Thursday Night Q&A - Debt Collection lawsuits, Bankruptcy, and more! | Summary and Q&A

TL;DR

Consumer protection attorney discusses strategies for dealing with debt collection lawsuits and bankruptcy, addressing common questions and misconceptions.

Key Insights

• 🪡 Self-employed individuals facing debt problems may need to file for personal bankruptcy but typically do not need to file for bankruptcy for their business entity.
• 🍵 Original creditors, like Capital One, often sue debtors directly, while debt buyers handle the majority of collection lawsuits.
• 🈷️ Bankruptcy filings may require providing bank statements covering the last six months, but trustees may examine transactions up to 12 months prior to filing.
• 🚕 The handling of tax credits and mortgage claims depends on specific circumstances and instructions from the U.S. Trustee.
• 📁 Settling debts shortly before filing for bankruptcy may not be beneficial, as the trustee can reclaim the funds and distribute them among creditors.
• 👂 In bankruptcy cases, mortgage holders may file claims even if they are not listed on the title, indicating their financial interest in the property.
• 🔡 Chapter 13 bankruptcies may have a lower success rate due to the extended duration, and dismissed cases may result in fees being returned to the attorney or alternative payment arrangements.
• 🏆 The means test determines qualification for Chapter 7 bankruptcy based on income, and individuals may choose to wait for their income to decrease before filing.

Transcript

hey everybody welcome back to thursday night here on the consumer warrior youtube channel uh i'm john skiba i am a consumer protection attorney in the state of arizona and every thursday night we have this discussion where we jump online and discuss questions that you have that you may be going through related to debt collection lawsuits and uh ban... Read More

Questions & Answers

Q: If a lawsuit indicates "Capital One Bank," does it mean the bank is suing directly?

Yes, if the lawsuit states "Capital One Bank," it indicates that the bank is suing directly without involving a debt buyer.

Q: What is the look-back period for bank accounts in an Arizona bankruptcy?

Bankruptcy attorneys usually request six months of bank statements; however, trustees can look back up to 12 months for transactions that raise red flags.

Q: Do I have to hand over the child tax credit in Chapter 13 bankruptcy?

According to the U.S. Trustee, they are currently not seeking these tax credits; however, consulting with your attorney is recommended.

Q: Should I settle with American Express before filing for Chapter 7 bankruptcy?

It is unnecessary to settle shortly before bankruptcy, as the debt will be included in the bankruptcy filing and paying it may result in a preference claim.

Q: What if the mortgage holder is not on title but files a claim in bankruptcy?

The mortgage holder may file a claim to protect its interests, but it does not necessarily indicate involvement in the bankruptcy proceedings.

Summary & Key Takeaways

• The video features a consumer protection attorney discussing debt collection lawsuits and bankruptcy, specifically focusing on self-employed individuals and businesses facing financial difficulties.

• The attorney emphasizes that businesses typically do not file for Chapter 7 bankruptcy, as they do not receive a discharge of debts like individuals do.

• The attorney also answers questions about the involvement of original creditors in lawsuits, the look-back period for bank accounts in bankruptcy, and the treatment of tax credits and mortgage claims in bankruptcy.