As a mother of four girls, the financial burden of college is a grim reality that I have had to deal with for the past 17 years.  I am a proud lawyer mama with 2 children having already entered professions and 2 on their way!

Even though I am extremely proud of my girls’ accomplishments, I am aware of how the stress of payingback student loans is not only a concern for the soon to be launched student, but for their strapped families as well.  The cost of college has greatly increased in the last decade and has risen beyond most families’ reach, making a vital piece of the “American Dream” less accessible to low and middle income families.

As a nation, we find ourselves in a student loan debt crisis. Young adults have relied on education loans to fund a college education, but not realizing the long term financial consequences, and facing a depressed economy, frequently find themselves with no job, but plenty of education debt. That wasn’t supposed to happen!

The student loan market is one of the least understood markets.  Now is the time to have a national discussion not only about private and federal loans and how they work, but also a discussion about whether these loans should be treated any differently than other unsecured loans when the borrower is in crisis.

Unlike credit cards, cash advances, car loans, and even some tax bills, it is almost impossible to discharge a student loan in bankruptcy.  To do so, you must show that payment of the debt “will impose an undue hardship on you and your dependents.”
Courts often look at different circumstances when evaluating whether a particular borrower has shown an undue hardship. The most common test requires a showing that the debtor cannot maintain a “minimal” standard of living if forced to repay the student loans, that there are other factors making the situation likely to persist for a very long time, (like permanent disability) and that the borrower has made good faith efforts to repay the loans.

If you have student loans, it is a good idea to first consult with a lawyer if you are considering bankruptcy. And even if you can’t prove undue hardship, repaying your loans through a Chapter 13 bankruptcy plan might be right for you.  Be sure to mention your student loans in the first consultation.

Contact the Law Office of Debra G. Simms for your bankruptcy consultation.
Debra G. Simms

Frequently, my bankruptcy clients come to me after reaching out to debt consolidation companies.  They want to solve their debt problems by avoiding bankruptcy.  They have already paid thousands of dollars with very unsatisfactory results.

I’m all for avoiding bankruptcy if possible, but are these companies legitimate? Can they really help?
Here is a typical scenario:
Clients have about  $50,000 in debt.  The net income is around $4,000 a month.  The debt consolidation agency tells the clients if they pay $1,200 per month they could pay off the debt over a 52 month period.  The service fees range from $50 – $150 per month or more.  Recently, my client, who receives Social Security and a small pension told me she was paying $1900 per month!
Here’s my reaction:  these companies are not doing anything the clients couldn’t just do themselves. They are paying $mega bucks per month for somebody to make phone calls and send out checks.

But, I got to wondering – do they EVER work?  So, I asked my friend, Sam, a debt collector.   Here’s what he said:

“As a debt collector, I’ve had occasion to deal with a number of debt settlement companies, and can say I NEVER think it’s a good idea for a consumer to employ the services of such a company.  First, these companies simply do not do anything for a consumer that he or she could not do for his or herself.  (I thought so!)  Second, it’s ridiculous for a consumer to pay thousands of dollars to such a company when those dollars could actually go to paying down debt. Third, and this is the big one, when a consumer hires a debt settlement company, collectors look at that action as an invitation to sue.  Why?  Debt collection success is predicated on communication with a debtor.  If a collector cannot speak with a debtor, make payment arrangements, etc., there is nothing left to do but file suit.”

Then I asked Donna, a consumer advocate lawyer friend of mine, what she thought about these companies.  She said:
“HIGH potential for scam activity with these things.  I’ve heard of them taking the payments and never giving them to the creditors – putting the debtor in an even worse situation.”
Then I asked her, “Can’t these folks just do the same thing for themselves?”
Typical lawyer, Donna answered,  “Well, yes and no. Sure the debtor can talk to his own creditors and negotiate with them. But it’s about as effective as a non-lawyer representing himself in litigation. A lawyer or advisor who knows what he is doing will likely produce a much better result. Of course, it’ll cost something to achieve.”
Last, I  asked my bankruptcy guru lawyer friend, Steve, and he added this to the debate: “The Fair Trade Commission added debt settlement to its telemarketing sales rule, but this only regulates a debt settlement company who talks to clients on the phone, including if a client calls them.  It prohibits upfront costs, but there is no cap on the amount of fees they can charge.  And, there is no regulation of internet companies.”
So there you have it!   When the evil debt collector, the consumer advocate, and the bankruptcy guru all agree on something, you have to take notice!
Before you hire a for-profit debt settlement company, call the Law Office of Debra G. Simms.  Toll free: 1-877-447-4667 for your  consultation.
Debra G. Simms
This is a topic near and dear to my heart.
Don’t let your ex trash your credit!
When my friend, Sally, got divorced last year, her ex agreed to pay off their $25,000 in  credit card bills.  This was part of the property division and was made part of the divorce judgment.
Ever since then, creditors have been calling and writing her because her ex is late or fails to make a payment.  Last week, she was served with a lawsuit from Capital One.
Despite the divorce agreement, Sally is still on the hook.  Her credit is trashed and now she has to deal with a lawsuit and possible wage garnishment.  Sally told me, “I just assumed my responsibility ended once the divorce was over.”
I always tell my divorcing clients:  Creditors don’t care how bills or loans are divided in divorce.  If it’s a joint debt, it stays that way.  The credit card agreement or mortgage note trumps the divorce.
So, what should Sally do now?  If she decides to pay off the cards and restore her credit, she might be able to go after her ex for reimbursement in divorce court.  If she can’t pay off the debts, she can always consider bankruptcy.
But, I consider myself a preventative law attorney, so I am going to tell you what to do BEFORE the divorce:
Track down all your credit cards.  Pull your credit report to make sure you know about all your active and open accounts,  even those with a zero balance.  Contact all the lenders and do the following: close or freeze the account and remove authorized users from account.  If you can’t close all the joint accounts because there is a balance or the lender requires both signatures, try to at least freeze the account.  If both signatures are required, do what you can to get it.  Follow up is crucial.
Meanwhile make sure the bills are getting paid.  Divorces can take months and all it takes is one late payment to hurt your credit.
And here’s a side note:  Don’t go crazy opening new accounts in your individual name.  This can actually have a negative effect on your credit score.  Only apply for the credit you need.  And that’s some good advice, whether you’re divorcing or not.
Debra G. Simms

