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Todd Murphy

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Top 5 Reasons People File Bankruptcy

There many reasons people file bankruptcy.  Here are the Top 5 reasons people file bankruptcy.

1. Medical Expenses.

One of the biggest reasons people file bankruptcy is for medical expenses. A study done a few years ago at Harvard University indicates that this is the biggest cause of bankruptcy, representing 62% of all personal bankruptcies. It is interesting to note the study shows that 78% of filers had some form of health insurance.

Rare or serious diseases or injuries can easily result in hundreds of thousands of dollars in medical bills – bills that can quickly wipe out savings and retirement accounts, college education funds and home equity. Once these have been exhausted, bankruptcy may be the only shelter left, regardless of whether the patient or his or her family was able to apply health coverage to a portion of the bill or not.

2. Job Loss.

Another very significant reason people file bankruptcy is due to job loss.  Whether due to layoff, termination or resignation, the loss of income from a job can be devastating. Some are lucky enough to receive severance packages, but many find pink slips on their desks or lockers with little or no prior notice. Not having an emergency fund to draw from only worsens this situation, and using credit cards to pay bills can be disastrous. This isn’t just something for the low-wage worker.  A middle class family with a $3000 p/mn mortgage, two car payments of $300 each along with all of the regular day-to-day expenses won’t last long without a steady income – even with some savings.  Bankruptcy can put debts on ice giving you time to find a job and keep your family from having to live on the street.

The loss of insurance coverage and the cost of COBRA insurance also drain the job seeker’s already limited resources. Those who are unable to find similar gainful employment for an extended period of time may not be able to recover from the lack of income in time to keep the creditors at bay.

3. Mismanagement of Credit.

A third reason people file bankruptcy is due to mismanagement of credit.  Some people simply can’t control their spending. But credit card companies make it worse by giving easy credit and increasing limits when they see heavy use.  Credit card bills, installment debt, car and other loan payments can eventually spiral out of control, until finally the borrower is unable to make even the minimum payment on each type of debt. And, even if the borrower made the minimum payments, at the high interest rates credit card companies charge, once the balance gets high, the minimum payments don’t even cover the monthly interest digging the borrower deep into a hole. If the borrower cannot access funds from friends or family or otherwise obtain a debt-consolidation loan, then bankruptcy is usually the inevitable alternative.

Debt-consolidation and home equity loans make it worse.

Statistics indicate that most debt-consolidation plans fail for various reasons, and usually only delay filing for most participants. Home-equity loans make things worse by turning unsecured debt into secure debt putting your home at risk of foreclosure on their homes if they are unable to make this payment as well.

Borrowing from 401k and pensions is wrong.

Some people, in an effort to “do the right thing” and pay debts, resort to raiding thee own retirement accounts.  DO NOT. Many people are unaware that funds in retirement savings are protected in bankruptcy allowing you to get rid of the bad debts but keep your hard-earned retirement savings that you will not be able to replace.

4. Divorce or Separation.

Another reason people file bankruptcy is after divorce or separation. Marital dissolutions create tremendous financial strain on both partners in several ways. First come the legal fees, which can be astronomical in some cases, followed by a division of marital assets, decree of child support and/or alimony, and finally the ongoing cost of keeping up two separate households after the split. The legal costs alone are enough to force some to file, while wage garnishments to cover back child support or alimony can strip others of the ability to pay the rest of their bills. Spouses who fail to pay the support dictated in the agreement often leave the other completely destitute.

5. Unexpected Expenses.

Loss of property due to theft or casualty, such as earthquakes, floods or tornadoes for which the owner is not insured can force some into bankruptcy. Many homeowners are likely unaware that they must take out separate coverage for certain events such as earthquakes. Those who do not have coverage for this type of peril can face the loss of not only their homes but most or all of their possessions as well. Not only must they then pay to replace these items, but they must also find immediate food and shelter in the meantime. Furthermore, those who lose their wardrobes in such a catastrophe may not be able to dress appropriately for their work, which could cost them their jobs.

If you have debts that are out of control, don’t do anything until you understand all there is to know about bankruptcy.  It is a federal law that is designed to help you.  It is not wrong to file bankruptcy.

 

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Famous People Who Filed Bankruptcy

Famous People Who Filed Bankruptcy.

There have been many famous people who filed bankruptcy.  Sometimes they do it because they got themselves into financial difficulty, other times they do it simply as a strategic business move.  Either way, if they can do it, so can you.

Take a look at the list: you may very well be surprised at the names here.  Some, like Mike Tyson, perhaps not.  Others like Abraham Lincoln, Donal Trump, Walt Disney?

