Student Loans and Bankruptcy

By Kelley Snyder, Paralegal and Charice Holtsclaw, Managing Attorney

Currently, student loans (whether private or federal) are not dischargeable in bankruptcy. However, with that being said, you can attempt to discharge them in bankruptcy if you can prove that the payments are an undue hardship. This can be incredibly difficult to prove though because you have to show that you are physically unable to work and you will not be able to make money (essentially for the rest of your life). This action is a separate motion that is filed with the bankruptcy court called an adversary case.

Politicians are starting to realize that student loans are becoming a major problem and they are doing what they can to provide some assistance. On January 23, 2013 three senators reintroduced the “Fairness for Struggling Students Act of 2013” and the “Know Before You Owe Act of 2013” to try to help with the student loan epidemic (Orenbuch). The goal of these acts is to revise current bankruptcy rules to allow PRIVATE student loans to be discharged (Orenbuch). This particular bill has been introduced previously and failed to pass (Orenbuch).

Federal student loans are the main issue facing borrowers today. There are approximately $1 trillion in outstanding federal student loans in the United States currently (Orenbuch). These bills do not address federal loans, just private. However, there are numerous consumer groups that are currently pushing to make it easier to discharge federal student loans as well (Orenbuch).

Many opponents believe that if these bills pass it will make it difficult for borrowers to obtain loans. They believe that lenders will impose higher interest rates, making it even more expensive to get an education. Supporters of the bills believe that it will in fact give incentive to private student loan lenders to make good loans. Knowing that they could potentially be discharged could potentially deter them from making risky loans (Cohen).

Considering that the same bill has failed previously, it is hard to judge the likelihood of it passing this time around. But, it is definitely worth keeping an eye on if you are burdened by student loan debt, especially private loans.

In the meantime, your best recourse for dealing with your federal student loan debt is to work with your lender to see if you’re eligible for the Income Based Repayment option. More information on that can be found on the Department of Education’s website here: http://studentaid.ed.gov/repay-loans/understand/plans/income-based

Sources:

1. Orenbuch, Moshe, and Meredith Roscoe. “Student-Loan Bill Won’t Get an Easy Pass.” Barron’s. 6 March 2013. 
2. Cohen, Steve. “Allow Private Education Loan Debts to Be Erased in Bankruptcy.” US News & World Report. 6 March 2013. 

Common Law Marriage

The basic requirements of marriage are fairly straightforward: the parties must agree to marry, must be eligible to marry, and must go through whatever forms are required for marriage in that state where they intend to marry. Marriage is not, however, treated uniformly throughout the states. The formal requirements vary from state to state. In general, parties must secure a marriage license and participate in some form of a ceremony.

There are many people who have not participated in a valid ceremonial marriage but still live and share life together as though they had. Their relationship might instead be defined by an alternative doctrine. Common-law marriage is an example of one such alternative doctrine. It differs from ceremonial marriage in terms of the way in which it is entered into. While it lacks the same formalities (such as obtaining the marriage license), the other substantive limitations still apply. A formal divorce action is necessary to end a common-law marriage, just the same as a ceremonial marriage.

What are the basic elements of common law marriage?

To have a common-law marriage, the parties must first intend to be married. In addition, they must continuously cohabitate and hold themselves out as husband and wife. The “holding out” element entails the public’s perception of the couple, as well as establishing uniformity and consistency. There is essentially no such thing as a secret common-law marriage. “Holding out” might be evidenced by, among many other things: the intent and belief of the couple with respect to the relationship, opinions from members of the community as to how the community regards the couple, use of the same last name, designations on life insurance policies, wedding bands, how the parties refer to each other, and even how their bills are paid and mail is addressed.

It is important to remember, however, that not every state recognizes the doctrine of common-law marriage. According to the National Conference of State Legislatures, only nine states, including Kansas, recognize common-law marriage (along with another five that have “grandfathered” common-law marriage).

Does Missouri recognize common law marriage?

Missouri is not among the states that recognize the common-law marriage doctrine. Under Missouri Revised Statute § 451.040, “common-law marriages shall be null and void.” There is an exception for common-law marriages contracted before 1921.

In order to give full faith and credit to the laws of other states, Missouri will also recognize marriages that have been validly contracted in a different state, as long as the marriage comports with the other state’s requirements. Even if the other state recognizes the validity of a common-law marriage, however, Missouri may not recognize the marriage it if it is found to violate public policy.

What Happens to Property at Divorce?

The disposition of property can often be a contentious issue for parties seeking a legal separation or the dissolution of a marriage. As part of the dissolution process, each party will submit documents to the court that illustrate their respective incomes and expenses, as well as a statement of non-martial and marital assets and debts. During the proceeding, the court will then, pursuant to Mo. Rev. Stat. § 452.330, set aside each spouse’s own separate property and further divide the marital property and marital debts as it deems proper.

In general, any property owned by a spouse prior to the marriage remains that spouse’s sole and separate property. It is non-marital property. Marital property, on the other hand, is considered to be all of the property acquired by either spouse during the course of the marriage. But there are several exceptions. If a spouse receives property as a gift, or by means of inheritance, that property is not martial. Any property that is acquired in exchange for any property a spouse owned prior to the marriage is also not considered to be martial property. Property obtained after a decree of legal separation is excluded as well. Parties can further agree to exclude property by way of a valid written agreement.

Aside from the exceptions noted above, any property acquired during the marriage will be presumed to be martial property. Title alone is not enough to sway the presumption. Even if property is titled individually in one spouse’s name, it will be presumed to be martial. It is possible to overcome the presumption by showing that the property falls under one of the exceptions. In a similar vein, separate property that has been mixed, or commingled, with martial property does not necessarily become marital property.

