Penalties, Fine, and Restitution

The bankruptcy discharge can wipe out a wide range of different types of debt. This includes credit cards, medical bills, personal loans, repos, and even old taxes. However, there are a range of non-dischargeable debts in bankruptcy. One of the types of nonchargeable debts are for penalties, fines, and restitution.

Criminal restitution is never dischargeable in bankruptcy. You may be forced to pay criminal restitution if you have been convicted of a crime (or plead guilty) which caused damage or loss of property. Restitution results in you having to repay the victim over a period of time. It is the policy of bankruptcy law that these victims should not have their payments discharged through a bankruptcy. In practice, this is quite rare, and very few bankruptcy filers are in the midst of criminal restitution.

A more common occurrence is a bankruptcy filer who is in the midst of paying penalties or fines for something like a DUI. These fines are also not discharged. There may be some question as to whether or not these fines can be collected during the duration of the bankruptcy, but either way they must ultimately be repaid.

The most common penalties and fines that I see fairly often with my clients involves things such as parking tickets and turnpike tolls.  Most drivers have received a parking ticket or an unpaid told at some point in their life. These will not be dischargeable in bankruptcy, and must be repaid. In general, if it is money owed to the government for some type of penalty, it will normally not be discharged in bankruptcy. 

If you are considering filing bankruptcy or have questions about it, or what is dischargeable, call us at 412-414-9366. I would be happy to set up a free consultation and discuss your situation.

Financial Resolutions

January is the time for New Year’s resolutions. It’s also a good time to make some 2024 financial resolutions. What are some useful steps and information to review in order to set up your 2024 financial outlook?

The first step I always recommend is to make a budget. Sit down and list all of your household income, regular or otherwise, and try to come up with an average of your monthly take-home income. Next, to the best of your ability, try to come up with a monthly average of all your household expenses. The most important thing when determining expenses is to be honest. The only way this exercise will be useful is if you are honest about your expenses. If you say that you have $20 a month in streaming services, but when you sit down and review it, it’s actually closer to $100 a month, the lower amount does no good in determining your expenses.

The most common areas that people underestimate are for entertainment, eating out, gambling, alcohol, and cigarettes. People generally underestimate how much it costs to maintain their home and their vehicle. Going through a budget will give you an idea of where your money is really going, and help you determine what is necessary and what is not.  You will be surprised with how much money you can free up.

The second step I would recommend in looking at your finances would be to run a free credit report. Get an idea of what is out there and what you owe. Just as people underestimate some of their expenses, they also underestimate some of their debts. Combined with your budget, sit down and figure out how much a month you are spending to maintain and service your debt. Not surprisingly, people will underestimate this as well. Having a grasp on your total debt is essential to making a plan to deal with it.

A third step I would recommend is to write out your financial goals for 2024. It might be a matter of paying down your credit cards or reducing expenses. You may also want to set goals for savings. If possible, maximize any matching contributions for retirement accounts with your employer. Set up a separate savings account with your bank and try to put away a certain amount per paycheck into that account, not to be touched for anything except the largest emergencies.  Financial goals help us to focus and keep us accountable.

If your financial burdens feel impossible to tackle, contact us at 412-414-9366. I would be happy to set up a free consultation to discuss your situation. While I primarily focus on bankruptcy,  if there are other options, I would be happy to discuss them with you. When your debt seems immovable, bankruptcy sometimes is the best option. Try to put yourself in the best position for 2024 and going forward.

Holiday Spending

The holidays are upon us, and they a great time to catch up with family and friends, and recollect on the year before. This is a time to hopefully relax and enjoy some comforts of life. However, the holidays are also notorious for stress. And some of this stress is related to money and finances.

Americans spend large amounts of money during the holidays by traveling and purchasing gifts. When your finances are already stretched, this can lead to lots of stress. No one wants to think about bankruptcy this time of year. But, sometimes it is a growing necessity due to credit card debt, which can feel like a relentless wave. Interest makes the idea of minimum payments hopeless. No matter what you do, you end up in the same place every month.

If you were considering bankruptcy, the time after the holidays is a great time to seek out a free consultation.  Removing or reducing your financial burden is a great way to start the new year. If you feel like you can’t keep up with growing interest and debt burdens, contact us at 412-414-9366 to set up a free consultation to discuss your situation.

Bankruptcy is not always necessary, but getting some feedback on your situation for free never hurts. Over the past 15 years I have literally talked to thousands of people facing the stress of mounting debt. There is often a solution.

In the meantime, have a happy and safe holidays.

Married Couples In Bankruptcy

Married couples are not required to file joint bankruptcies. One individual alone may file. Of course, both can file together as well. A common question I get is “I want to file bankruptcy, but my spouse does not want to be involved. Do they have to be?”

While they are not required to file jointly with you, there is certain information about your non-filing spouse that needs to be disclosed. First, the court will look at both incomes in determining the means test and the ability to repay. Even if only one spouse is filing, entire household income is used in determining the ability to repay. This includes income for things such as Social Security, retirement, accounts, pensions, or self-employment. This information cannot be omitted. The court will also want to look at any joint tax returns. Total household income will always be important to determine.

A second thing the court will want to look at for a married couples is equity in a marital home. Even if only one spouse is filing, the home and its equity must still be exempted from your creditors. If the home is owned jointly in a marriage, the equity in that home is split in half for bankruptcy purposes. That amount must be exempted. This will go for other assets as well, such as second properties, rental properties, vehicles, or marital savings.

A final thing which will be important to discuss with your bankruptcy attorney is whether it makes more sense to file jointly to account for all debts. In a scenario where there are many joint debts, filing for only one spouse usually does not make much sense. If both spouses cannot be convinced to do so, they’re not required to. However, if they later to decide  to file on their own it will entail all new attorney and filing fees. It’s best to think long and hard whether or not filing jointly is the best way going forward.

If you and your spouse are considering whether or not to file bankruptcy, call us at 412-414-9366. I would be happy to set up a free consultation to discuss your situation and see if bankruptcy is an option for you.

Gambling Debt and Bankruptcy

People are increasingly calling me with gambling debt problems. It’s not a surprise, as online gambling and sports books have rapidly proliferated the last several years. Fortunately, bankruptcy can help with these debts. However, there are several additional issues that must be accounted for.

The first issue with gambling that is that you cannot have recent credit card usage to pay the debt, otherwise it may be considered “abuse” of the credit cards. This would allow the credit card and finance companies to object to the discharge of the debt, leaving you with the debt . It will be important to show a period of time between your last credit card usage for gambling and the filing of the bankruptcy, normally between 90 and 180 days.

Additionally, it may show clear intent if you enter a program to deal with the gambling issue, such as gamblers anonymous. Bankruptcy aside, this would be a good idea as gambling addiction is a serious addiction , that should be treated like all other addictions. Regardless, there will need to be time between your gambling losses in the filing of the bankruptcy.

The second main issue with gambling debts is that they tend to reoccur even after they’re discharged in bankruptcy. I have had several clients call not long after the Chapter 7 discharge who are in a similar predicament as they were before they filed. This is problematic because you can only file a Chapter 7 bankruptcy every eight years. Going back to my earlier thought, it really shows the importance of treating gambling as the addiction that it is and seeking help. In reality, bankruptcy is only temporary help with the problem. A longer term solution will require seeking the help of addiction specialists.

If you are facing gambling debts, contact us at 412-414-9366. I would be happy to discuss your situation, go through the details, and make sure that you qualify. It is a common problem faced by many Americans at the moment, so there is no need to judge yourself, or beat yourself up about it.