September 20, 2014

In re: Vaughn, et al: On Bankruptcy Actions Where the IRS is a Creditor

Our Birmingham bankruptcy lawyers understand that a prior year's tax debt may be a major factor in one's decision to declare bankruptcy.

In re: Vaughn, et al, an appeal argued before the United States Court of Appeals for the Tenth Circuit, involved an adversary bankruptcy proceeding started by Appellant. According to court records, Appellant was the Chief Executive Officer of a cable television company. Though Appellant had little, if any, education beyond a high school diploma, his substantial practical experience took him very far in the industry.

As the head of the cable company, Appellant turned the company from a small entity into billion-dollar organization. When the company was sold, Appellant received over $30 million in cash and stock.

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September 16, 2014

Galaz, et al v. Galaz: On a Bankruptcy Court’s Jurisdiction to Decide on Non-Core Issues

In Galaz, et al v. Galaz, et al, an appeal argued before the United States Court of Appeals for the Fifth Circuit, Debtor filed an adversary proceeding against her ex-husband in bankruptcy court. As your Chapter 13 bankruptcy attorney in Birmingham can explain, an adversary proceeding generally involves a petition filed by a potential creditor to challenge the discharge of an asset, or another aspect of another’s bankruptcy case.

In Galaz, Debtor filed a petition that asserted her ex-husband had fraudulently transferred the assets of a company in which she had an interest to a LLC owned by his father. Her ex-husband and a music producer founded the company for the purpose of collecting royalties for a now disbanded funk group.

Even though the company was no longer generating a profit, as part of their divorce settlement, Debtor’s ex-husband transferred half of his 50 percent interest in the company to Debtor. Due to the fact that Debtor’s ex-husband did not receive written approval from his business partner, as per the operating agreement, Debtor received a 25 percent interest in the company with no right to participate or vote on company affairs.

After the divorce, and without the consent of either Debtor or his business partner, her ex-husband assigned all of the companies to a company that did not exist. After doing this, he assisted his father in filing the necessary documents to form a company of the same name, to which he transferred the royalty rights. At this point, the music from the old punk rock group became commercially successful and millions of dollars of royalties were paid to this newly created LLC. Neither Debtor nor her ex-husband’s business partner received any money from the sales of the band’s music.

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September 9, 2014

Peoples v. Radloff: On Standing to Appeal Bankruptcy Court Orders

Peoples v. Radloff, an appeal from the United States Court of Appeals for the Eighth Circuit, involved a debtor (“Debtor”) who filed a lawsuit in state court against her employer, the city government (“Employer”) on several counts of employment discrimination.

Two years later, Debtor filed a voluntary petition under Chapter 7 of the bankruptcy code. As your Alabama bankruptcy attorneys can explain, Chapter 7 is often the best option for many debtors.

In Radloff, Debtor did not disclose her pending lawsuit against city government as an asset when filing her petition for Chapter 7 bankruptcy. The court granted Debtor’s petition and discharged her from bankruptcy. The petition was listed as a no-asset filing in court documents.

After this point, in her civil case, Employer filed a motion for summary judgment to dismiss Debtor’s action on grounds that Debtor failed to include the suit in her bankruptcy petition. Debtor then filed a petition to reopen her bankruptcy case, so that she could disclose the fact that she was involved in an ongoing civil lawsuit.
The bankruptcy court allowed to reopen the proceeding; however, the Chapter 7 trustee determined that Debtor’s interest in any proceeds from the litigation was an asset that should be given to creditors.

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August 18, 2014

Fighting Back Against Debt Collectors: Statute of Limitations

For consumers, one of the most stressful consequences of mounting debt is creditor harassment. Stacks of letters, countless emails and even threatening phone calls can become the norm for debtors who cannot get ahead. Unfortunately, many American consumers do not realize they are entitled to protections against their creditors. Under the Fair Debt Collection Practices Act, collectors must follow specific guidelines when seeking to collect debt. Any violations could give the debtor the right to take legal action against a creditor. Similarly, some laws will make debts null and void.