When the court divides the marital property between parties in a dissolution or legal separation, it will take a number of relevant factors into consideration. The value of the non-marital property set aside to each spouse and the custodial arrangements made for any minor children are among such factors. The court will also weigh the desirability of awarding the family home to the party with custody of the children. In addition, the court will consider the economic circumstances of each spouse, the conduct of the parties during the marriage, and the contribution of each party in acquiring the marital property. The role of a spouse as a homemaker shall be taken into consideration when determining that spouse’s contribution.

Contributions by Kelly Thompson, Law Clerk

Tax Relief for Mortgage Debt

With all of the “fiscal cliff” talk recently, it’s hard to pinpoint exactly what came of it and if the tax revisions/extensions affect you. One benefit is a one year extension of the tax relief for people whose lenders forgave a portion of their mortgage debt (1). If the bill had not passed, mortgage debts forgiven in short sale, loan modification, or foreclosure would be considered taxable income. That means you could be responsible for paying taxes on an already difficult loss. For someone struggling with income loss and losing a home, the last thing they need is to be slapped with a large tax bill.

According to RealtyTrac.com, 1 in every 1,274 homes in Missouri received a foreclosure filing in November, 2012. In Kansas, that number was 1 in every 1,255 homes for November 2012(2). With numbers that high, it’s easy to see just how many people could have been affected had the bill not passed.

This bill now expires on January 1, 2014. Some government programs encouraging loan modifications and short sales expire on that date as well. Daren Blomquist, vice president of RealtyTrac believes that because there are so many foreclosure listings, there will be a couple of years of short sales to come. He believes that the bill will likely be extended again next year, but there is no guarantee(3).

Recent mortgage settlements have encouraged lenders to work with their customers that are behind. They are being pushed to allow customers to examine alternatives to foreclosure. And, extension of the tax relief bill makes it more appealing to customers as well. However, these options, including loan modification, deed in lieu of foreclosure, and short sale can be complicated, time consuming, and confusing. It’s best to speak to an experienced attorney and real estate agent to figure out which option best suits your situation after speaking to your lender to see what is available.

By
Charice Holtsclaw, Managing Attorney
and
Kelley Snyder, Paralegal



1 “Fiscal Cliff Pact Also Aided Troubled Homeowners” The Sacramento Bee. 5 January 2013. http://www.sacbee.com/2013/01/05/5093513/fiscal-cliff-pact-also-aided-troubled.html

2 “Fiscal cliff bill extends tax relief for struggling homeowners facing foreclosure.” OregonLive. 3 January 2013. http://www.oregonlive.com/front-porch/index.ssf/2013/01/fiscal_cliff_bill_extends_tax.html

3 RealtyTrac. http://www.realtytrac.com/trendcenter/ks-trend.html

Thinking Ahead: Attorney Fees

The beginning of a new year often represents the opportunity to start fresh. For many, this means committing to resolutions such as getting in shape or completing unfinished projects. For others, beginning anew involves other significant changes such as defending the dissolution of a marriage, seeking modification of child custody or support, bankruptcy and paternity actions.

On the tail end of the holiday season, the thought of paying any lump sum towards attorney fees can often seem overwhelming or simply not feasible. But with tax season just around the corner, the next few months provide the perfect opportunity to begin planning and saving. Consider using this year’s tax refund as a payment towards retaining an attorney to help you navigate your legal matters. If you are currently represented and owe outstanding fees, using your tax refund to pay the remaining balance is a simple way to get caught up.

In general the legal process can often be time-consuming and expensive. Once you have hired an attorney to represent you, there are several measures you can take to help minimize your own attorney fees.

• Identify and communicate your goals and expectations. It might be helpful to rank them according to what you feel the most strongly about. Discuss your goals and expectations with your attorney to avoid future misunderstandings. Be reasonable and realistic. Remember that resolving disputes amicably can not only set a positive tone moving forward, it can also spare you from a financially and emotionally draining courtroom battle. Recognize the importance of being agreeable and knowing when to settle. 
• Keep track of your questions and issues that you would like to discuss. Making a list will allow you to ask all of your questions at one time without forgetting anything. Contacting your attorney by email can often be a more cost-effective approach to communication. While you will still be billed for the time spent reviewing and responding to your email, the fees will generally be lower than those for phone calls during which it is easy to become sidetracked. Keep in mind that other members of the attorney’s staff with lower hourly rates, such as law clerks and paralegals, may be able to assist you with certain questions or concerns related to administrative matters such as billing. 
• When you speak to or meet with your attorney, take notes to help you remember what was discussed and any instructions your attorney may have given you. This will help eliminate confusion and unnecessary delay in the form of your attorney re-explaining matters to you or making repeated requests for information. Be prepared. Keep a calendar with important dates and deadlines. 
• Respond promptly and completely to your attorney’s requests. In addition to collecting the requested documents, keep them organized. This will allow your attorney to spend more time working with the information itself and less time trying to dig through an unorganized stack of papers. 
• Remaining calm will also allow you to listen and communicate more effectively. One key to remaining calm is managing your own stress and taking measures to protect your own well-being. Remember that the process can often be very emotional, especially when it comes to family law matters. It is not uncommon to experience anger, frustration, sadness, and depression. While your attorney will assist you through the legal process and protect your interests, he or she is not a licensed psychologist. Finding a therapist or a counselor to help you work through the emotional components will allow you to spend the time you have with your attorney more productively. 
• Finally, remember that your attorney can only estimate costs and fees at the outset of the representation. Recognize that circumstances often change and the budget might need to be readjusted throughout the process. 

