BANKRUPTCY & DEBT RELIEF AFTER COVID-19

Tens of millions of people lost their jobs because of Covid-19.  Less than half have returned back to work.  More than 50% have not.  The pandemic has hit the restaurant, travel, bar and retail & beauty industries the hardest.  If you’ve become re-employed but are carrying high debt, bankruptcy can protect your income and provide relief.  If you are still out of work, bankruptcy can protect your assets.  More importantly, it will also help with your credit score which will assist in obtaining employment.  The smaller job market has resulted in employers being more selective with applicants.  Your credit score is a significant part of that selection process.

The decision to file for bankruptcy is a difficult and emotional one. However, if you qualify to file for Chapter 7 Bankruptcy, it is almost always the right decision for you and your family’s future. In more than 30 years of helping people achieve a brighter financial future with the help of bankruptcy laws, I have never had one client tell me it was the wrong decision.

While bankruptcy may initially, negatively affect your credit, its impact may not be as detrimental as some think. Most people who qualify to file bankruptcy already have delinquencies, high credit balances, liens, judgments, foreclosures and or other issues that are negatively affecting their credit. In most cases, these individuals are not able to obtain financing or better employment.  Bankruptcy does not make this worse. Bankruptcy creates a clean slate allowing one to start rebuilding their credit immediately.

It is possible to improve your credit score relatively quick, but you must first resolve your outstanding debt. The Attorneys at Bellenot & Boufford LLC can help you resolve your debt and better understand your credit report so you can improve your credit score, lower your expenses and provide a better quality of life for your family.

Bankruptcy is not the end of your financial life, it is the beginning of a better, brighter, financial future. It starts by downloading our Bankruptcy document checklist which identifies the documents that we will need to review your financial situation.

How To Stop & Manage Creditor Harassment

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The collection process begins almost immediately after going past due on your debts. There are ways to avoid the harsh treatment that comes with practices employed by many collection agencies.

First, it is important to understand that it is not a crime to be late on or unable to pay your debt. Contrary to what some collectors threaten, you can’t go to jail. Commercial creditors cannot attach your wages without first obtaining judgment after court proceedings. See the segment from the “Fair Debt Collection Practices Act” below for some of the prohibited collection practices.

Second, never give any debt collector, or anyone on the phone, your personal information. Do not give them your social security number. Never confirm your name, date of birth, phone number, mailing address or any information. Never, under any circumstances, give anyone your bank account or credit card information and authorize them to take money to pay on an account. Never promise to make a payment on account by any means including mailing them a check.

Some of the ways to stop or avoid collection harassment include:

  1. Be proactive. When you realize that you’re not going to be able to make a payment on time, contact the creditor and ask for a forbearance. Then seek financial and budgeting assistance to try and help manage your debts going forward.
  2. When anybody calling advises you that the call is being recorded, regardless of the reason, refuse to speak on a recorded line. Tell them “I will not speak on a recorded line”. This is the only response you give no matter how many times and how many ways they try to convince you to talk. Your only response is “I will not speak on a recorded line”. If they refuse to give up simply hang up. ‘
  3. If you find yourself on a collection call, be courteous and ask the caller for their name, company name, phone number, address and his or her relationship to the primary creditor. If the collector becomes rude, aggressive, abusive or threatening, simply hang up. You don’t have to say goodbye or wait for them to finish their sentence. If they call back again notify the phone company that you are receiving repeated harassing phone calls. You can also call the primary creditor and let them know that their collection agent is being abusive and that you only want to deal with the primary creditor.
  4. Notify the debt collector in writing that you do not intend to pay the debt and / or that you demand all communication with you cease. See below for further details regarding communications between the debt collector and the consumer. Be aware that if you demand the debt collector cease communications, they can begin legal proceedings. You should seek professional advice on how to manage your situation going forward.
  5. Filing bankruptcy will stop all collection action immediately.

These are a few of the ways to stop creditor harassment. If you are unable to pay all of your debts on time, there is a broader issue that you need to address. Stopping a debt collector’s abuse will not relieve you of your responsibility to pay the debt. You should seek professional advice to not only stop the harassment, but to resolve your debt issues.

The sooner you address your inability to make monthly payments on time, the sooner your debt will be in control and you can provide yourself and your family a better quality of life.

The Fair Debt Collection Practices Act:

§ 805.  Communication in connection with debt collection

(a) Communication with the consumer generally
Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt —

(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o’clock antemeridian and before 9 o’clock postmeridian, local time at the consumer’s location;

(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney’s name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or

(3) at the consumer’s place of employment if the debt collector knows or has reason to know that the consumer’s employer prohibits the consumer from receiving such communication.

(b) Communication with third parties
Except as provided in section 1692b of this title, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a post judgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than the consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector.

(c) Ceasing communication
If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except —

(1) to advise the consumer that the debt collector’s further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

If such notice from the consumer is made by mail, notification shall be complete upon receipt.

(d) “Consumer” defined
For the purpose of this section, the term “consumer” includes the consumer’s spouse, parent (if the consumer is a minor), guardian, executor, or administrator.

15 USC 1692d

§ 806.  Harassment or abuse

A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 1681a(f) or 1681b(3)1 of this title.

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

(6) Except as provided in section 1692b of this title, the placement of telephone calls without meaningful disclosure of the caller’s identity.

15 USC 1692e

Serving Danbury, Connecticut and all of Fairfield and New Haven Counties.

3 Bankruptcy Myths Dispelled

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True Or False … Bankruptcy Will Not Discharge Federal Income Taxes?

No! Not true.
Filing Bankruptcy can discharge personal income tax liability if:
•    It is for personal income tax.
•    You did not commit fraud.
•    The tax is due for a tax year that more than 3 years old.
•    You did file the tax return at least 2 years before filing bankruptcy.
•    The income tax debt has been assessed by the IRS at least 240 days before filing bankruptcy.

