Happy 4th of July from The Law Office of Zachary Bushatz

The Law Office of Zachary Bushatz wishes you a happy 4th of July weekend.  I take liberty seriously at my law office and in my personal life.  Whether it is liberty from the tyranny of government enforced criminal laws or liberating yourself from debt, I can help you gain independence from whatever shackles of oppression are holding you back.Thomas Jefferson

One of my favorite quotes regarding liberty is from Thomas Jefferson who said “Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add ‘within the limits of the law’ because law is often but the tyrant’s will, and always so when it violates the rights of the individual.”  Although we must respect the rights of others, we are entitled to liberty naturally and must understand that the law is often imposed by those in power to keep hold on their position.  If you have had your liberty encumbered, please feel free to contact me and I will help you regain your liberty that you rightly deserve.

Re-Establishing Credit After Bankruptcy

USA Today Weekend published an article today on how one can go about re-establishing their credit after filing for bankruptcy.  It has some good suggestions and shows that filing Bankruptcy next exitbankruptcy is not the end of obtaining credit, but a way to start fresh from overwhelming debt.  Below is the article in full:

Veteran personal finance journalist Robert Powell answers questions from USA WEEKEND readers. His column runs Tuesdays and Thursdays at usaweekend.com.

After a bankruptcy, how can I start new credit?

— Magali Trujillo, Houston

There’s plenty you can do to rebuild credit. But there’s a right way and wrong to go about it, says Gail Cunningham of the National Foundation for Credit Counseling.

First: Put your financial house in order. Get a copy of your credit report for free from AnnualCreditReport.com and deal with any outstanding debts or inaccuracies. Next, create a budget, track your income and expenses, and spend money only on what’s important and essential. Also, create a record of your assets and liabilities, a balance sheet. And don’t forget to set aside money for an emergency fund equal to at least one month’s salary, if not more.

Once you’ve done all that, you can start rebuilding credit by applying for a credit card. But it needs to be the card that is right for your situation, says Cunningham. Research cards at Bankrate.com to see which banks offer cards to people with poor credit records.

You may decide that a secured card is a good place to start. Look for a secured card with the best rates, lowest fees and reports to the credit bureau. A secured credit card, as the name implies, is an account secured by a deposit made to the issuer, says Cunningham. After you’ve developed a history of making payments in a responsible manner, you can apply for an unsecured card.

Other suggestions from Cunningham and the NFCC: Take out a small personal loan from a bank or credit union. Consider a co-signer, if needed. Don’t apply for too much credit at once, but do apply for a variety of credit types. Check out NFCC.org for more tips.

Student Loan Debt up in 2012, Impact Could be felt for Student’s Lifetime

The class of 2012 have not only earned their college degrees, they also earned the dubious distinction of having the most student loan debt ever.  The average debt held by each graduate in 2012 was $29,400, besting the debt amount of 2011 graduates which was $26,600.  The Institute for College Access & Success’ Project on Student Debt released the numbers and said that student loan debt Imagehas risen at an average rate of 6% per year from 2008 through 2012.  Seven in ten seniors graduated with student loan debt. 69% of Ohio students graduated with student loans, averaging $29,037 in debt.

To make matters worse, the job market is still poor for recent graduates, leaving many college graduates with little to no income upon graduation.

What may be most disheartening is that researchers are just learning the impact student loans can have on a graduate for the rest of their lives.  While it is true that college graduates have higher lifetime earnings on average than non-graduates, those who graduate without any student loan debt are in a much better position than those with student loan debt.  A new study by the public policy institute Demos has determined that education debt of $53,000 will lead to a $208,000 lifetime loss of wealth.  If current student borrowing trends continue, student debt will reach $2 trillion by 2025. The study found that $1 trillion in outstanding student debt will lead to a total lifetime loss of $4 trillion for affected households.

If you are facing an asset forfeiture for a criminal act you have committed, don’t look to Bankruptcy Court 1bankruptcy to take care of your problems.  Under the well-established relation-back doctrine, the Government’s interest in forfeitable property vests at the time of the offense giving rise to the forfeiture, and the property subject to forfeiture is not estate property subject to the automatic stay. 

Although the automatic stay in bankruptcy can eliminate one’s obligation on a host of financial responsibilities, any asset forfeiture related to a criminal case is not affected by the filing of bankruptcy.  11 U.S.C. 362(a)(1) says that the automatic stay does not affect “the commencement or continuation of a criminal action or proceeding against the debtor.”  Further, because criminal asset forfeitures are brought by the government, the automatic stay also is inapplicable to them.  A stay does not affect “the commencement or continuation of an action or proceeding by a governmental unit… to enforce such governmental unit’s… police and regulatory power.”  11 U.S.C. 362(b)(4). 