Contributed by Kelly Thompson, Law Clerk

Managing Stress During the Holiday Season

While the holidays bring plenty of cheer and laughter, they also tend to bring a great deal of stress. Planning face-time with family, coordinating activities, and managing the financial aspect of the holiday season can often become overwhelming. The following suggestions from the Mayo Clinic aim to reduce holiday-related pressure and anxiety:

Stick to a budget. It might be helpful to decide in advance how much you are going to spend. The trick is to then stick to it. Remember that gifts and presents do not equate to happiness. Do not extend beyond your means. If you have a large family or are traveling, consider other gift-giving arrangements. Some alternatives include donating to a charity in someone’s name or exchanging homemade gifts.

Plan ahead to avoid becoming overwhelmed. Trying to visit all of the family in a single day can be exhausting. Spreading family visits over the course of several days will allow you to make the most of the time you do spend with relatives. If certain relatives drive you crazy, consider activities that minimize the amount of time you spend together, like a cup of coffee or a quick lunch. Establishing some organizational tools can also help minimize unnecessary stress. For example, generating lists can help keep you focused while shopping or planning meals and activities.

Be flexible and realistic. Striving for utter perfection can often lead to disappointment when things do not pan out as hoped. The ability to make adjustments along the way is essential. Do not be afraid to adopt new traditions that better suit your family’s needs. Remember that traditions can grow and change as your family does and not every year has to be exactly like the one before.

Maintain healthy habits. The holidays are full of temptation. Remember to keep everything in moderation. Overindulgence can often lead to feelings of guilt. Try to strike a balance between some indulgence and maintaining your regular habits and routines. Exercise regularly and make sure you get enough sleep. Engaging the family in physical activities together can help make those healthy routines seem a little more fun.

Be aware of your feelings. Holidays may not necessarily be happy and joyous, particularly for those who have lost a loved one. Take the time to acknowledge and work through your emotions. If you are feeling isolated, reach out by volunteering or get involved in community events. When dealing with pushy family members, do not be afraid to say no. At the same time, do not be afraid to ask for help when you are feeling swamped. Openness and honesty can prevent harboring frustration, anger, and resentment. Take some time for yourself and relax as well.

For divorced families, the holidays can often be particularly challenging. The American Psychological Association offers several key pieces of advice for the holiday season, beginning with the importance of setting aside differences and laying down the sword. Put the needs of your children first. Encourage your children to spend time with your former spouse and reassure them that you will be fine when they do. Do not put unnecessary pressure on your children. When visits are not possible, technology like Skype can help facilitate contact between family members during the holiday season.

Sources:

“Stress, depression and the holidays: Tips for coping,” Mayo Clinic, available at http://www.mayoclinic.com/health/stress/MH00030

Dr. Elaine Ducharme, “10 Tips for Managing Family Stress at Holidays,” American Psychological Association, available at http://www.yourmindyourbody.org/family-stress-during-the-holidays/

Contributed by: Kelly Thompson, Law Clerk

If It Sounds Too Good To Be True...

We’ve all seen or heard the commercials offering debt settlement to consumers. They are inundating our radios and televisions constantly. These schemes can be really appealing to someone deep in debt – especially with credit cards. They promise to settle all of your accounts and get you debt free quickly.

This just seems too good to be true, and with reason. According to the National Association of Consumer Bankruptcy Attorneys, government officials estimate that about one in ten debt settlement cases fail. The Better Business Bureau was quoted as saying that debt settlement schemes are an “inherently problematic business.” The New York City Department of Consumer Affairs went on to say that debt settlement is “the single greatest consumer fraud of the year (1).” When a debt settlement case fails, it can leave you even further in debt with additional late charges or over limit fees on top of what you already owed.

If you choose to take the risky debt settlement road, there are a few things to watch for:

• Do they encourage you to fall behind on your payments? 
• Are they a for-profit businesses instead of a non-profit corporation? 
• Do they charge high fees for their services? 
• Are they offering you debt settlement for pennies on the dollar? 
• Have they said that they can remove negative things from your credit report? 
• How is their rating with the Better Business Bureau and your Attorney General’s Office? 

Paying attention to these things can help keep you out of the debt settlement trap. It can help you differentiate a settlement company that is a scheme versus a legitimate company that may be able to help your finances (1).

Getting out of debt, no matter which method you choose, can take a lot of time, effort, and dedication. You can’t expect for a settlement company to get you out of debt quickly and save you tons of money. You need to do some research and consider all of your available options. Research the consumer information on the FTC’s website (ftc.org) (2). Talk to an attorney about Chapter 7 bankruptcy, or consider paying off the debt yourself using Chapter 13 bankruptcy or techniques like the snow ball method or by paying more than the minimum payment each month.

Sources:
“The Debt Settlement Trap: The #1 Threat Facing Deeply Indebted Americans.” National Association of Consumer Bankruptcy Attorneys Consumer Alert. October 2012. 30 October 2012. <http://www.nacba.org/Portals/0/Documents/NACBA%20Docs/NACBA%20debt%20settlement%20trap%20consumer%20alert.pdf>.

Federal Trade Commission. 30 October 2012. <http://www.ftc.gov/bcp/menus/consumer/credit/debt.shtm>.

Contributed by: Kelley Snyder, Paralegal

Appearing in Court: Appropriate Dress and Decorum

Whether you are a party to a case or a witness, appearing in court is a formal and serious matter. Accordingly, the importance of the affair should be reflected in both your attire and behavior while inside the courtroom. The following recommendations establish some general guidelines for how to present and conduct yourself in court.

