SPRINGFIELD, Mass. (Mass Appeal)  What should an individual know about tuition clawbacks when considering personal bankruptcy? Attorney John Davis from the Law Offices of Cooley Shrair in Springfield shared more.

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Personal bankruptcy is aimed at providing relief to debtors by wiping their fiscal slates clean and enabling them to start fresh. But increasingly, banks are refusing to honor bankruptcy discharges and holding tens of thousands of consumers hostage to debts that have been forgiven by the courts. This unfair practice penalizes consumers nationwide who are trying to repair their finances and hinders their ability to secure employment or find housing. It also undermines the authority of the courts. Banks should not be allowed to flout federal law and engage in this deceptive practice.

How to research a financial broker
If youre hiring a broker, do your homework, said Liz Moyer at The Wall Street Journal. Troubled brokers often cluster in communities with lots of elderly investors, but bad apples can be found anywhere. To check the background of a potential broker, investors can use the Financial Industry Regulatory Authority (FINRA)s BrokerCheck tool, which provides a brokers license status, history, and any black marks against him or her including regulatory proceedings, customer disputes, and settlements. Individual states also have their own regulatory bodies with online databases, which investors can use to check whether any additional investor complaints have been lodged.

Beware of zombie bills
When it comes to consumer debt, watch out for so-called zombies: bills that cannot be killed even by declaring personal bankruptcy, said Jessica Silver-Greenberg at The New York Times. Federal authorities say some of the nations biggest banks are ignoring bankruptcy court debt discharges and forcing borrowers to make payments on bills that they do not legally owe. The Justice Department is investigating banks, including JPMorgan Chase and Bank of America, for failing to update data for credit reports, a tactic that essentially compels borrowers to clear purged debts, since their still-tarnished credit reports prevent them from getting loans, houses, and even jobs. Banks have defended their practices in court, but the Justice Department could extract steep penalties if it determines that the institutions have violated bankruptcy law.

New rules for prepaid cards
Prepaid cards arent as safe as other plastic, but regulators hope to change that, said Kara Brandeisky at Time. The cards have become increasingly popular among consumers 12 percent of US households have used them, including more than 25 percent of people ages 25 to 34 in the last year but the Consumer Financial Protection Bureau believes many people dont realize how risky the cards can be. The regulator last week proposed new rules that would require prepaid cards to carry fraud and lost-card protections similar to those of credit cards, including limiting a users liability for fraudulent charges on a lost card to just $50. Prepaid card issuers would also be required to send statements about your balance, offer you opportunities to resolve errors like double charges, and disclose more information about fees.

Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after — sometimes as long as a decade after — federal judges have extinguished the bills in court.

The problem, state and federal officials suspect, is that some of the nations biggest banks ignore bankruptcy court discharges, which render the debts void. Paying no heed to the courts, the banks keep the debts alive on credit reports, essentially forcing borrowers to make payments on bills that they do not legally owe.

The practice — a subtle but powerful tactic that effectively holds the credit report hostage until borrowers pay — potentially breathes new life into the pools of bad debt that are bought by financial firms.

Now lawyers with the US Trustee Program, an arm of the Justice Department, are investigating JPMorgan Chase, Bank of America, Citigroup and Synchrony Financial, formerly known as GE Capital Retail Finance, suspecting the banks of violating federal bankruptcy law by ignoring the discharge injunction, say people briefed on the investigations who asked not to be identified by the New York Times.

The banks say that they comply with all federal laws in their collection and sale of debt.

Still, federal judges have started to raise alarms that some banks are threatening the foundations of bankruptcy.

Judge Robert D. Drain of the federal bankruptcy court in White Plains, NY, said in one opinion that debt buyers know that a bank will refuse to correct the credit report to reflect the obligors bankruptcy discharge, which means that the debtor will feel significant added pressure to obtain a clean report by paying the debt, according to court documents.

For the debt buyers and the banks, the people briefed on the investigations said, it is a mutually beneficial arrangement: The banks typically send along any payments that they receive from borrowers to the debt buyers, which, in turn, are more willing to buy portfolios of soured debts — including many that will wind up voided in bankruptcy — from the banks.

In bankruptcy, people undergo intense financial scrutiny — every bank account, bill and possession is assessed by the bankruptcy courts — to win the discharge injunction, which extinguishes certain debts and grants a fresh start. The heavy toll of personal bankruptcy, which can tarnish a credit report for a decade and put some loans out of reach, is worthless, bankruptcy judges say, if lenders ignore the discharge.

