Fight Zombie Debt!

What is Zombie Debt?

Some people have debts in their past that they have not payed off or simply have forgotten 

bout it. These accounts may have been written off as “uncollectable” by the original loan

issuer. Debts are considered to be uncollectable if the debtor cannot be found, or the debtor 

was unable to pay off their debts. Most companies stop trying to collect completely once the debt has reached the age of 6 years, which is the statute of limitations for debts in most

states. Once the debt has reached this point, the debtor is no longer legally required to pay

it off. However some of the old debts can still have some value. There are companies who

buy uncollectable debts for a small percentage of their original value. Since companies do

not pay much to acquire these zombie debts, getting paid a fraction of the loan is

still profitable.

What Should I Do if I am Contacted?

If someone contacts you about collecting a debt, do not speak to anyone over the phone.

Ask the debt collection company for their address and send them a letter within 35 days of

initial contact. This letter should dispute the fact that you owe the debt, and should

request proof of the debts validity be provided. You should NEVER acknowledge that you

owe the debts. Do not contact the creditor until you receive proof of the debts validity. The

debt collection company is required under the Fair Debt Collection Practices Act to

provide you with written proof that the debt is valid or a judgement against you, along

with the name of the original creditor, assuming the debt was resold.

Upon receiving this information, you should be able to determine if the debt is

yours, and if the statute of limitations applies. If you do not take action on a

zombie debt, but the debt collection agency continues to contact you, write them a

letter stating that they may not contact you unless it is in writing or they wish to sue

you. Zombie debts are usually past the statute of limitations and no legal action can be

taken.

Should I pay the debt?

You should find out what is the statute of limitations for collecting a debt is in your state.  

For most states it’s 6 years.  If it has been over 6 years since the last time you made a

payment most likely the statute of limitations has passed and you should not pay it.

 Paying any amount of the debt can restart the statute of limitations, causing you to be

liable for the debts.  This is what the collection agency is hoping for, by making a payment

they can go after you to collect the debt.

If you are not sure how to fight zombie debt or want to know your legal rights please

contact Fridlin & Associates at 718­372­4400 or e-mail your questions to

info@fridlinbankruptcy.com

Advertisement

Means Test

 

If you are considering bankruptcy as one of the options to help with your financial hardship, the first step is to take a Means Test which will determine your eligibility for Chapter 7 bankruptcy.

You need to compare your household income to the state’s Median Income.   If your current household income falls below Median Income you are automatically presumed to pass the means test and qualify for Chapter 7.

If you household income is above, you will need to complete a Means Test which will calculate your income and expense information.  The information will be applied in determining if you are eligible for Chapter 7 or Chapter 13 bankruptcy.

1 Member Household – $47,414.00
2 Member Household – $59,631.00
3 Member Household – $70,151.00
4 Member Household – $83,614.00
5 Member Household – $91,714.00
6 Member Household – $99,814.00
7 Member Household – $107,914.00
8 Member Household – $116,014.00
9 Member Household – $124,114.00
10 Member Household – $132,214.00

Keep in mind that just because you can file a Chapter 7 does not mean that you should.  Generally, a Chapter 7 bankruptcy is considered a  better option if you do not want to keep your secure property, such as home with a mortgage.  You should consult with an attorney to determine your options and the best course to take.

 

What is Bankruptcy?

What is Bankruptcy?

Bankruptcy allows individuals, couples, and businesses that cannot meet their financial obligations to be excused from repaying some or all of their debt. Bankruptcy has been in existence since ancient times. In the United States, the rules and procedures for filing bankruptcy are governed by federal law. States are prohibited from legislating in this area of the law.

Generally speaking, there are two types of bankruptcy. In a liquidation bankruptcy, debtors must surrender their property, which is sold, and the proceeds distributed to creditors. In return, all debts are permanently discharged. In a reorganization bankruptcy, debtors are allowed to keep their property. But the debtors must agree to an installment plan to repay creditors a portion of the amount they owe.

Filing for bankruptcy involves submitting a petition and fee to the bankruptcy court. The fee is close to $300 for most personal bankruptcies. The petition will contain sworn statements by the debtors concerning the amount of money they owe, their income and expenses, as well as a complete list of all of their assets. After filing, a court hearing is held to review the information in the petition.

