Poverty, not SNAP, is the problem

By Scott Young, Lincoln Journal Star. June 13, 2017

In a column in the Lincoln Journal Star (“‘Gotcha’ mentality stiles needed dialogue,” June 3), Third District Rep. Adrian Smith wrote of his valid concerns about the culture in which we ind ourselves; “The ‘gotcha’ mentality rampant in politics divides us and prevents the real substantive conversations we so desperately need.” His column is primarily a result of a recent NPR interview regarding President Donald Trump’s budget proposal, in which Rep. Smith was asked repeatedly if Americans are “entitled to eat.” His refusal to provide the interviewer a yes-or-no answer resulted in a landslide of harsh, social-media-fueled criticism. President Trump’s budget would cut the food stamp program by approximately
25 percent over the next 10 years.

At the Food Bank of Lincoln, we believe one of the “substantive conversations” we so desperately need should be centered on why so many hard-working Nebraskans do not have the resources to live the Good Life. The headline in a May 26 op-ed piece in the New York Times deines a worthy conversation: “The Problem Isn’t Food Stamps, It’s Poverty.”

The number of people on food stamps is not the problem. Our collective challenge is that too many people need food stamps.

The editorial board of the Times opines: “Food stamps, oicially the Supplemental Nutrition Assistance Program, keep millions of people from falling into poverty each year and prevent millions of poor people, many disabled or elderly, from falling deeper into poverty. They also improve the future prospects of poor children by fostering better health and graduation rates.”

Improving prospects for under-resourced kids is a principle upon which most, but not all of us, can agree. In general, “gotcha mentality” is scarce when it comes to helping kids.

The Times op-ed piece also suggests correctly the SNAP program is good for the farm economy: “Into the bargain, food stamps support the farm economy and the broader economy by creating a bigger market for food and supplying cash that is quickly
spent.”

According to the Center of Budget and Policy, SNAP participants in Nebraska include thousands of families with children. In our state, more than 74 percent of SNAP participants are families with children, which is higher than the national average of 68 percent.

In Nebraska, 29 percent of households participating in SNAP are families with members who are elderly or disabled. Many SNAP participants are hard-working Nebraskans. Slightly less than 50 percent of participating SNAP households have someone in the home who is employed.

Given these startling statistics, we suggest the right substantive conversation should not be “How do we get more people of food assistance programs?” but rather “How do we work together to have fewer people who need food assistance programs?”

Rep. Smith writes; “My goal in Congress remains being a solution-oriented representative who listens and looks for common ground.” Common ground abounds when it comes to ensuring all Nebraskans have enough to eat.

We urge Rep. Smith and all of our elected representatives to work hard to support nonpartisan food programs like Nebraska’s creditable, highly efficient food stamp program that helps tens of thousands of Nebraskans have a better shot at the Good Life.

Scott Young has been executive
director of the Food Bank of Lincoln
since 2001.

Why Debt Settlement Doesn’t Work

Many people I speak with have tried debt settlement, only to find themselves being garnished by one of their creditors because that particular creditor decided it wanted more money than what it was receiving through the settlement. The core problem with debt settlement is that one’s creditors do not bind themselves to any sort of arrangement. So, a person who is going through debt settlement is still at risk of garnishment and property loss. Bankruptcy is the opposite: it precludes any actions against your wages or property. In addition, many times, debt settlement costs more than a bankruptcy and its effects on credit is similar or worse than bankruptcy. Other issues include:

1. Debt settlement programs last about four or five years.

2. Even if a significant portion of your debt is settled, the rest will likely grow larger, leaving you with more debt than you had to begin with.

3. While debt settlement may seem like a good way to get out of debt, ruined credit, lawsuits, tax liability, and continued growth of debt are all factors that can leave debt settlement customers worse off than they were before.

Some Client Reviews:

John A. Lentz-Client Reviews

Questions Answered

Avvo Rated

New Office Location

The law office would like to announce the opening of its newest office location:  2111 South 67th Street, STE 300, Omaha, NE 68106.  It is located at Aksarben Village, which is near 72nd and West Center Road across from Baxter Arena.  This new location will be very convenient for clients.60a448308907f9fb33ba600b9f94b3d2_f341

Disclose, Disclose, Disclose

It is very important that information regarding a Debtor’s assets, liabilities, income and personal information be disclosed in its entirety and accurately on bankruptcy schedules. Why? because of instances such as the current fraud investigation into GM’s faulty ignition switches-something that affects potential future liabilities during the pendency of the bankruptcy case, found here

In certain cases, Debtors are hesitant to disclose the nature of assets, particularly if they are not titled, or otherwise disclosed in other documents for fear that the trustee in bankruptcy will either claim such assets or otherwise penalize the Debtor for having assets worth more than can be exempted. Failing to disclose can carry serious penalties, criminal fraud as well as dismissal of the case being the most feared. So, it is best to disclose all current and potential legal and equitable interests in property. Otherwise, having financial difficulties could be only a minor problem in comparison to a criminal fraud charge.

Bankruptcy Myths

So, it has been quite a while since any posts have been made here, but things have been busy. We’ve had a few calls lately referring to various myths about bankruptcy, so we thought it would be a good opportunity to discuss those. We already have a page dedicated to “Bankruptcy Misconceptions” here.