Every state has a statute of limitations on debt collection. This means that after a certain period of time, debtors no longer have the right to come after you. Our Birmingham debt relief attorneys are dedicated to helping protect consumers against unscrupulous creditors and unfair debt collection practices. In addition, we will help clients explore debt relief options, including Chapter 7 or Chapter 13 bankruptcy. We know the quickest way to eliminate unwanted debt is through the bankruptcy process.

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August 11, 2014

Birmingham Bankruptcy Watch: Predatory Lending in the Auto Industry

Since the 2008 mortgage crisis, legislators, consumer watch groups and other advocates for low-income borrowers have been paying closer attention to predatory lending techniques. While most attention has been paid to lending in the housing industry, car lenders have also been known to target and exploit low-income earners. The federal government is taking action with the auto lending industry where unscrupulous practices have left low-income earners unable to recover from loan debt.

For most debtors, filing bankruptcy comes after years of hardship, trying to pay off debt and make ends meet. Our Birmingham bankruptcy attorneys understand the severe hardship faced by our clients. We know that making the decision to file bankruptcy is often a last resort for individuals who have gone through divorce, unemployment or an illness or injury. Rather than let your debt continue to mount, you can eliminate or reorganize debt to get back on a path towards financial freedom. Our attorneys will review your assets, debts and income to determine the best solution for you and your family.

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August 11, 2014

Military Members Get $92 Million in Predatory Lending Settlement

Consumer advocacy groups have found that military members and their families have been the target of predatory lenders. Now more than 17,000 military personnel along with other consumers will receive $92 million in debt relief as part of a settlement involving improper lending practices. According to Reuters, Colfax Capital and a subsidiary used mall kiosks in areas that specifically targeted individuals living near military bases, into taking out loans for computers, electronics and other computer products. The company, formerly operated as ‘Rome Finance Co,’ was notorious for hiding expensive charges and using misleading financing contracts that downplayed the full cost of the loan. As part of the settlement, Colfax also agreed to stop collecting unpaid debts.


While military members were the alleged target of the improper lending practices, other consumers suffered as well and will be able to stake a claim to the debt relief settlement. Our Birmingham debt relief attorneys are dedicated to protecting the rights of Alabama consumers. We help our clients pursue all debt relief options, including bankruptcy and other legal action to stop harassing creditors and debt collection companies. Chapter 9 and Chapter 13 bankruptcy allow you put an immediate end to creditor action, including foreclosure proceedings.

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August 2, 2014

One-Third of Americans Have Debts in Collection

The ongoing impact of the recession has resulted in job loss, upside-down mortgages, and debts, compounded by divorce and medical expenses. For millions of Americans, debt and creditor harassment has become the norm. According to a recent study conducted by the Urban Institute, more than 35% of Americans have debts and unpaid bills that have gone to collection agencies. While some of these debts may be only a single utility bill, a significant number include credit card and other debts in the tens or hundreds of thousands of dollars.

For most Americans, debt accrues over time or may be the result of a single, unexpected event such as an injury or sudden job loss. While many consumers will try to get ahead, the struggle may turn impossible as debts are turned over to collection agencies. Our Birmingham bankruptcy lawyers are committed to protecting the rights of our clients. We will take the time to review your assets, debts, and income to determine if bankruptcy is the right option for you. In addition to putting an immediate end to creditor harassment, filing bankruptcy will stop all legal action including lawsuits and foreclosure proceedings.

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July 25, 2014

Citigroup Settles Subprime Mortgage Lawsuit for $7 Billion

In another settlement that favors borrowers of Alabama, Citigroup has agreed to pay $7 billion. Of that $7 billion, 2.5 will go to pay mortgage relief for homeowners. The settlement was announced by U.S. Attorney General Eric Holder and involves mortgage-backed securities the bank packaged and sold to investors prior to the 2008 mortgage collapse. The case is another example of how the sub-prime mortgage market caused significant losses to business, investors, and borrowers involved with loans prior to and even after 2008.


During the height of real estate lending and the secondary mortgage market, banks, including Citigroup pooled mortgages and sold them as securities. Investors who purchased the mortgages on the secondary mortgage market were unaware that many of the loans were made in bad faith and, in some cases, fraudulent. Our Birmingham foreclosure defense attorneys are experienced in helping clients protect their rights through bankruptcy. If you are being threatened with foreclosure, you may be able to protect your rights and investments through bankruptcy. In addition to helping clients achieve debt relief, we are also abreast of legal developments in the mortgage market that may impact consumers, including Alabama borrowers.