 

CELEBRITIES WHO FILED BANKRUPTCY

1. Burt Reynolds – chapter 11 in 1996 after owing more than 8 million in debts
2. Lorraine Bracco – filed after long custody battle
3. Mickey Rooney – 1986 filing – first bankruptcy was in 1962
4. Kim Basinger – filed due to $8 million judgment after backing out of a movie
5. Jerry Lewis – filed in the 70’s after losing stage bookings
6. Gary Coleman – 1999 bankruptcy
7. Redd Foxx –chapter 11 after owing millions to IRS
8. Mike Tyson – filed after blowing $300 million foolishly
9. Morton Downey, Jr. – filed 5 bankruptcies
10. Larry King – filed in 1971 and again in 1978
11. Gloria Vanderbilt – 1938 bankruptcy
12. John Wayne
13. Toni Braxton – filed in 1998
14. Francis Ford Coppola – filed in 1999
15. David Crosby – filed in 1985
16. Mick Fleetwood – filed in 1984
17. Dorothy Hamill – filed in 1996
18. Marvin Gaye – filed in the 70’s
19. M. C. Hammer – filed in 1996
20. Merle Haggard – filed in 1993
21. Chaka Kahn
22. Jackie Mason – filed in 1983 after bad investments
23. Ted Nugent
24. Tom Petty – filed in 1979
25. Debbie Rooney – filed in 1962
26. Anna Nicole Smith
27. Cindy Lauper – filed in 1981
28. Latoya Jackson – filed in 1995
29. Wayne Newton – filed in 1992

 

FAMOUS PEOPLE WHO FILED BANKRUPTCY

1. Walt Disney – filed after a company owing him money filed bankruptcy
2. Henry Ford – Founder of Ford Motor Company
3. William Durant – Founder of General Motors
4. Larry King – filed in 1971 and 1978
5. Donald Trump – filed several bankruptcies
6. P. T. Barnum – Founder of Barnum & Bailey Circus
7. H.J. Heinz – Founder of the H.J. Heinz Ketchup Company
8. Mark Twain (Samuel Clemens) – filed in 1894 due to failed investments
9. Oscar Wilde – acclaimed poet and author
10. William Fox – Founder of 20th Century Fox Film Corporation.

 

POLITICIANS WHO FILED BANKRUPTCY

1.   Abraham Lincoln – filed several times, due to business failures
2.   Thomas Jefferson – filed several times, including after leaving office due to large debt
3.   Ulysses S. Grant – 18th US President – filed in 1884 after leaving office
4.   Daniel Webster – US Secretary of State – 1841
5.   George McGovern – US Senator – filed in 1991 after his inn went out of business
6.   John Connally – former Texas Governor and Treasury Secretary – filed Chapter 11 in 1987
7.   William McKinley – 25th US President
8.   J. Fife Symington – Governor of Arizona – filed in 1995 while still in office

 

Do you know other famous people who filed for bankruptcy?  Put them in the comments.

 

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Chase Abusive On Debt Collection Of Credit Cards

Chase Sued For Abusive Debt Collection Of Credit Cards: And People Are Told Bankruptcy is bad?

In just one more incident of big banks or credit card companies using abusive methods on debt collection of credit cards, JPMorgan Chase was sued in California Court alleging that Chase committed abuses against tens of thousands of California consumers for debt collection credit cards.

These guys don’t care how they get their money.

According to California Attorney General Kamala D. Harris, for about three years, between January 2008 and April 2011, Chase filed thousands of lawsuits each month to collect soured credit card debt, Ms. Harris said. On a single day, for example, Chase filed 469 lawsuits, court records show.  Ms. Harris said, Chase took shortcuts like relying on court documents that were not reviewed for accuracy. “To maintain this breakneck pace,” according to the lawsuit, Chase relied on “unlawful practices.”

Abuses are rampant.

JPMorgan Chase is already navigating a thicket of regulatory woes. The Office of the Comptroller of the Currency, one of the bank’s chief regulators, is preparing an enforcement action against the bank over the way it collects its credit card debt, according to several people close to the matter who spoke on the condition of anonymity because they were not authorized to discuss the cases publicly.

Chase assembled a “debt collection mill that abuses the California judicial process,” according to the lawsuit. Many of the lawsuits filed rely on questionable or incomplete records, Ms. Harris said. “At nearly every stage of the collection process,” the bank “cut corners in the name of speed, cost savings and their own convenience,” she said.

Bankruptcy Is Just A business Tool To Help You Get Back On Track.

Bankruptcy is a business tool used by savvy people and businesses to help get back on track once debt becomes unmanageable.  Companies, sports and entertainment figures, and regular people all over the Country use bankruptcy for what it was intended to be used for: protect companies and individuals with too much debt and restore their ability to regain financial health and become a part of the economy once again. Don’t feel badly about using the tool for savvy people.

Todd Murphy is a NJ Bankruptcy Lawyer practicing in Somerville, NJ.  He can be reached at 862-217-2361.

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Bankruptcy Attorney | Somerville | Foreclosure Lawyer | NJ

Bankruptcy Attorney

Bankruptcy Attorney Todd Murphy tells how bankruptcy can help.