Chapter 7 bankruptcies are by far the most common. These are liquidation bankruptcies in which the debtors must turn over all “non-exempt” property to a supervising officer known as the bankruptcy trustee. Property is exempt if it falls within specific categories of assets that debtors are allowed to keep, such as a certain amount of clothing, household items, tools for work, and in some instances, vehicles and the family home.

The Chapter 7 trustee will take the debtor’s non-exempt property (if there is any), and sell it. The money will be paid to the debtor’s creditors. This may result in creditors receiving a small fraction of their claims. The balance of the debtor’s loans and obligations are forgiven and can never be collected. Creditors who attempt to collect debts that have been discharged face severe penalties under federal law.

Keep Your Property

The fact that a liquidation bankruptcy wipes out debt completely is obviously attractive to anyone who cannot afford to pay their bills. But what about people who have non-exempt property that they do not want to give up? Chapter 13 is a reorganization bankruptcy. It allows debtors to keep their property by agreeing to make monthly payments toward their debt over the course of three to five years.

Chapter 13 bankruptcies offer a number of benefits besides allowing debtors to keep their property. For example, certain types of secured debt, like a car loan, can be restructured by reducing principal to the market value of the collateral, and lowering payments by extending the repayment period to 60 months. Other obligations, like mortgages, student loans, and tax liabilities can be modified as well. Creditors are given no choice in the matter.

Bankruptcy is not available to everyone. Those who have had their debts discharged in a Chapter 7 within the past eight years cannot re-file. For Chapter 13, the waiting period is six years. Too much disposable income is also a problem. Congress has established a “means test” for this purpose. Debtors who make enough money to repay their creditors will be barred from filing a liquidation bankruptcy, though reorganization may be an option.

Businesses that have become insolvent but want to stay in business may be able to file a Chapter 11 bankruptcy. Like a personal reorganization, Chapter 11 allows businesses to obtain protection from their creditors while they put together a repayment plan. Liabilities can be reduced and restructured to give the business another chance at achieving profitability.

Whether a debtor is considering filing under Chapter 7, 11, or 13, they must comply with a vast number of federal laws and regulations. An error at any step of the process can result in the court refusing to discharge the debtor’s liabilities. When the bankruptcy process ends this way, the consequences are disastrous. With so much at stake, hiring an experienced  bankruptcy attorney is a wise investment.

At Fridlin & Associates P.C we have 17 years of experience in Bankruptcy Law.  Please contact our office at 718-372-4400 and find out your rights.

Common Bankruptcy Questions

Часто задаваемые вопросы о Банкротстве:

Что такое Защита через Банкротство (Bankruptcy Protection)?

Обращение за защитой через банкротство позволяет должнику реорганизовать или ликвидировать полностью (или частично) свой долг, согласно решениям Федерального Суда по Банкротству (Federal Bankruptcy Court).  Существуют следующие типы банкротства: персональное и банкротство юридических лиц.

Какие существуют виды банкротства?

Два самых распространённых вида банкротств: Статья 7 (Chapter 7) и Статья 13 (Chapter 13).  Статья 7-я подходит для людей с низким доходом, чьи активы будут реализованы для погашения долга кредиторам. Обычно процесс длится несколько месяцев, от 3 до 6. Чтобы подпадать под Статью 7 о банкротстве, должник должен заполнить Means test (тест на средства). Тест на средства определяет доход и возможность должника выплатить долги без государственной помощи.  Так-же существует Статья 13 о банкротстве для людей со средним и высоким достатком.  Этот вид банкротства реорганизовывает долг и возвращает часть долга в течение 3-5 лет.  Если должник не подпадает под Статью 7 о банкротстве, то применяется Статья 13.

Стоит ли обращаться за банкротством?

Ни какая сумма долга или его длительность не ограничивают ваше право подать на защиту через банкротство. Проконсультируйтесь с адвокатом, чтобы решить является ли банкротство верным решением ваших финансовых трудностей.  Если вы столкнулись с лешением права выкупа имущества (foreclosure) и вам не удаётся изменить условия ипотеки, то скорее всего вам придётся обратиться за банкротством согласно Статье 13, поскольку это единственный способ сохранить ваш дом.