The following are a few common myths about bankruptcy that we would like to dispel:

1. “All my debt is medical debt, so I should file for medical bankruptcy.”
There is no such animal as “medical bankruptcy” although historically, medical debt seems to push people into bankruptcy. For example, see here and here.

2. “People who file bankruptcy are irresponsible/deadbeats/etc.”
Although the thought of filing bankruptcy, or knowing someone has filed bankruptcy may be like the cacophony of nails being drug across a chalkboard, just because someone has or is going to file bankruptcy does not mean they are irresponsible. No one wants to file bankruptcy; typically a person is faced with having to cover household expenses and providing for their family while being garnished for a bill they could not cover, or they are laid off of work, etc. Typically, a person does not choose to be in bankruptcy, they eventually find themselves in a situation that presents no reasonable alternative. Does a typical client have some debts such as credit card and debts for luxury items? Sometimes, but much of the time, those debts were incurred when it was a serviceable debt and the person was not insolvent. Many times people are financially secure until someone loses a job, or suffers a major setback due to medical problems, or a family tragedy. Sometimes life happens, and much of the time, life presents situations that are neither foreseeable, nor easily overcome.

3. “If you are going to file bankruptcy, you might as well max out your credit cards.”
Courts routinely consider such spending on the eve of filing bankruptcy as fraudulent. One of the bases for preventing a discharge of a debt is fraud.

4. “Bankruptcy ruins your credit.”
Although filing bankruptcy certainly isn’t going to help your credit in the short-term, a bankruptcy discharge will actually increase a person’s income to debt ratio to a more favorable factor. Lenders assess every loan transaction according to the risk of nonpayment. One of the factors a lender will assess is if a person has enough income to service his/her existing debts and the new loan. Since bankruptcy will discharge a majority of debt, a person coming out of bankruptcy, assuming he/she has steady income, is actually less of a risk than prior to filing bankruptcy.

5. “All debt is discharged in bankruptcy.”
Not all debt is discharged in bankruptcy. Certain priority, governmental, retributive and secured debt is not discharged. In addition, debts due to fraud or embezzlement are likewise not discharged under certain circumstances.

6. “Chapter 13 bankruptcy means I will be paying all my creditors back.”
Not necessarily. What must be paid in a chapter 13 is a calculation relating to income, assets not exempt, and other factors. Hence, it is important to hire a knowledgeable, experienced bankruptcy attorney to make sure you are getting as much as you can in your bankruptcy and to ensure you have someone to guide you through the process.

Violation of the Discharge in Bankruptcy

The discharge in bankruptcy means that the debts arising prior to the filing of bankruptcy are forever forgiven. There are some exceptions to discharge (e.g. reaffirmed debts, certain tax debts, certain domestic support obligations, etc.). The discharge order by a bankruptcy court prevents a creditor from attempting to collect on a pre-petition debt. Creditors are not only barred from collecting on a discharged debt, they are also barred from attempting to collect on a discharged debt.

Sometimes, however, creditors don’t listen. This happens either when a creditor deliberately ignores the discharge order, or in the typical case of larger entities, a creditor may not have followed the correct procedures in halting collection actions. When a creditor insists on violating the discharge injunction, you can file a motion for sanctions with the bankruptcy court. The bankruptcy court judge may sanction the creditor by ordering it to pay for your attorney fees as well as punitive damages.

One instance can be found in the following case involving Bank of America:http://blogs.wsj.com/bankruptcy/2013/10/04/bankruptcy-judge-sends-a-message-to-bank-of-america/

Are Student Loans Creating a Hardship?

Many people assume that student  loan debt is not dischargeable in bankruptcy.  Although this is true in many people’s bankruptcy cases, there are situations in which student loan debt may be discharged.  The Bankruptcy Code specifically states that unless excepting student loan debt which was made, insured, or guaranteed by a governmental unit or made under any program funded in whole or in part by a governmental unit or nonprofit organization imposes an undue hardship on you, then the debt can not be discharged in your bankruptcy.

In plain language, the Bankruptcy Code states that if you are in a financial situation and your current situation is not expected to change such that not discharging your student loan debt would render an undue hardship on you, then your student loan debt may be discharged.  The factors some courts use in determining whether or not your student loans may be discharged are the following:

1.  Have you made every effort to obtain employment?

2.  Have your efforts to obtain employment been met with negative results, or does your employment provide you with insufficient income to meet your current basic living expenses plus repayment of your student loan?

3.  Have you attempted to reduce your expenses to a bare minimum standard of living?

4.  Have you tried to negotiate a repayment plan you can manage?

5.  Have you made payments on your student loan whenever possible?

6.  Have you tried to restructure the loan?

7.  Can you maintain a minimal standard of living if the student loan is not discharged?

8.  Is your current financial and employment situation likely to continue for a significant portion of the repayment period?

These are some factors courts use to determine whether your student loan debt may be dischargeable.  To put it simply, have you tried paying your student loans, but have failed, even despite modifications, because you are not able to obtain employment and you will likely not obtain suitable employment to cover a minimum standard of living while repaying your student loans?  If the answer is yes, then it is possible you may be able to discharge your student loans.