Senators Orrin Hatch and Barack Obama have recently proposed legislation that would allow individuals in bankruptcy to continue tithing and giving to charities.

Tithing is a scripture-based practice followed by many Christian groups. It means giving a portion of your income, usually 10-15%, to support one's local church. Tithes are usually donated before any personal bills or expenses are paid by the giving person.

In a recent New York case, a bankruptcy judge ruled that debtors can't tithe or donate money to charity if they want the federal protection of a Chapter 13 bankruptcy. The New York bankruptcy judge ruled that because of the recent changes to the bankruptcy code, the $100 a week a New York couple wanted to give to their local church had to be used to pay creditors.

Before the new bankruptcy law went into effect in October, 2005, bankruptcy court judges generally permitted chapter 7&13 filers to tithe a portion of their income each month. In 1998, the passing of the Religious Liberty and Charitable Donation Protection Act allowed debtors filing for bankruptcy to exempt up to 15 percent of their annual income from creditors for tithing or charitable donations.  However, this law was unfortunately wiped out by the October, 2005 law changes. 

Now, Senators Obama and Hatch would like to see similar law reinstated.  I for one agree with them. With all the poverty in our country and people still living in squalor from the devastation of Hurricane Katrina, the last thing Congress needs to do is stifle charitable giving by the American public.  This includes people in bankruptcy.

The bill has already passed in the Senate and has now been referred to the House.  Hopefully Congress and the President do the right thing and pass the bill.

-- Attorney Andrew Partridge


Watch That Holiday Spending

November 11, 2006 - 21:18 by apartridge

This past weekend I read a great article by Diane Loupe in Atlanta’s Sunday Paper titled "Bankruptcy’s Back."

The article states that while national bankruptcy filings plummeted this past year after the law change of October, 2005 -- experts are now predicting that consumer bankruptcy filings will again surge after the upcoming holiday season.  The article reasons that after the holidays many consumers will struggle to make their mortgage payments as adjustable rate mortgages interest rates (ARMs) continue to rise and Christmas-season credit card bills start to kick in. 

Having practiced consumer bankruptcy law myself for many years, I whole-heartedly agree with the opinions of the experts mentioned in this article.  The 1st Quarter of any year (January-March) is always the busiest time of year for bankruptcy lawyers and the Bankruptcy Court.  Overzealous holiday spending is often the cause of this surge of filings, but there are also a couple of other reasons that I believe contribute to this phenomenon.  First, many people use the changing of the calendar as an impetus to address their deteriorating financial situation or make a “New Year’s Resolution” to get themselves out of debt and get their finances on track.  Secondly, the 1st Quarter is usually the time of year that people receive their Holiday bonuses and/or tax returns.  Often people will use this recieved lump sum of money to pay for bankruptcy attorney fees and court costs so they can get their cases filed right away.

So, the moral of the story here is to try to exercise some forethought and not overdo it while you are out holiday shopping this season. I know it can be difficult, but remember that those credit card bills will come due in January!

-- Attorney Andrew Partridge


View the Sunday Paper article.


Predatory Credit Card Companies

October 31, 2006 - 03:13 by apartridge

I recently read an article in Time Magazine written by Daniel Kadlec about how Credit Card companies were becoming even more predatory in regards to milking their customers.  It’s not as if they weren’t doing well-enough already, right?

Here are some of the ways credit cards companies are trying to maximize their potential and all the while sticking it to the people who use their credit cards:

  1. Late Fees have been increased to an average penalty of $30, going as high as $39.  In the mid-90’s the average late fee penalty was closer to $15.
  2. Balance Transfer Fees of typically 3%. So if you transfer $5000 in credit card debt to another card, it’ll cost you $150.
  3. Minimum payments have increased across the board, doubled in some cases.
  4. Foreign Currency Conversion Fees of also typically 3% every time you use your card abroad.  (Take it from my personal experience that they also charge this for purchases in Canada!)
  5. Closing down an open account with a zero balance due to inactivity.  This hurts because every time a line of credit is closed your credit score negatively takes a hit.

So while we can complain all we want, we have no one to blame but ourselves.  The Credit Card companies disclose all these money-making schemes to us in the 20 page, microscopic font “CardHolder Agreements” that they send us with their credit cards. 

The only real solution if you don’t want to be taken advantage of by these predatory tactics is simply not to use the Credit Card companies’ products. 

Easier said than done, I know.

Here’s the link for that Time Magazine article if you’d like to check it out:,9171,1546352,00.html

-- Attorney Andrew Partridge


2005 Law Changes Haven't Affected Majority

October 17, 2006 - 03:15 by apartridge

Writer Jeanne Sahadi from recently wrote an article about how the 2005 law changes to the Bankruptcy Code have not affected bankruptcy filings as drastically as some experts initially predicted. Now one year since the new bankruptcy laws went into effect, this also seems to be the same concurrent opinion of many consumer bankruptcy attorneys from around the country. 

It’s true that many of us bankruptcy lawyers were fearful that the law changes would legally prevent a certain percentage of our population from filing bankruptcy and leave those people no opportunity to get a fresh start financially.   However, most of us attorneys have now found a year later that a large majority of our new clientele who would have qualified for bankruptcy relief under the old law without any hassle, also still qualify for bankruptcy relief under the new current law as well. 

The calendar year of 2005 saw a huge surge in bankruptcy filings nationwide as people rushed to get their cases filed before the law change went into effect.  This of course helps to explain why bankruptcy filings are significantly down nationally this year compared to last year or even 2004. Contributing to this decrease in filings has also been a widely spread rumor that bankruptcy was not available any longer and/or that our government did away with the bankruptcy law.  This of course is far from the truth and reminds one not to believe everything they hear.    

So while it may not be fair or accurate to compare the number of clients coming into our doors from last year (2005) to this year (2006), we as attorneys are still finding that a steady stream of people are still in need of some sort of financial assistance and that bankruptcy is still available to a vast majority of them. 

View the article.

-- Attorney Andrew Partridge


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