Нужен ли мне адвокат?

Подать на банкротство можно самостоятельно, но это крайне не рекомендуется.  Опытный адвокат по банкротствам поможет вам разобраться с кредиторами, прекратить звонки по телефону от коллекторов и отчисления с заработной платы (Wage garnishment), возобновить работу замороженных банковских счетов, а также уменьшить и снять стресс от создавшейся ситуации.

Есть ли другие альтернативы банкротству?

Если банкротство не является предпочтительным вариантом для вас, ваш адвокат сможет помочь урегулировать ваш долг путём переговоров с кредиторами. Такое Урегулирование долга (Debt settlement) позволит вам выплатить меньшую сумму, чем изначальная сумма долга.

Что такое Debt discharge (Освобождение от долга)?

Debt discharge (Освобождение от долга) освобождает должника от всех обязательств по погашению долга.  После освобождения от долга любые попытки коллекторских агенств взыскать освобождённый долг являются незаконными.

Что я потеряю, если обращусь за банкротством?

Если вы обращаетесь за банкротством по Статье, то, скорее всего, вы ничего не потеряете.  Конечно же, если вы владеете недвижимостью, тогда распорядитель продаст ваш дом, чтобы выплатить кредиторам.  Другое имущество, например автомобиль, останется в вашей собственности. Если вы подаёте на банкротство по Статье 13, вам удастся сохранить свою собственность.

Что мне надо предпринять, если я решил подавать на банкротство?

Если вы приняли решение подавать на банкротство, проконсультируйтесь с опытным адвакатом и вам скажут какие необходимо подготовить документы. До подачи заявления, вы обязаны пройти 2-ух часовой онлайн курс.  Как только вы заявите всех кредиторов, все коллекторы и кредиторы обязаны прекратить действия по возврату долга. При соблюдении вами условий банкротства, до получения освобождения от банкротства вам будет необходимо пройти курс по управлению финансами. После освобождения от долга – всё начинается заново.

Должен ли я предстать перед судом?

Скорее всего, вам не придётся предстать перед судом.  Тем не менее, вам будет необходимо принять участие в собрании кредиторов на встрече, которая состоится примерно через месяц после обращения на банкротство.  В то же время, обычно это собрание обычно состоит из 1-2 кредиторов и распорядителя.  Если вы подаёте на банкротство под Статьёй 13, возможно, что вам будет необходимо посетить окончательное слушание в суде. Но это вряд ли произойдёт, поскольку ваш адвокат будет посещать все заседания.

Должен ли я подавать совместное заявление, если я состою в браке?

Нет!  У вас есть выбор подавать отдельно или совместно, если вы находитесь в браке. Решение зависит от размера имущества, совместных или раздельных долгов, а так же законодательства штата где вы подали на банкротство.

Fridlin & Associates, P.C

Attorneys at Law

1517 Voorhies Avenue, 4th Floor

Brooklyn, NY, 11235

718-372-4400

SkyMall is COMING BACK!

Do you remember browsing through SkyMall magazine while traveling by plane? I certainly do. But have you noticed the recent absence of SkyMall catalogs on major airlines? This is because this past January SkyMall Magazine filed for bankruptcy protection. SkyMall is an in-flight catalog available on most airlines that contains unique products passengers may purchase. After 25 sucessful years, SkyMall was finally replaced by airlines’ offers of wireless netowrks and laptops. So, instead of browsing through SkyMall catalogs, passangers passed time scrolling through Instagram. As a result, many large airlines, such as Delta and Southwest Airlines, had to cut back on purchasing the well-known catalog. As a result, the retail catalog no longer received enough profits to cover its expenses, and had to file for Chapter 11 bankruptcy. As of this very moment- SkyMall is making a comeback. The catalog company was recently purchased by another company due to SkyMall’s value, flawless reputation, and recognition. The puchasing ocmpany figured that since so much shopping today is done online, SkyMall has a chance to get back in the game. Only time can truly tell whether or not the company will be as successful as it once was. However, its prospects look promising.