All My Friends, Family & Employer Will Know I Filed Bankruptcy

While Bankruptcies, like most court proceedings, are a public record, I have not had one occasion in more than 26 years where a client’s family, friends or employer learned of the bankruptcy, other than from the client.

I will Never Be Able To Own A Home Again

No! Not true.
Filing Bankruptcy does not deny your right to own a home or any property. Yes, obtaining financing will initially be an issue, but there are ways to improve your credit score and faster than you think. In the last 26 years I have represented countless people through the bankruptcy process who did refinance their home or purchased a new home, sometimes within a couple of years. Not only are there loan programs that will finance real estate within two years of bankruptcy, but these loans are at market rates, currently as low as 4% – 4 1/2%.  After 3 years of not owning a home, you could also qualify for a “First Time Homebuyer Mortgage”. Yes, even if you previously owned real estate more than 3 years ago. You will need to have sufficient income to support a mortgage and manage your finances properly after filing bankruptcy, but you are not alone.

We can help provide budgeting, financial guidance and other recommendations to begin your new and better financial future. A better quality of life for you and your family.

Contact Bellenot & Boufford, LLC For More Information On How Bankruptcy Can Improve The Quality Of Your Family’s Life.
Serving Danbury, Connecticut and all of Fairfield and New Haven Counties.

What Is Dischargeable In Bankruptcy And What Is Not

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Chapter 7 Bankruptcy will discharge debts that are not excluded pursuant to the Bankruptcy Code. A Bankruptcy discharge enjoins creditors from ever collecting on the discharged debt. Creditors are also prohibited from taking any and all collection action from the date of filing, even prior to discharge entering.

The following is a list of common debts that are discharged in Chapter 7:

  • credit cards
  • medical bills
  • Past due utility bills
  • Property leases, however you will have to vacate if you do not make rental payments
  • Most accident / injury claims
  • Personal loans
  • Income taxes for tax years that are more than 3 years old (Other timing requirements apply)
  • Business debts
  • Most civil court judgments
  • Mortgage notes and car loans / leases (However the collateral is not discharged so you will have to eventually return the property of you do not keep the loan / lease current)

The following is a list of some debts that are not discharged in Chapter 7:

  • Alimony and child support
  • Income taxes that do not qualify for discharged as noted above and most other taxes
  • Most student loans
  • Debts for personal or property injuries that resulted from the willful and malicious acts of the debtor
  • Debts for most fines, penalties, forfeitures, or criminal restitution obligations
  • Debts for death or injury caused by the debtor’s operation of a motor vehicle while intoxicated from alcohol or drugs
  • Debts incurred by fraud or false pretenses


If you are concerned about your financial situation, sit down with a Bankruptcy Lawyer to discuss your options.  A good lawyer will review all options, including not filing bankruptcy.

Serving Danbury, Connecticut and all of Fairfield and New Haven Counties.

Am I Eligible For Personal Bankruptcy?

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Whether one qualifies for personal bankruptcy depends on a host of factors that may change month by month. I will cover some of the basics that should give you an idea if you qualify. It is important to consult with an experienced Connecticut bankruptcy attorney, as local rules and laws differ from state to state.

There is a difference between Chapter 7 bankruptcy and Chapter 13. In a chapter 7 case the debtor is discharged completely of his / her legal obligation to repay all dischargeable debts. Most individuals will be able to use the Federal or State exemptions to protect their exempt property. Almost all of my clients have kept all of their property in Chapter 7.

To qualify for Chapter 7, we look at the debtor’s net income and necessary monthly expenses (This does not include unsecured debts such as credit cards and medical bills). If there is no or negligible disposable income after these expenses, we determine if the debtor is at or below the state medium income for their household size. If the debtors’ household income is greater than the state medium income, we perform the “means test”. If we can satisfy the means test the debtor qualifies.  If the income is below the state medium income, the debtor would qualify without the need for the full “means test”

In Chapter 13 the debtor will repay as much of her / his unsecured debt as possible over a period of not more than 5 years. To qualify for Chapter 13, the debtor needs to establish that their income is sufficient to pay all of their necessary expenses plus contribute to the unsecured debt, pay the Bankruptcy Trustee’s fee, any administrative costs and have a reasonable cushion for themselves. Other factors sometimes apply as well.

There are many other factors that have to be considered. Below are a few:

  • An individual who received a chapter 7 discharge less than 8 years ago, does not qualify to file chapter 7 again until the 8 years expires.
  • Certain debts are not dischargeable in bankruptcy, such as domestic support obligations, most student loans, debts for death or injury caused by the debtor’s operation of a motor vehicle while intoxicated from alcohol or drugs and others listed in the article “Bankruptcy Discharge – What Debts Are Relieved And What Are Not”. If these non-dischargeable debts make up a significant portion of a debtor’s entire debt, bankruptcy may not offer the financial relief sought. In this case we will review other non-bankruptcy options.
  • If the equity in personal and / or real property exceeds the exemption allowed, the debtor could be at risk of losing such property. The debtor will have to determine if the benefit of being relieved of her / his debt outweighs the loss of unprotected property. Non Bankruptcy options will also be considered.

It is rare, but sometimes bankruptcy may not be advisable even if the debtor(s) otherwise qualify. No two debtors’ circumstances are exactly the same. The Law Offices Of Bellenot & Boufford, LLC have more than 26 years of experience and are qualified to help you make the correct decision for you and your family’s financial future and quality of life. Contact us if you are considering bankruptcy so you can make the right decision.

Serving Danbury, Connecticut and all of Fairfield and New Haven Counties.