Appropriate Courtroom Attire

Above all else, make sure you appear in court looking clean and well-groomed. You should be freshly bathed and have clean hair, clean nails, and clean clothing. Remove excessive or gaudy jewelry. Facial piercings and other accessories such as large ear plugs are distracting and should be removed. If you have a tongue piercing, remove it prior to entering the courtroom so that you will be easier to understand while speaking.

When dressing for court, think conservatively. Women should avoid low-cut tops or outfits that fit too snuggly. Appropriate apparel for women includes slacks and a blouse or blazer, a skirt, or a dress. For footwear, choose reasonable heels. Low-heeled, closed-toe shoes are more suitable for court than flashy platform pumps. Do not wear flip flops.

For men, slacks and a collared shirt are appropriate selections for the courtroom. Avoid wearing T-shirts, especially those with graphics, phrases, or statements printed on the front or back. Even in the summer, avoid wearing shorts. Do not wear a hat to your court appearance.

Appropriate Courtroom Conduct 

Be on time. This often means making sure you leave yourself enough time to find parking and navigate the courthouse. Do not bring your cell phone into the courtroom with you. If you do, turn it completely off.

While in court, speak and respond only when asked. When answering a judge’s question, try to limit your reply to ten words or less and avoid lengthy monologues. Be careful not to act too casually, such as leaning on the judge’s bench. Do not try to kid around with the judge or crack jokes, especially those which might be found distasteful. Keep your movements to a minimum and avoid distracting gestures.

Most importantly, be polite and respectful at all times. While tensions often run high, do not raise your voice or use coarse language. When someone else is speaking, listen politely. Do not react by sighing, laughing, snorting, rolling your eyes, or shaking your head. These types of responses are disrespectful to both the person speaking and to the court. Finally, remember to be courteous to everyone you encounter while in the courthouse and courtroom, including judges, attorneys, other parties, clerks, and bailiffs.

Contributions by Jeanne Foster, Attorney and Kelly Thompson, Law Clerk

What happens if I don’t reaffirm my mortgage in a chapter 7 bankruptcy?

A reaffirmation agreement is a document that is executed after your bankruptcy case is filed. It renews your obligation to a secured creditor, who has the right to repossess a vehicle or foreclose on your property if you fall behind on payments post-filing. It also makes you responsible for any deficiency balance after the sale of the property. It basically strips that debt of the bankruptcy protection. However, there are many benefits to reaffirming a debt too, including an easier time refinancing and positive reporting on your credit report.

If you intend to keep a house, vehicle, or piece of property secured by a lien, the creditor may prepare a reaffirmation agreement and forward it to your attorney. It is the Creditor who is responsible for preparing these agreements and they cannot be forced to do to. If you choose to sign a reaffirmation agreement generally your attorney’s office completes the required information, forwards it to you for review and signature, then it gets sent back to the creditor for filing with the bankruptcy court. If your budget (Schedules I and J) shows you can afford the payment and that it is not a hardship, no hearing is necessary (in WDMO and District of Kansas). The creditor files the agreement with the court and you are responsible for that debt regardless of your bankruptcy filing.

Not reaffirming a debt, especially a mortgage can sound like a good idea to you initially. It seems as though you can just pay each month and remain in the property. It is true that state contract law protects you to the extent that if you keep up with payments, the property cannot be taken away. And if something does happen financially in the future, such as illness or loss of income, you can surrender the house or car without having to worry about the deficiency balance. Because if no reaffirmation agreement was filed, it means the debt was discharged. And for the most part, that can be true. But, you need to be sure to speak to your attorney about the best option for you because there can be some consequences to not reaffirming a property in your chapter 7 bankruptcy.

One big problem with not reaffirming is credit reporting. If you don’t reaffirm the mortgage, the creditor will likely stop reporting payments to the credit bureaus even though you are making the payments on time each month. The mortgage debt may appear as being discharged in bankruptcy. So, your credit score may take a hit. This can make getting a new loan difficult. Another major problem can be with refinancing or modification. Many lenders will not refinance or modify a loan if a reaffirmation agreement was never filed. So, you will likely be locked into the original loan terms that you have until you decide to sell the property or let it foreclose. It can leave you with few, if any options if you find that the payments are no longer affordable. At that point your only option may be to surrender the property and walk away. And on that note, there are a few things to keep in mind if you are facing foreclosure. Until the property is transferred out of your name (after the foreclosure sale), you need to keep insurance on the property, keep up with maintenance, winterize and secure the property if vacant, and ensure compliance with city rules and codes. As long as it’s in your name, you are responsible for anything that happens to the property, and those fines and costs imposed by a city code violation, fire, etc. are not dischargeable if they happened after your bankruptcy was filed.

So, overall the best option is to speak to your bankruptcy attorney about your options with reaffirming a debt, especially a mortgage debt. They will be able to give you the best advice for your particular situation.

Contributions by Kelley Snyder, Paralegal

Sources:

http://www.bankruptcylawnetwork.com/refinancing-without-reaffirming-in-bankruptcy/

http://www.bankrate.com/brm/news/bankruptcy/20061121_debts_reaffirmed_a1.asp

http://www.loansafe.org/what-happens-if-you-do-not-reaffirm-your-mortgage-in-bankruptcy

Child Support and Children in College

In Missouri, a parent’s obligation to pay child support generally ends when the child turns eighteen years old. If the child is enrolled in college, however, the child support obligation may continue if certain conditions are met.

Under Mo. Rev. Stat. § 452.340(5), the child support obligation will continue if the child enrolls in an institution of vocational or higher education prior to the October that follows the child’s graduation from high school. An “institution of vocational education” encompasses any postsecondary schooling or training where the child attends classes on a regular basis for a fee or tuition. An “institution of higher education” includes colleges, community colleges, or universities.