To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.

Have you seen or heard the debt relief advertisements about how people who owe more than $10,000 in credit card debt can get relief under the Obama financial bailout plan?

It goes something like this:  The relief given to large financial institutions under the economic stimulus plan is now available to Main Street. Large creditors were given billions in government stimulus money and now have more flexibility when it comes to negotiating personal debt bailouts through a debt settlement process  The ads go on to say: A debt settlement company can negotiate a settlement of up to 60% and this will only have a minimal impact on your credit score.
Sounds like a pretty good deal.
It would be a good deal if it were true. There is no government bail out program that allows you to get out of debt.

Here are your options:

1. You can file for bankruptcy and your debts will be legally discharged.
2. You, or your attorney, can negotiate with your credit card companies.  Each one has different guidelines.
3. You can let your creditors sue you. You may have some legal defenses.  You can always negotiate.
Before signing up with any of these debt relief agencies, talk to a licensed attorney.
Debra G. Simms

To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.

Chapter 7 Bankruptcy

3020812270_5e72fd474b_mOur Federal Court has come through for homeowners who have second mortgages or Home Equity Loans where their home is not even worth what is owed on the first mortgage!  Homeowners who have such mortgages can get rid of them in Chapter 7 Bankruptcy!
This is called “stripping off” an unsecured lien.  Prior to the recent case of In re McNeal, just decided on May 11, 2012, debtors could only strip off a second mortgage in Chapter 13 Bankruptcy, an option just not viable for many homeowners with little disposable income.
This is the first circuit level court to reach this holding.  But beware: this decision is subject to reversal on rehearing.  If you are contemplating such an action in order to save your home, act now while the Middle District of Florida is bound to follow this new law.  In a month or two, it may be too late.
Call the office of Debra G. Simms for your bankruptcy and debt relief consultation.  We have represented consumers for 25 years.
We now serve Central Florida in Orlando, and Daytona Beach.
Call us toll free at 1-877-4667.
Orlando Office: 407-331-4LAW.
Act Now!
Debra G. Simms
To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.

The holidays are over and it’s time to get back to reality!  Many of us have made New Year’s resolutions to manage our money better and some of us even mean it!

Living off of credit cards

In my law practice, I have been seeing a lot of folks who have been living off of credit cards.  They just can’t do it anymore.  Sometimes they can’t manage the minimum payments, or the credit limit has been used up, or in many cases, they just can’t handle the stress anymore.  These people need relief!

Here is my New Year’s list of reasons to consider filing for bankruptcy.  If you are in any of these situations, please contact my office for a CONSULTATION.  It doesn’t cost anything to ask.
    • You are being sued by  a creditor.
    • Your home is in foreclosure.
    • You have lost your job and haven’t found new or similar employment.
    • You have had a decrease in income, but not a decrease in expenses.
    •  You have overwhelming medical or credit card debt.
    • You are struggling to pay for your home or vehicle.
    • Your credit card minimum payments have increased because the company just raised the interest rate even though you have been faithfully and painfully make the minimum payments.
    • You don’t have any more credit.

Chapter 7  vs Chapter 13 Qualifications

When you visit our offices for BANKRUPTCY LAW CONSULTATION, I will explain the bankruptcy process to you.  I will determine if you qualify for a Chapter 7 which is simple, inexpensive, and results in the discharge of almost all unsecured debt.  When debt is discharged, you no longer have to pay it.  A typical Chapter 7 case takes about 4-6 months to go through the court system.

