More Families Qualify for Chapter 7 Bankruptcy!

Great news for families needing to file bankruptcy in Fresno!  In order to qualify for a Chapter 7 bankruptcy, most families have to pass the "means test".  In very simple terms, the "means test" takes a family's income which is then reduced by certain expense allocation.  If a family's net income is less than the established guidelines, the family qualifies to file a chapter 7 bankruptcy.  If the income is higher than the set guidelines, then it becomes much more difficult to successfully complete a chapter 7 case. 

 The recent good news is that the median income guidelines were raised.  Thus, more families qualify for chapter 7 bankruptcy.  If you are single, the new median family income is $48,415.  It used to be $47,433.  A family of 2 is allowed $63,030.  It was $61,752.  A family of three is $67,401.  It was $66,034.  A family of four is now allowed $75,656.  It used to be $74,122.  If you have a larger family, add $8,100 for each member in excess of 4.  You can view the guideline table at the United States Department of Justice's website: http://www.justice.gov/ust/eo/bapcpa/meanstesting.htm

Using the means test properly is important to a successful outcome.  About two years ago, I had a family that did not qualify under the means test.  However, the wife was pregnant.  I waited to file their case until after their baby was born.  Their family size increased by 1.  Thus, I was able to use a higher median income and they passed the means test. 

The new "means test" data changes frequently.  These numbers should be good until November 1, 2013.

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

photo: http://www.flickr.com/photos/evilerin/

Giant Creditor, Midland Funding LLC, Loses at Trial

Modern day rebels have defeated the Imperial Storm Troopers, a.k.a. Midland Funding LLC!

A debtor sued by Midland Funding, LLC won at trial and is has now sued Midland Funding LLC for unfair practices and malicious prosecution.  

In Fresno County and the rest of California’s Central Valley, Midland Funding, LLC, has filed thousands of cases on behalf of credit card companies and other creditors.  Most of the time Midland hopes that the defendant never responds to the lawsuit.  However, if the defendant responds, they hope to settle the case before it ever goes trial.             

In Samuels vs. Midland Funding, LLC, 2013 Westlaw 466386 (S.D. Ala.), defendant Samuels fought Midland Funding.  He did not settle the case but forced them to trial and won!.  He then sued Midland funding.  This case looked at whether it was permissible for Samuels to sue Midland after it lost at trial.  So far, the court is saying that Samuels has a valid lawsuit against Midland Funding. 

Before looking at the details in this case, let’s take a step back.  Midland Funding is notorious throughout the country for buying debt in bulk.  Just like how you can go to Costco and buy a 100 rolls of toilet paper in bulk, Midland Funding purchases blocks of debt at a discount.  It then tries to collect on the debt.  Their goal is to collect more money from debtors than it cost them to buy the debt.  They are very good at what they do.  The problem bulk debt purchasers have is that they sometimes fail to obtain the documents, or understand the facts well enough to win at trial.  

In the Samuels case, the debtor was smart.  He figured out that Midland Funding could not prove its case and refused to settle with them.  By refusing to settle, Samuels forced Midland to trial.  They were completely unprepared for trial.  They showed up with no witnesses or documents to show the debt was owed by Samuels.  Like many “bulk purchasers” of debt – they were hoping to settle the case or that Samuels would ignore the lawsuit so that it would not have to prove their case in front of a jury, or judge.  They must have been shocked Samuels took them all the way to trial because they showed up with no witnesses or evidence to prove the debtor owed the debt.  Needless to say, the Samuels won the case. 

But, the story does not end here for Midland Funding.  Samuels went on the offensive.  He filed a second lawsuit against Midland Funding for violation of the Federal Debt Collection Act and malicious prosecution.  Midland Funding’s high powered attorneys tried to kick the case out before it was tried by a judge or jury.  However, they lost the motion and tried to win on appeal.  However, they lost again.  The court held that it was concerned with bulk purchasers of debt that were unable to prove their cases.  Now it looks like Midland Funding has to convince Samuels to settle his case against them by paying money to him.  I hope Samuels takes this case to trial.  It would serve Midland Funding right if it is proven they were never in a position to win their case at the trial level. 

The lesson to take from this case is to not be afraid of these national debt companies.  Defend yourself!  Make sure the claim is valid and that the debt collector can prove its case at trial.  If they cannot do this before trial, they likely will fail at trial as well.  It is unfortunate that very few defendants in Midland Funding cases know this.  Do not be one of them.  

Attorney Ken Jorgensen is located in Clovis, California.  He handles personal, property and business disputes, including bankruptcy and eviction cases.  You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com.  He can be reached at jorgensenlaw@gmail.com or by telephone at 1-559-324-1882.

photo:  http://www.flickr.com/photos/snotch/