For the support obligation to continue, the child must be enrolled in and complete twelve credit hours each semester. Summer semesters are excluded. If the child withdraws from a course, the credit hours for that course will not count as part of the twelve required hours.

By statute, the child must provide a transcript to each parent at the start of each semester. The transcript, or other official document issued by the institution, must indicate the courses the child has enrolled in and completed for each term. The document must also show the grades and the number of credits the child received for each course. In addition, it must reflect the courses and corresponding credit hours the child has enrolled in for the upcoming semester.

In addition to enrolling in the required number of credit hours, the child must also receive grades that allow the child to remain enrolled at the institution. Failing grades in half or more than half of the child’s courses for any given semester may terminate the payment of child support.

The child is also responsible for providing the noncustodial parent, upon request, with a copy of his or her grades. Such documentation must be provided within thirty days of receipt of grades from the institution. Child support payments may terminate if the child fails to produce the documents in the allotted time.

If circumstances prevent the child from enrolling in twelve credit hours a semester, the requirement may be lessened. A minimum of nine credit hours each semester is required if the child remains employed for fifteen or more hours a week during the course of the semester. A child with a diagnosed developmental disability or health problem that impacts the number of credit hours the child can carry will remain eligible for child support as long as he or she meets all of the other requirements.

Provided the above requirements are met, a parent’s child support obligation shall continue until the child completes his or her education or turns twenty-one years old, whichever happens first. During this time, either the obligated parent or the child can petition the court to amend the order and instruct the obligated parent to make the child support payments directly to the child.


Contributions by Kelly Thompson, Law Clerk

What effect does bankruptcy have on your credit score?

First of all, you should know that bankruptcy can remain on your credit report for up to ten years. Other bad debts are removed after seven, but not bankruptcy. The impact that a bankruptcy filing has on your credit really depends on your credit report and score before filing. Many times people considering bankruptcy already have negative collections or bad debts on their report. So, they may already have a low credit score. Bankruptcy may not affect their credit scores as negatively as someone with a higher score. If you have a fairly high score and little bad debt listed, your score will probably take a quite a hit after filing your case.

How quickly your score improves after filing depends on you. After filing you will probably start to see lots of credit offers in the mail. Many financial advisors and bankruptcy attorneys suggest obtaining a low limit, secured credit card after filing. Use it on small purchases (like gasoline) and pay it off each month. And be sure to make all of your payments on time. This will slowly start to rebuild your credit. You can also look into obtaining a small line of credit from your bank or credit union. For some, the thought of obtaining new debt after filing for bankruptcy may be a scary thing. But, it’s a surefire way to slowly start rebuilding your credit.

You also want to ensure that your credit report is accurate after filing for bankruptcy. You can pull your credit report for free once a year at www.annualcreditreport.com. Pull your credit report and check that all of the debt that was included in your filing is reflected that way on your report. If something is incorrect, contact each of the three credit bureaus and get it corrected right away. You will need to send each of the bureaus copies of your notice of case filing, discharge notice, and schedules from your filed petition showing the debts that were included.

Rebuilding your credit after filing for bankruptcy can be a long process. But you just have to keep in mind that it is achievable. You didn’t get into financial trouble over night, so you can’t expect to dig out of it that quickly. It will take some time, patience, and hard work on your part. The bankruptcy gave you the fresh start that you needed. Now you just have to be willing to put in the work to get you back in a good financial position.

Blog Contributed By: Kelly Snyder

Child Orders of Protection: A Brief Overview

Orders of protection are available to children as well as adults. In Missouri, child orders of protection are governed by the Missouri Revised Statutes §§ 455.500 - 455.538. These statutory sections are known as the Child Protection Orders Act.

When is a child order of protection available?
An order of protection may be sought on behalf of a child in situations where the child has been a victim of domestic violence by a former or current household member or any person stalking the child. Domestic violence itself is broadly defined by statute as abuse or stalking. Abuse generally encompasses, but is not limited to, assault, battery, coercion, harassment, sexual assault, and unlawful imprisonment. Child discipline, such as spanking, does not constitute abuse as long as it is performed in a reasonable manner. Stalking occurs when a person intentionally engages in a pattern of conduct that serves no legitimate purpose, causes fear of physical harm, and is repeated over time.

Who can file?
A verified petition for a child order of protection may be filed by a parent or guardian of the child, the juvenile officer, or guardian ad litem or court-appointed special advocate that has been appointed for the child.

The petition may be filed in the county where the child resides, where the respondent may be served, or where the alleged abuse took place. Orders of protection are designed for immediate access and are generally pro se friendly. Court clerks are available to explain the filing procedures and provide the necessary forms to petitioners who are not represented by counsel. There are no filing fees for child orders of protection.

What happens next?
Once a verified petition has been filed, a guardian ad litem or court-appointed special advocate will be appointed for the child. A hearing will be set for no later than fifteen days after the filing of the petition. To provide relief for the time that elapses prior to the hearing, the court may issue an ex parte order.

Ex Parte Orders
Ex parte orders essentially provide temporary relief. Upon the filing of a verified petition, an ex parte will only be issued upon a finding that there are no prior or pending orders of custody, and that the respondent is not younger than seventeen years old. If the petition shows good cause, the court can immediately issue an ex parte order of protection. Good cause may be shown by an immediate and present danger of abuse to the child. A respondent does not need to receive notice or have an opportunity to be heard for an ex parte order to be issued.

Intended to protect the child victim, ex parte orders can include terms that the court deems necessary to ensure the child’s safety. An order can restrain the respondent from disturbing the peace of the child, communicating with the child, and abusing or threatening the child. An order can also exclude the respondent the family home or household if the court finds that it is in the best interest of the children remaining in the home, that there is a substantial risk of domestic violence unless the respondent is excluded, and that a remaining adult household member is able to care for the children in the respondent’s absence. An ex parte order can also include a temporary custody order.