I will also explain a Chapter 13 to you.Chapter 13’s are designed for people who make too much money for a Chapter 7 or for people who are trying to get caught up with payments on collateral such as a home or a car. In a Chapter 13 bankruptcy, people make payments over a 3-5 year period to a bankruptcy trustee who pays the money to creditors. All unsecured debts are then discharged.

A lot of people are worried about whether they can keep their home, furniture or cars if they file for bankruptcy.  Generally, in Florida the law allows for complete protection of your home and provides exemptions to cars and other property, depending on the value.

Financial problems are stressful.  Don’t wait for it to get worse. Contact Florida Bankruptcy Attorney Debra G. Simms today for help with your case

To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.

Debra G. Simms

8268391500_e15e941452_zThis time of year many of my clients are considering bankruptcy.  They have held off as long as possible and now that the holidays are over, they know they need some debt relief.  The most frequent question asked is: How badly will bankruptcy affect my credit score?

Even after 23 years of practicing law, I have a hard time answering that question.  Folks want quantitative answers.  But even though they seem based on a logical arithmetic equation, credit scores are funny things. The calculation is a mystery, as is some of the logic behind it. The formula is a secret of the companies who generate the scores!

Credit scores are fluid

We do know that if we pay our bills on time, our score will be good. If we do not, it will be bad. Credit scores are fluid. They go up and down constantly, and some of the triggering events aren’t even reflective of our credit worthiness.  For example, have you ever looked at your credit score after applying for and receiving a new credit card at the check-out lane (so you can get that 10% discount?)  You got the new card because your credit is good.  But, getting the new card causes your score to drop!  Ever been told by a mortgage broker that you have too many recent credit inquiries on your report?  Well, of course you do!  You have been shopping around for the best mortgage rates!

Considering bankruptcy?

So, should you care that your credit score will be affected by a bankruptcy?  My answer is no.   Credit scores, in and of themselves, are meaningless. Your score does impact your ability to get credit and that which the credit buys you (the new home, new car, new clothes, etc.), but really, folks, do you want more credit right now?  Actually, bankruptcy might even help your score – in the long run.  Let me explain.
If you can’t pay your bills on time, your credit score will continue to decline and the decline will continue as long as you struggle (and fail) to pay all your debts.  On the other hand, if you file bankruptcy, your credit score will be impacted initially, but once your bankruptcy case is closed and you begin to reestablish good payment history, your score will start to improve faster than if you continue struggling (and failing) to pay the bills you cannot now afford.
If you are in the central Florida area near and around Orlando or in The Villages and would like to schedule a consultation with me, feel free to call Toll free at 1-877-447-4667.
Debra G. Simms
To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.
Lately, I have been talking to a lot of folks who are considering hiring debt consolidation companies. Those of you who have already consulted with me or have read my blog on this subject (November 2, 2010) already know what I am going to say …Don’t do it!

3020812270_5e72fd474b_mChapter 13 bankruptcy vs. Consolidate debt

For those of you who want to consolidate your debt,  the better option can be Chapter 13 bankruptcy. Not only does the law provide that your debts be consolidated and reorganized in a Chapter 13 plan, but Chapter 13 allows you to reduce the amount you owe on certain secured debts to the value of the collateral.
For instance, if you owe $20,000 on a car that is only worth $10,000, you can reduce the debt to only $10,000 and pay off that amount in equal installments over the life of your 13 repayment plan. This strategy is called a “cramdown.”Doing this allows you to keep your car and be able to afford the payments in your plan.
You can’t cramdown mortgage liens on your home, but what you can do is “strip off” a second or even third
mortgage and treat it as an unsecured debt in your Chapter 13 plan. This might be an option if the current market
value of your home is less than what you owe on your first mortgage (“underwater”) leaving no equity to secure the
second or third mortgage.
This procedure allows you to greatly reduce the amount you have to pay each month to stay current on your
home. For example, assume you pay $1,500 on your first mortgage, $750 on your second, and $400 on your third
(this might be a home equity loan). If your home is worth $200,000 and you owe at least that much on your first
mortgage, you can strip off the second and third mortgages. This would reduce your monthly mortgage payment from
$2650 to $1,500.
Sounds good, doesn’t it?  Better than paying a debt consoldation company AND still end up losing your home?
At the Law Office of Debra G. Simms, we offer bankruptcy consultations.  What have you got to lose?
Debra G. Simms
To contact attorney Debra G. Simms, P.A. in Port Orange or New Smyrna Beach, FL please call 877.447.4667.

Contact Us

Port Orange Office:
Prestige Executive Center
823 Dunlawton Ave. Unit C
Port Orange, FL 32129
Local: 386.256.4882
Toll Free: 877.447.4667
New Smyrna Beach Office:
817 E. 7th Ave
New Smyrna Beach FL, 32169
Local: 386.256.4882
Toll Free: 877.447.4667