Author Archives: Jay Butchko
Appeals Court Green-Lights Student Loan Forgiveness Program
A federal appeals court has upheld the dismissal of a legal challenge to a key Biden administration student loan forgiveness initiative. The decision leaves intact more than $51 billion in debt relief already granted, and paves the way for more after the Biden administration recently extended a key deadline associated with the program. The… Read More »
How Long Does Bankruptcy Affect Your Life?
When actor and Celebrity Wife Swap TV star Gary Busey filed bankruptcy in 2012, he said it was a wake-up call and an opportunity to create better money management habits. Unfortunately, many bankruptcy debtors don’t answer the phone and don’t make necessary lifestyle changes. These debtors often anxiously watch the calendar until the seven… Read More »
Can You File Bankruptcy on Medical Bills?
Yes. Medical bills, like credit card debts, are unsecured debts. Usually, such debts are dischargeable in both a Chapter 7 and Chapter 13. That’s good news for families. High medical bills are, by far, the leading cause of consumer bankruptcy filings in the United States. Bankruptcy offers relief in other areas as well, mostly… Read More »
Can a Retiree File for Bankruptcy?
Yes, a retiree can file for bankruptcy, but these cases involve some special issues, which we examine below. As late as the 1990s, “gray” bankruptcies were almost unheard of. These filings have increased almost 70 percent since then, even though overall bankruptcy filings have dropped by almost as much. A combination of a longer… Read More »
What is the Downside of Chapter 7?
Credit score effect and social stigma are the two biggest downsides of Chapter 7 bankruptcy. Banks overstate the effects of these downsides, and unfortunately, many people believe bank propaganda. Filing bankruptcy lowers, but doesn’t “ruin,” a credit score. Usually, repeated late payments, chargeoffs, and other negative information have already ruined it. Additionally, while bankruptcy… Read More »
Is it Possible to Negotiate Credit Card Debt?
Yes, it’s possible to negotiate credit card debt without going to court and without filing bankruptcy. That’s good news for many Americans. In 2023, Americans used credit cards for nearly a third of their purchases. With interest rates exceeding 20 percent, at least in most cases, this strategy isn’t sustainable for long. Options are… Read More »
Knowledge and the Innocent Spouse Rule
The IRS recently reworked the innocent spouse rule as part of the fresh start program. This initiative waived some requirements for some payment plans and other programs. IRS bureaucrats didn’t make these changes out of the goodness of their hearts. The fresh start program was designed to increase voluntary compliance at a time when… Read More »
How to Maximize the Property Exemptions in a Consumer Bankruptcy
Yes, we admit this title sounds a bit dull. But for debtors with significant home equity or other large assets, maximizing the exemptions could be the difference between a fresh start, which the Bankruptcy Code is designed to achieve, and a total loss, which the Bankruptcy Code is designed to avoid. During bankruptcy, the… Read More »
Why Should I File Chapter 13?
Most people file Chapter 13 bankruptcy if their debts are too large to pay all at once, and they need a payment plan. Chapter 13 payment plans are much more debtor friendly than the “payment plans” creditors offer. Chapter 13 offers income-based repayment plans that usually last five years. Usually, that’s more than enough… Read More »
Bankruptcy and Tax Discharge: Basic Rules
Most people voluntarily pay all their taxes on or before the due date. But 15 percent of taxpayers either don’t pay in full or don’t pay at all. That percentage may seem small, but given that the American IRS bill is over $1 trillion a year, that’s a lot of money. And, the IRS… Read More »