An ex parte order remains in effect until the time of the hearing. At the hearing, the court may grant a full order or protection.

Full Orders of Protection
Unlike ex parte orders, full orders of protection are issued after the respondent has received notice of the hearing and had an opportunity to be heard. Personal service upon the respondent is required at least three days before the hearing for the issuance of a full order of protection.

At the hearing, a full order may be granted by the court if the petitioner proves the allegations by a preponderance of the evidence. Full orders of protection can temporarily enjoin the respondent from engaging in same actions and manners as ex parte orders. Upon issuing a full order of protection, the court can also award custody, visitation, child support, and maintenance, all subject to certain conditions. In addition, the court can order the respondent to participate in counseling, pay the cost of any treatment, make rent or mortgage payments, or pay fees for housing and other services that are provided to the child by a shelter for domestic violence victims.

Full orders of protection remain in effect for at least 180 days, but not for longer than one year. The order may be renewed upon another hearing. A finding of a subsequent or new act of abuse toward the child is not necessary for the renewal of a protection order.

For more information on this matter, contact the Kansas City Attorneys of Heartland Law.

Paternity Suits

A paternity suit is a lawsuit, usually by the mother of a child, to establish the legal relationship between a child and his/her biological father under Missouri’s version of the Uniform Parentage Act.

There are three parts to a paternity action:

1. A judicial declaration of paternity and ordering father’s name to be added to the birth certificate, 
2. A child support order, 
3. A plan for custody and visitation referred to as a parenting plan. 

Evidence of paternity can be from various sources including

1. A DNA test, 
2. A signed Affidavit of Paternity at the hospital at the time of the birth, 
3. aEvidence that the child was presented as ones’ child, including bringing the child home to raise. 

The parenting plan for the child addresses whether custody will be sole custody or joint custody and provides a schedule for visits. The Missouri legislature has expressed a preference for joint custody and takes the position that a continuing relationship with both parents is the ideal for a child’s healthy development. The parenting plan will provide for decision making as to the child’s education, medical care and religious upbringing. Child support is determined based on a calculation that takes the parents’ income and expenses into account. One of the parent’s addresses is designate the child’s permanent address for residential and educational purposes.

The parenting plan becomes a permanent part of the final judgment, providing the legal structure of the family of the child in the absence of a marriage, as well as protection in the event of interference with custody.

Do You Need A Lawyer To File For Bankruptcy?

In this day and age, the internet has become a viable source for everything from buying groceries to purchasing a plane ticket. However, using the internet to research information about bankruptcy can be a slippery slope, filled with bad information or things that do not apply to each unique situation. It is possible to file a bankruptcy case yourself, however it is not recommended. When dealing with this type of case, you have to file correctly, have all required documents properly filled out, and list all property and debts, or your case could be dismissed. Another thing to keep in mind is individual cases are randomly audited. “The audit checks for accuracy, completeness, and truthfulness.” You must not lie, falsify records, or destroy or hide property (1).Filing for bankruptcy in Missouri, Kansas, or any other state is an extremely technical and complex process. A single error could negatively affect the results of your case or even result in your case being dismissed. In certain situations those errors can lead to the debtor losing the right to file another bankruptcy and/or lose certain protections in future cases.

The term “pro se” mean to advocate on one’s own behalf before a court, rather than being represented by an attorney. A pro se litigant is still expected to recognize the rules and procedures of the local and federal courts. One must also be familiar with the Federal Rules of Bankruptcy Procedures and the United States Bankruptcy Code. Even though you are not an attorney; you will still be held to the same rules and standards.

Some people choose to file bankruptcy pro se because they believe they cannot afford an attorney. Speaking with an attorney and discussing your options is your best option. Having an attorney is to your advantage and will likely save you time, money, and offer more protection for your assets. In the instance you have an aggressive creditor violating the collection laws, Heartland Law will prosecute any of your creditors that do not follow the rules once bankruptcy is filed. If you do not have an attorney you will have to handle harassment from creditors, lawsuits and illegal post-bankruptcy garnishments on your own.

There is more to filing for bankruptcy than simply filling out forms. Trying to save money by filing yourself can hurt you in the long run. Often one has to seek counsel to fix a mistake. In the end it will cost you more than if you had simply worked with an attorney in the first place.

Contact one of our experienced bankruptcy attorneys at Heartland Law for a free initial consultation to evaluate your options.







Footnotes

(1) “Filing for Bankruptcy without an Attorney,” This site is maintained by the Administrative Office of the U.S. Courts on behalf of the Federal Judiciary. http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyResources/FilingBankrup tcyWithoutAttorney.aspx

Digging Deeper Into Debt With Payday Loans

Regularly advertised as an easy source of money, payday loans appeal to people with an urgent need. Bankruptcy and payday loans tend to go hand-in-hand because once you fall behind it can be virtually impossible to catch up.

The payday loan industry claims that these loans are meant to be a small, short term advance used to help a borrower meet their financial needs until their next pay day. The lender holds a check anywhere from a week to a month and in return, the borrower gets cash immediately. These loans unfortunately have extraordinarily high interest rates that more often than not leave a borrower worse off than before. At the time, borrowing this money seems like an appropriate option in an urgent situation, but what the borrower may not realize is that they are only digging themselves deeper into debt.