If you or someone you know is struggling with debt (personal or business)- Call Elaine Fridlin, of Fridlin & Associates, today for a free consultation. Elaine will explain all your options based on your unique situation and help you figure out the best way to get back on track with your finances.

Fridlin & Associates, P.C.

1517 Voorhies Ave. 4th Floor

Brooklyn, NY 11235

(718) 372 4400

Skymall magazine turns 25 with plans to focus on online sales.

Lehman Brothers Bankruptcy.

On September 15, 2008, one of the largest and most successful investment banks in the United States, the Lehman Brothers, filed for Chapter 11 bankruptcy protection.  This bankruptcy was the largest in the U.S. history to date. The company had to file for bankruptcy because the Lehman Brothers owed approximately $613 billion in debt.  Such high debt was the result of excessive and irresponsible borrowing and spending.

The Lehman Brothers’ bankruptcy proves just how easy it is to overspend.  The fact that a huge investment bank had to file for bankruptcy and was forced to pay back its creditors proves just how easily this can happen to anyone. Bankruptcy is a situation that erupts from years of hardships and difficult decisions, and is dealt with by all types of hardworking individuals. A bankruptcy attorney understands how to best deal with such conditions and can help anyone struggling. Call Elaine Fridlin, of Fridlin and Associates, at 718-372-4400 for a free consultation. Elaine will present you with all your options and help you make a full financial recovery in a short amount of time.

Common Bankruptcy Questions:

What is bankruptcy protection?

Filing for bankruptcy protection allows a debtor to reorganize and/ or eliminate some or all debt under the protection of the Federal Bankruptcy Court. There are types of bankruptcies: personal and business.

What are the different types of bankruptcy?

The two most common bankruptcy types are Chapter 7 and Chapter 13. Chapter 7 is for individuals with low income and it liquidates assets in order to pay creditors. This type of bankruptcy lasts a few months, approximately 3-6. In order to qualify for chapter 7, a debtor must complete a Chapter 7 Means Test that determines the debtor’s income and ability to repay without government assistance. Chapter 13 bankruptcy, on the other hand, is for individuals of moderate to high income. This type of bankruptcy re-organizes your debts and repays some debt over the period of 3-5 years. Typically debtors who do not qualify for Chapter 7 bankruptcy end up filing Chapter 13 bankruptcy.

Should I file?

There is no age or debt limit when it comes to filing for bankruptcy. Discuss your debts with your attorney and decide if bankruptcy is a good solution to your financial hardships. If you are facing foreclosure and do not qualify for mortgage modification, you will most likely have to file for Chapter 13 bankruptcy, as it is the only guaranteed way to keep your home.

Do I need an attorney?

Although it is possible to file for bankruptcy on your own, it is highly not advisable. An experienced bankruptcy attorney will help you settle with your creditors, stop harassing phone calls, stop wage garnishment, release frozen bank accounts, and reduce or eliminate stress.

Are there any alternatives to bankruptcy?

If bankruptcy is not option, your attorney might be able to obtain you a debt settlement through negotiating with creditors. Debt settlement would allow you to pay a certain amount that is less than your initially agreed upon loan.

What is Debt discharge?

Debt discharge releases debtors from the obligation and liability of their debt. Once a debt is discharged, it is illegal for any collection agency to attempt and collect a written off/ discharged debt.

What will I lose if I file?

If you decide to file for Chapter 7 bankruptcy- it is very likely that you will not lose much at all. Of course if you own a home- your Trustee will sell your house in order to pay creditors. However, an asset like a car would most likely remain in your possession. If you file for Chapter 13 bankruptcy- you get to keep all your property.

What do I need to do if I decide to file?

If you decide that bankruptcy is the best solution for you- consult with an experienced bankruptcy attorney and provide all necessary documents to file as soon as possible. Prior to filing you will have to complete a Pre-filing bankruptcy course online, which lasts 90 minutes. As soon as you file- all creditors and collectors will have to cease all attempts to collect from you. Once it is time for your bankruptcy to be discharged, assuming you met the terms of the bankruptcy, you will have to complete a financial management course. Once you are discharged- you start over.

Do I have to appear in court?