Bankruptcy can help if you are being harassed by bill collectors on the phone, at home or at work, or if you are receiving threatening letters in the mail.  There is no need to put with this type of disrespect from a bill collector.  I’m sure you would like to pay them but you simply cannot.  And, don’t feel bad about it.  They don’t feel badly about harassing and threatening you day and night or charging you outrageous interest rates or penalties.

If you have payday loans, you really know how aggressive a bill collector can be.  They are relentless.  it starts off innocently enough on your part, you need a an advance to make a payment but then something comes up and you can’t pay back the payday loan.  Then – wham, the interest goes to 30% and they overdraw your bank account.

Don’t feel bad about bankruptcy.  It might be the right thing to do for you!

Somerville

Todd Murphy‘s office in Bedminster, NJ is close to Somerville, the county seat of Somerset County.  Contact him here or by calling him directly at 862-217-2361.

Foreclosure Lawyer

Foreclosure notification is a frequent result of financial difficulty. There are many ways to address a foreclosure notification, depending on how deep in arrears you are or the status of your income and employment. The most desirable path forward is to obtain a loan modification through negotiation with your creditors and mortgage holder. If you’re unable to qualify, or the bank gives you the runaround, then getting a modification through a Chapter 13 bankruptcy filing may offer you the solution you need, enabling to stay in your home, erase some debt, and pay off others through a court-supervised payment plan. Call us for a consultation to find the best option for your foreclosure situation.

 

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How Much Does It Cost To File Bankruptcy?

How much does it cost to file bankruptcy? That’s an important question I get every day.

 Our Fees Are Very Affordable.

Click Here For Our Current Pricing for Chapter 7 and Chapter 13 Bankruptcy.

 What Do We Charge For Chapter 7 Bankruptcy?

We charge a fixed fee for Chapter 7 Bankruptcy which includes all Court costs and expenses. We include the cost of taking the on-line counseling courses and the costs to run a credit report. The fee has to be paid (or all of your payments must be made) before filing your case.  Click Here For Chapter 7 Bankruptcy Cost.

What Do We Charge For Chapter 13 Bankruptcy?

Chapter 13 Bankruptcy is quite a bit more work which can go on for months or even years.  But, the good news is—you don’t have to pay the fee in advance. Click Here For Chapter 13  Bankruptcy Cost.

Do you Offer Payment Plans?

Yes we do.  That’s the most common question we get when we are talking to someone about filing bankruptcy.  We understand finding the money to file is one of the biggest problems for most people.  We help by offering payment plans starting for as little as $100.

Where Do I Find The Money?

Most people simply don’t have the money when they need it.  Many times people are still making credit card payments or other payments to accounts that are going to be discharged in bankruptcy.  Once you decide you are going to file, any further money you pay a creditor is wasted money.  You are better off paying that amount toward your payment plan for our fees and put yourself in a position to file as soon as possible.  If you are already not making any payments,  a common approach is to borrow from friends and family at least some of the money to file.

 Recent Changes to the Bankruptcy Laws Made it More Expensive.

Since the Bankruptcy laws were amended in 2005, it has become more expensive to file bankruptcy.  The laws were designed (through extensive lobbying by credit card companies) to make it harder for many to discharge their debts through bankruptcy.

What’s the Average Cost To File Bankruptcy Nationwide?

The average cost to file for Chapter 7 bankruptcy protection, the most common form of consumer bankruptcy, is more than $1,500, according to recent research submitted to the National Bureau of Economic Research.

 How Do I Come Up With The Money To Pay For Bankruptcy?

Many people can stop paying their credit cards once they have made the decision to file bankruptcy.  This often frees up enough money to make payments for the attorney fee and Court costs.  Other people have to rely on friends or family to give them the money.  Still others wait until they receive their tax refund as a way to fund the cost.

The research submitted to the National Bureau of Economic Research, conducted by a group of professors from Columbia University, the University of Chicago and Washington University in St. Louis, examined how bankruptcy filings spiked after people received their tax rebates from previous years.They estimate that another 200,000 consumers, who would otherwise not have enough money to file, will use their tax refunds to pay for bankruptcy this year.

 Too Broke To File Bankruptcy?

In an article on CNNMoney, Jialan Wang, co-author of the report said: “For lots of people, bankruptcy has been taken off the table as an option because of the severe fees involved.”

Among those fees is a charge of about $300 just for filing the paperwork with the federal court, while the rest typically goes to bankruptcy lawyers, said Wang.

And there are other expenses on top of that, including fees for mandatory pre-bankruptcy credit counseling and a pre-discharge debtor education course. These average about $85 altogether, according to a recent study sponsored by the American Bankruptcy Institute.

That means many of the Americans who have seen their debt snowball out of control due to events like job loss, foreclosure or a medical emergency during the economic downturn are now left without their last financial lifeline, she said.

Todd Murphy is a bankruptcy lawyer with offices in Bedminster, NJ.  Call now! 862-217-2361