Lenders say that these loans are used only in emergency situations and over a short term period -- however this is absolutely wrong. A Wall Street analyst conducted a study and found that "the average customer makes 11 transactions a year, which shows that once people take [out a payday loan], they put themselves behind for quite some time(1)." Borrowing from paycheck to paycheck will only result in eventually defaulting on repayment.

In one situation a woman named Andrea Felts took out a loan to help cover expenses after her divorce. She took out a $400 loan and was charged $120 in interest for the 16 day loan period. When she wasn't able to pay the $520 she borrowed, she rolled over the loan for an additional $120 in fees. By the end she rolled her loan over a total of 5 times which resulted in $600 in fees on a $400 payday loan(2).

Once you are already struggling to make ends meet, taking out a payday loan can escalate an already dire situation very quickly and it's all too common for a borrower to eventually file for bankruptcy. For the most part, payday loans are considered unsecured debt and are treated as so during bankruptcy proceedings. Filing for Chapter 7 will allow a debtor to discharge their debt without repayment and essentially all unsecured debt is dischargeable. Under Chapter 13, the payday loan is treated equally along with all other unsecured debt in the debtor’s plan. .

If the loan was received within 60 to 90 days before filing, the loan may not be dischargeable in bankruptcy. The creditor will have the presumption they were taken out with no intention of being paid back. Also, if the electronic authorization or check written to the payday loan company “bounces” or is returned by the bank as insufficient funds, the payday loan company may refer the incident to the County prosecutor for bad check charges. If you are charged with writing a bad check, this is a criminal charge that is not dischargeable in bankruptcy.

If you find yourself submerged with debt and your payday loans are only aggravating the situation, contact one of our knowledgeable bankruptcy attorneys for more detailed information.

Footnotes:

(1) M. Anderson, "Cash poor, choice rich, Paycheck-advance firms move in," Sacramento Business Journal (Jan. 11, 1999).

(2) "Payday Lenders: small loans, hefty fees, big problem." Consumer Reports Magazine. 02 2009: n. page. Web. 28 Jun. 2012. <http://www.docstoc.com/docs/23437676/Consumer-Reports-Magazine-February-2009-Payday-lenders-small>.

Custody of Minor Children—What is “Best Interest?”

To make an initial custody decision, a Missouri court has the duty to examine eight various factors in order to make a best interest determination. Where the child wishes to reside is one of them, but not necessarily the determining factor. The court must also look at:

The wishes of the child's parents as to custody and the proposed parenting plan submitted by both parties;

If one of the parents fails to participate in a cause of action, his or her ability to present a case is adversely affected. There are occasions when custody is determined in favor of the party who has filed, primarily due to the second party failing to file an answer and participate in the outcome. 

The needs of the child for a frequent, continuing and meaningful relationship with both parents and the ability and willingness of parents to actively perform their functions as mother and father for the needs of the child;

The Missouri legislature has expressed a clear preference for joint custody if possible. It is accepted as true that a child needs both a mother and a father for optimal maturation. However, if one parent is hampered by addictions, absence, abusive behaviors or illness, the other parent could be found to be a more able and willing parent. 

The interaction and interrelationship of the child with parents, siblings, and any other person who may significantly affect the child's best interests;

How does everybody interact and deal with one another? If there are significant issues, the court will consider those.

Which parent is more likely to allow the child frequent, continuing and meaningful contact with the other parent;

Action by a parent that interferes with the ability of the other parent to have a relationship with the child will adversely impact their custody. Examples are refusing to call the child to the phone, refusing to keep each other advised as to significant events, refusing to schedule parenting time with the other parent.

The child's adjustment to the child's home, school, and community;

If a child is having significant adjustment challenges in a particular home, school or community, a more nurturing environment might be indicated. Issues with step-parents, inappropriate discipline, cult membership, lack of educational opportunity, etc. will be considered. One parent being more financially able than another will not be determinative by itself.

The mental and physical health of all individuals involved, including any history of abuse of any individuals involved. If the court finds that a pattern of domestic violence as defined in section 455.010 has occurred, and, if the court also finds that awarding custody to the abusive parent is in the best interest of the child, then the court shall enter written findings of fact and conclusions of law. Custody and visitation rights shall be ordered in a manner that best protects the child and any other child or children for whom the parent has custodial or visitation rights, and the parent or other family or household member who is the victim of domestic violence from any further harm;

If a court finds there has been abuse but there is little alternative but to maintain custody with the abusive parent, special findings of fact must be made and written into the final judgment.

The intention of either parent to relocate the principal residence of the child; and

Once the case has been filed, it is against the law for a parent to unilaterally move the child out of the jurisdiction. All such moves will have to be approved by the court in order to be legal.

The wishes of a child as to the child's custodian. The fact that a parent sends his or her child or children to a home school, as defined in section 167.031, shall not be the sole factor that a court considers in determining custody of such child or children.

When children reach the teenage years, they often suddenly express a desire to switch households. Cases require careful analysis, as the Disney parent might seem attractive in the eyes of the minor child.

Once the court has looked at all these factors, the best interest of the child can be determined.

Custody of Minor Children—What is “Custody”?

"Custody" means joint legal custody, sole legal custody, joint physical custody or sole physical custody or any combination thereof;

"Joint legal custody" means that the parents share the decision-making rights, responsibilities, and authority relating to the health, education and welfare of the child, and, unless allocated, apportioned, or decreed, the parents shall confer with one another in the exercise of decision-making rights, responsibilities, and authority;

"Joint physical custody" means an order awarding each of the parents significant, but not necessarily equal, periods of time during which a child resides with or is under the care and supervision of each of the parents. Joint physical custody shall be shared by the parents in such a way as to assure the child of frequent, continuing and meaningful contact with both parents;

"Third-party custody" means a third party, such as a grandparent or guardian is designated as a legal and physical custodian.