You will most likely not have to appear in court. You will, however, have to attend the Meeting of Creditors about a month after you file for bankruptcy. However, this meeting typically ends up consisting of 1-2 creditors and your Trustee. If you file for Chapter 13 bankruptcy, you might have to attend a Confirmation hearing. However, this is highly unlikely as your attorney almost always attends on your behalf.

Do I have to file jointly if I am married?

No! If you are married- you have the choice to file either jointly or individually. The decision is based on how much property you own, whether or not you have joint debts, and any exemptions to the law in your filing state.

Who Can File For Bankruptcy?

Bankruptcy Definition, according to Merriam-Webster dictionary: “a condition of financial failure caused by not having the money that you need to pay your debts”.

Purpose of Bankruptcy: to give the debtor a fresh start by eliminating debts AND fairly pay creditors the debts they are owed.

Bankruptcy Limitations: you must pass the Means Test in order to qualify for Chapter 7 bankruptcy. This test determines if your income is low enough to get most of your debts discharged. For Chapter 13 bankruptcy, there is a limitation of how much secured and unsecured debt you may possess.

Advantages of Bankruptcy: filing for bankruptcy allows you, the debtor, to restructure and eliminate your debt and get a fresh start with your finances.

Consequences of Bankruptcy: bankruptcy severely damages your credit score and remains on your record for up to 10 years, making it difficult for you to take out new loans and possibly obtain good employment.

Who May File For Bankruptcy: individuals, business entities, municipalities. Some states can file for bankruptcy, but there are limitations and conditions.

Famous People and Companies Who Filed for Bankruptcy: 50 Cent, Betsy Johnson, Heidi Montag & Spencer Pratt, SkyMall Magazine, Caesar’s Palace, Hostess, Wet Seal, DEB Shops, Delia’s.

“Mortgage Payments & Foreclosure”

What to do if you are behind on your mortgage:

– Loan Modification: reduce the APR or the monthly amount due.

– Debt Consolidation: get a new, lower interest loan to pay off the old loan.

– Debt Settlement: reduce the amount owed via negotiating.

What is foreclosure?

A foreclosure if a lawsuit filed by a mortgage company when a borrower has not made payments. Through the foreclosure, the mortgage company asks the Court to sell the property so the mortgage company can recover its money.

What to do if I am served with papers of Foreclosure?

-Read the Summons & Complaint

-Hire an experienced attorney

-Write an answer to Complaint

-Have your lawyer file your answer with the Clerk of Court (within 20 days)

What is a foreclosure sale?

A foreclosure sale is the legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the property.

What if I cannot afford to keep my house?

-Modify the loan

-Get a Settlement

-File for Bankruptcy protection

What is next?

-Reduce spending

-Always make payments on time

-Restore your credit

Credit restoration is not extremely difficult to do- but it does take time. If you end up filing for bankruptcy, you will have to start over, with bad credit history. First, always pay bills on time to avoid bad credit marks. Second, get a credit card or a CD and only spend what you have, making sure to not go over 20% allotted credit each month. Third, make sure to open a new account every so often and keep up with all payments. The more active accounts (that are up to date) you have, the higher your credit score will be. Lastly, change your lifestyle to a more modest one and slowly add in new rewards and activities over time.

Radio Shack Bankruptcy Protection

This past February RadioShack, an American electronics retail chain, filed for Chapter 11 bankruptcy. The corporation is said to have baffled investors for years on how it managed to stay in business for so long, as its competitors, such as Apple, almost have a monopoly on the technology sold by Radio Shack. Eventually, the “changing technology and consumer habits” proved to be too much of a blow to conquer for the company and it was forced to file for bankruptcy. However, the future for RadioShack is not completely bleak. It has reached many settlements with other corporations such as Sprint and a decision has been made to keep many of its stores open.

The inconsistent economy and always changing developments finally dealt RadioShack a battle they could not win. Bankruptcy is a solution for years of hardships and difficult decisions, and is dealt with daily by hardworking people with unfortunate circumstances. A bankruptcy lawyer understands these conditions and can help anyone struggling. Call Elaine Fridlin, of Fridlin & Associates, at 718-372-4400 for a free consultation.