In a criminal asset forfeiture case, the government’s interest in forfeitable property vests at the time of the offense that gave rise to the forfeiture, and the property subject to forfeiture is not estate property subject to the automatic stay.  “All right, title, and interest in [forfeitable] property… vests in the United States upon the commission of the act giving rise to forfeiture under this section.”  United States v. United States Currency, 895 F. 2d 908, 916 (2d Cir. 1990)  Because “the forfeiture occurs when the crime is committed,” a defendant has no interest in forfeited property “as of that moment.”  Therefore, the automatic stay of bankruptcy does not affect criminal forfeiture proceedings, which may continue unabated during the course of a bankruptcy. 

Unfortunately, one of the tools state and federal legislatures are adopting is to create civil penalties for criminal behavior.  One civil penalty used frequently in the war on drugs has become the Civil Asset Forfeiture which is commonly used to seize private property that has been used to facilitate violations of various drug laws.

One of many harsh outcomes of America’s over-enthusiastic war on drugs is that the protection of bankruptcy afforded Americans in the Constitution cannot protect property and assets from seizure when it has been involved in a drug forfeiture case. 

Divorce and Bankruptcy

Many times bankruptcy and family law go together.  Sometimes it is because one person can no longer afford the expenses that two people used to contribute to.  Other times it is that one spouse has taken on a significant amount of debt in the divorce settlement.  Bankruptcy offers a solution to these problems.

When a person files couple struggling with billsbankruptcy after a divorce is finalized, they can discharge most of the debt they have accumulated in the divorce.  Barring an agreement between the parties in a divorce decree that one party will not discharge their debts in bankruptcy, a person can file for bankruptcy and eliminate all dischargeable debts.  These debts typically include credit card bills that the couple shared that one spouse took in the divorce.  If one spouse took possession of real estate but can no longer afford the payments with just one income, they can file for bankruptcy protection to avoid liability of any deficiency owed.

One kind of debt that is not dischargeable that comes up in family law situations is alimony or spousal support.  Both alimony and spousal support are specifically listed as non-dischargeable by the bankruptcy code, so declaring bankruptcy on these debts will not discharge them.  However, many times bankruptcy is the best option for someone who has accumulated a massive amount of debt after going through a divorce.

If you are facing increased financial pressure because of a divorce or reducing income from two earners to one, contact the Law Office of Zachary Bushatz, LLC at 937-331-8061 and set up a free consultation today.

Student Loans – A New Debt Crisis for the Nation

According to a new federal report, more than 1 in 4 borrowers are likely delinquent in repaying their student loans, a number much higher than the 14.6% delinquency rate suggested by previous calculations.

Student Loan Debt on the Thinker      The Federal Reserve Bank of New York calculated delinquency rate of 14.6% by comparing the total number of people with student loans (about 37 million) to the number of people with at least one past-due student loan account (about 5.4 million).

But the Los Angeles Times reports that this undercounts the actual rate of student loan delinquency.  The calculation used by the Federal Reserve fails to consider that federally guaranteed loans don’t have to be repaid until six months after a student graduates.  According to the Times report, adding borrowers with outstanding federally guaranteed loans, the rate of past-due student loan balances jumps to 27%.

Not only is the amount of delinquent student loan borrowers soaring, the amount owed is also astronomical.  According to the Federal Reserve, Americans owe about $870 billion in outstanding student loans – more than what Americans owe for credit card debt ($693 billion) and car loans $730 billion).  On average, student loan balance stands at $23,300 per borrower.  But there are about 167,000 student loans borrowers – about 0.5% of the total – who owe more than $200,000.

If you have student loans that are to burdensome to manage other debt, contact The Law Office of Zachary Bushatz, LLC at 937-331-8061 to see how I can help you with debt relief or visit my website www.bushatzlaw.com

Study finds cancer diagnosis results in higher rates of bankruptcy

Stethescope and moneyA new study finds that cancer patients are 2.65 times more likely to file for bankruptcy than people without cancer.  The problem is even more dramatic for younger individuals who contract cancer.  Younger cancer patients were two to five times more likely to file for bankruptcy than cancer patients 65 years or older.

Researchers looked at a variety of factors in their study, including looking at medical, personal, legal and bankruptcy statistics in the Western District of Washington State from 1995-2009.

If you are experiencing financial difficulty because of unexpected health issues bankruptcy may be an option to help eliminate your debt.  Contact the Law Office of Zachary Bushatz, LLC at 937-331-8061 for a free consultation today.