At the center of the investigation, the people briefed on it said, is the way banks report debts to credit reporting agencies. Once a borrower voids a debt in bankruptcy, creditors are required to update credit reports to reflect that the debt is no longer owed, removing any notation of past due or charged off.

But the banks routinely fail to do that, according to the people briefed on the investigation. The errors are not clerical mistakes, but debt-collection tactics, current and former bankruptcy judges suspect. The banks refuse to fix the mistakes, the borrowers say, unless they pay for the purged debts. And many borrowers end up paying, given that they have so much at stake — the tarnished credit reports showing they still owe a debt can cost them a new loan, housing or a job. The Vogts, a couple in Denver, for example, paid JPMorgan $2,582 on a debt that was discharged in bankruptcy because they needed a clean credit report to get a mortgage.

JPMorgan and the three other banks declined to comment for this report.

If the United States Trustees office determines the banks have violated bankruptcy law, say the people briefed on the investigations, they could audit the lenders and extract steep penalties.

The costs are more immediate for people like Bernadette Gatling, a 46-year-old hospital administrator whose credit report is still marred by Chase credit card debts that were voided in bankruptcy three years ago. Since being laid off in March, Gatling said she has lost one job opportunity after another because potential employers pull her credit report.

Its just so unfair, she said.

A circuit court judge will decide in the next couple of weeks whether one of the states wealthiest men owes more than $1.6 million to a Sioux Falls developer.

Judge Robin Houwman has been asked by developer Ted Thoms to enter a judgment against Tom Vucurevich. Thoms is seeking $1.6 million plus interest, attorney fees and other expenses related to an agreement that Vucurevich signed with Thoms in September of last year.

That agreement bought out Thoms claim in bankruptcy court against Kent Vucurevich, the son of Tom Vucurevich. Thoms was among the creditors who forced Kent Vucurevich into an involuntary bankruptcy filing in 2011 in what is the largest personal bankruptcy filing in state history with creditors claiming as much as $70 million.

The bankruptcy case, which is a separate action in federal court, is currently under appeal after the bankruptcy judge ruled against Kent Vucurevich by not discharging his debt.

Tom Vucurevich is the son of John Vucurevich, who built a banking empire and established a foundation in his name that has donated millions to charity. John Vucurevich, who was from Rapid City, died in 2005 at 92. Tom Vucurevich took over the family business.

Whats more, medical bills are the leading cause of personal bankruptcy and the problem is worsened because many businesses are hiring workers on a part-time basis to avoid paying health insurance.

Clearly, the cost of health care affects us all in many ways. Even though it may not make good political sense as Sen. Schumer believes, that is not a good reason to not give it top priority on the national agenda to improve the common good.

Health care was in serious need of reform 20 years ago and is more so now.

Edward Volpintesta, MD,Bethel

Two Escondido business partners must disclose key information about past transgressions when selling stock in their educational companies to investors, says an order released Monday by the California Department of Business Oversight.

The order says Gregory Writer and Edward Bracken, who partner in the operation of Club Tuki, BYOU (Be Your Own You), and Childrens Educational Network did not disclose previous bankruptcies, censures, and securities fraud that one or the other had committed since 1990 in Kansas and Texas.

You have to disclose all material information to investors so that they can make informed decisions and you cant get much more material than a record of violating securities laws and personal bankruptcy, said Tom Dresslar, spokesman for the department of business oversight.

In all, at least 40 investments have been made totaling $513,000. Of those, 13 investors have come from the Golden State.

Reached Tuesday, Bracken said his understanding was that disclosures were optional after 10 years, but that he and Writer have corrected the issue.

As it stands, the two have 30 days to respond to the order, or it will be final.

One of the most poignant features of student debt is that, short of paying it off, its pretty much impossible to get rid of. In 2005, the bankruptcy code was updated to make private loans non-dischargable in a personal bankruptcy, meaning that, unlike other private debts, student loans cant be forgiven or written off.*

Read the whole story at Daily Finance

By Matt Chiappardi

Law360, Wilmington (December 04, 2014, 8:03 PM ET) — The former WL Gore Associates Inc. scientist who is the subject of a rare Delaware Chancery Court arrest warrant in a case accusing him of misappropriating trade secrets surfaced in a filing Thursday in his personal bankruptcy, arguing that he is a victim of racial discrimination.

In a filing before the Delaware bankruptcy court opposing a motion for summary judgment that money owed WL Gore is not dischargeable, Huey Shen Wu said he cant properly defend himself because of the Chancery Court order that he…