credit and be potentially more embarrassing than debt settlement. However, bankruptcy is the law. Credit card companies can’t ignore bankruptcy. Also, one way or another, bankruptcy will resolve debts.

Bankruptcy- it’s not a con game, it’s the law.

No less than twice this week in my little Shepherdsville office I was visited by potential bankruptcy clients that had not filed taxes in years. WHY? Because they owed…

The logic behind this thinking is that if I don’t file I therefore don’t owe. People assume that if there is no return filed that the tax man won’t come knocking. This simply isn’t the case.

Whether a person files taxes or not Uncle Sam still gets tax information on that person. For instance, just because a person never mails the IRS a 1099 does not mean a copy of that information did not get to the IRS. Try filing a return and forgetting to add a W-2- the IRS usually will catch your mistake. Uncle Sam is just like Santa, he knows if you have been good or bad so file your taxes for goodness sake!

What usually will happen is that Uncle Sam will assume that if you do not file a return that you have no deductions. The IRS will take your income and compute your tax liability. If you owe, based on that estimate, you’ll soon be getting love notes from the IRS. You’ll also get notice of penalties and interest.

When viewing taxes in a bankruptcy context, one must remember five simple rules to get taxes discharged:
1. The return was due more than three years ago.
2. The tax return was actually filed at least two years ago.
3. The tax was assessed 240 ago.
4. You did not fib on the tax return.
5. You are not guilty of tax evasion.
The lessen learned is file your taxes on time. Your taxes may be dischargeable in bankruptcy- however they aren’t if your return was not filed long ago.

Is your paycheck too small?

Well, I think everyone thinks their paycheck could be better. Sometimes, people see a significant portion of their wages lost to wage garnishment.

A typical Kentucky wage garnishment will take a fourth of a person’s bring home pay. That means if your paycheck is $400.00, after garnishment, it will be $300.00. Most folks I know would miss $100.00.

Filing a bankruptcy immediately issues a court order (the automatic stay) that cuts off wage garnishment. This week I had a client that was a single mother trying to get by on $10.00 an hour only to lose a ¼ of her check to a garnishment on an old care repo. She was so happy to hear that I would be able to start getting the garnishment released the second her petition was filed. An almost identical conversation happened today when I got a bank garnishment released.

You don’t have to suffer. Just because last week’s check was garnished doesn’t mean it has to be that way this week. It’s not too late. Call today. I will be working this weekend.

502-716-0000