What An Automatic Stay Can Do For You

Upon filing for bankruptcy, an injunction goes into effect immediately; this injunction is called an automatic stay. An automatic stay halts collection activities such as filing or continuing a lawsuit, making requests for payment, and notifying credit reporting agencies of an unpaid debt. An automatic stay is particularly helpful when a debtor is at risk of being foreclosed on, evicted, having utilities turned off, or found in contempt for failing to pay child support. This stay is a powerful reason in itself to file for bankruptcy.

Below are some of the situations that the automatic stay can assist with:

Foreclosure: If your home or other real property is being foreclosed upon, the automatic stay will temporarily halt the sale in a Chapter 7 filing, or permanently stop the sale in a Chapter 13 filing where a plan is filed to catch up the arrears.

Utilities: An automatic stay can assist when you’re behind on your utility bills if you are receiving threats to disconnect your gas, electric, water or telephone services. The automatic stay will assist in preventing disconnection for at least 20 days.

Eviction: If you are facing eviction from your home the automatic stay may offer some momentary help. In the instance that your landlord already has a judgment of possession against you, the automatic stay will not affect these evictions proceedings. Additionally, the automatic stay cannot help you if the landlord alleges that you’ve destroyed the property or are using controlled substances there. In some cases, the automatic stay may help you to stay a few more days or weeks, however the landlord will most likely ask the court to lift the stay and proceed with the eviction.

Repossession: If your vehicle is in danger of being repossessed, filing bankruptcy can stop the repossession with the automatic stay. In a chapter 13 filing, a vehicle that has been repossessed recently but not yet auctioned off can usually be retrieved.

Garnishment: When bankruptcy is filed, wage garnishments cease; additionally, you may be able to discharge the debt in bankruptcy. An automatic stay can often prevent collection efforts from overpayment of public benefits, however, the automatic stay does not prevent the agency from denying or terminating benefits in the future for this reason.

Below are some of the situations that the automatic stay cannot assist you with:

An automatic stay does not help with certain tax proceedings. The IRS can still issue a tax deficiency notice, audit you, demand a tax return, issue a tax assessment or request payment of an assessment. The automatic stay will stop the IRS from issuing new tax liens or seizing property and income.

The automatic stay will not help you in during a lawsuit against you seeking to determine paternity or to establish, modify or collect child support.

Creditors can ask the court to lift (remove) the automatic stay for various reasons. This generally happens 21 days or more after bankruptcy was filed. When there is any doubt about what an automatic stay can assist with, contact your bankruptcy attorney at Heartland Law for more detailed information specific to your case.

Credit Card Use Before Bankruptcy

If you plan on filing for bankruptcy, it is never a good idea to accrue new debt right beforehand. While it might be tempting, using your credit cards immediately before filing for bankruptcy can lead to complications that include not being able to discharge that portion of your debt.

The majority of credit card debt is dischargeable through filing for bankruptcy, however credit card charges of $600 or more in luxury items, charged within the 90 days prior to filing bankruptcy are considered non-dischargeable. A credit card charge that transpires within the 90 days before filing may not be discharged if the creditor can prove that there was no intention of paying back the debt. This also goes for cash advances.

Additionally, some creditors will look at overall credit card usage in the 6 months prior to filing and object to a discharge if the charges are excessive and appear to be done in contemplation of bankruptcy. So the best rule of thumb is not to use any credit cards right before filing for bankruptcy once you have met with an attorney and/or know you plan to file bankruptcy.

Cash advances and certain purchases that occurred immediately before filling bankruptcy can be perceived to be fraudulent. So if you purchased a computer, a new car or an expensive designer bag and plan on filing for bankruptcy, be mindful that a lawsuit from your credit card company objecting to your discharge may follow.

Be sure to inform your bankruptcy attorney of any purchases of $600 or more that you’ve made on your credit cards because in most instances it may be in your better interest to delay filing until after the 90 day presumption period has passed.

If purchases right before filing for bankruptcy are for necessities like food and diapers, typically your credit card company will be slightly more understanding. Using a credit card to buy essentials like food can also be a good indicator of financial distress to a credit card company. However they won’t be so understanding when the purchase is a luxury item, or if the necessities are excessive and total a lot of money.

If you are unsure about any purchases you’ve made within the 90 days before you are planning on filing for bankruptcy and are wondering if your credit card debt can be discharged, consult with your bankruptcy attorney for more information.

Heartland Law LLC 700 E. 8th #700 Kansas City, MO 64106 Phone 816-842-6700 Fax 816-337-3812 www.heartlandlawyer.com

Step Parent Adoption

When a step parent by marriage seeks to legally adopt the child or children of his/her spouse, it is commonly referred to as a “step parent adoption.”

In Missouri, the step-parent and the legal/biological parent may jointly petition the local Family Court for an Order of Adoption. The second biological/legal parent, if living, could execute a verified Consent to Adoption. The Consent to Adoption will be filed along with the Petition and if accepted by the Court, will terminate that parents’ rights to and over the child and end any legal support or other obligations as well.

When the parties petition jointly the Court may waive the home study.

If the second parent cannot be located, the Petition might include language to establish neglect and abandonment of the child, which if proved, could be the basis to terminate that parents’ rights to and over the child. (However, should the second parent oppose the adoption, the adoption will likely be impossible.)

Adopting creates legal rights and obligations to the child. The child will become a legal heir, and the adoptive parent will have obligations to provide financial and emotional support to the child. One adoptive father says, “He was already mine. It was just a matter of paper work.”

For more information on the process contact your Attorney Charice Holtsclaw at Heartland Law at 816-842-6700. Your first consultation is always free.