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July 20, 2014

Supreme Court Narrows “Retirement Account” Creditor Exemptions

Filing bankruptcy is a legal way to eliminate unwanted and unmanageable debt. For those considering bankruptcy, it is important to remember that there are traps for the unwary, including the potential loss of property and assets in the bankruptcy process.

While many accounts, including retirement and savings, are exempted from bankruptcy, it is important to take informed and strategic action to prevent the loss of an IRA to creditors. According to Supreme Court decision analysts, filers should be reminded that employer-backed 401(k)s and IRA inheritances can be at risk in the event of bankruptcy.


Bankruptcy is a strategic and legal way to eliminated unwanted debts, including medical expenses or credit card debt. When facing the important question of whether to file bankruptcy, it is best to consult with an experienced advocate you can trust. Our Birmingham bankruptcy attorneys are dedicated to representing individuals, families and businesses who are considering legal ways to eliminate debt. We will review your assets, debts and income and help you pursue the best available option, including alternatives to bankruptcy.

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July 15, 2014

Managing and Paying Off Your High-Interest Debt

When faced with overwhelming debt, financial experts agree that you should tackle you high-interest debts first. While interest can accumulate on student loans, mortgages, or even taxes, the most damaging interest can accrue on high-interest credit cards. What is the best way to manage and tackle high-interest debt? Should you get a home equity loan? Take out a new card and do a balance transfer? Continue to make minimum payments? Regardless of the route you take to pay off high-interest debts, remember that long-term credit card debt can be extremely damaging, and in some cases, irreversible.


Our bankruptcy attorneys in Birmingham are experienced in helping Alabama residents protect their rights and recover from overwhelming debt. If you have high-interest credit card debts, you already know the nightmare. Your monthly minimum likely keeps growing, and that is only the interest. Paying off a credit card will be even more challenging, if not impossible, if you suffer from an unexpected medical event, divorce, or job loss.

Here are some tips for tackling your high-interest debts:

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July 10, 2014

State Senator Files Bankruptcy - Nearly $1 Million in Debt

Athletes, celebrities, and public figures, including politicians, are often the target of headlines when they file bankruptcy. The number of high-income earners who are forced to file bankruptcy sheds light on the reality that unmanageable debt can strike any individual, family or business owner.

According to Minnesota Public Radio, Republican State Senator Sean Nienow and his wife filed for bankruptcy on June 1st. According to court records, the couple has more than $900,000 in debt, owing money to the federal government, credit card companies, as well as a former business partner.


The most substantial of the debts is nearly $750,000 the couple owes to the federal government for a small business loan they took out in 2009. The couple stopped making payments on the loan in July of 2010 and the business is no longer in operation. According to documents, the federal government sued the couple for default in March and is seeking repayment of the loan plus court costs and interest. Our Birmingham bankruptcy attorneys are committed to helping individuals, families and business owners explore their debt relief options. We are experienced in Chapter 7 and Chapter 13 personal bankruptcy aimed at restructuring or eliminating debts.

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June 30, 2014

Miss Alabama is Daughter of NFL Star and Bankruptcy Filer

For public figures, bankruptcy can be an embarrassing airing of dirty laundry, especially when financial decisions become scrutinized by the press. Despite these consequences, many celebrities, including professional athletes, have pursued the benefits of bankruptcy to achieve a fresh start. Filing bankruptcy can help families restore security, eliminate unwanted debt, and help to create a solid financial future to help their children in the long run. In another bankruptcy success story, the daughter of former NFL quarterback has been crowned Miss Alabama three years after her father filed for bankruptcy.


Bankruptcy is often a last resort for individuals who have unmanageable debt, including outstanding credit card bills, medical expenses, unpaid utility bills, and other obligations. Taking action through bankruptcy is one way to quickly put an end to creditor harassment and stop any legal action, including foreclosure proceedings. Our Birmingham bankruptcy attorneys are experienced with helping individuals, families, and businesses eliminate unmanageable debt. We can help you explore your options, including Chapter 7 and Chapter 13 bankruptcy to identify the best debt relief solution for you and your family.

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