By Massachusetts Bankruptcy Lawyer Kara O’Donnell

See my post below for more details . . .


by Attorney Kara O’Donnell
O’Donnell Law Offices

If you are under 21 and of limited income (i.e. most college students) you may only have a matter of days before you can obtain a credit card WITHOUT a co-signor.  See my recent blog post below for details of the CARD Act which goes into effect February 22, 2010.

Essentially, President Obama is on a mission to reduce the availability of credit cards to young consumers.  This is a direct response to the long-standing efforts of credit card companies to sign up jobless and naive college students.  The goal is to solve a problem that hurts so many college graduates – too much debt.

This is a summary of the “Youth and Credit” provisions of the Act:

  1.  Less Access to Credit Cards Before the Age of 21
    The CARD Act’s most significant rule is restricting the availability of credit cards to young adults thus preventing reckless spending.
  2. Credit cards will not be issued to anyone under the age of 21 UNLESS:
    (i) they have an adult (of at least 21 years of age) to co-sign the credit card agreement (this adult would, presumably have to have good established credit),  OR
    (ii) they provide proof that they are able repay the debt they incur (This most likely excludes the part-time workers).
  3. Pre-screened credit card offers cannot be available to consumers under the age of 21. 
  4. Joint credit card accounts can only have their limits increased with the permission of the adult accountholder.

An End to Visa Kiosks on College Campuses?
Kiosks offering free stuff in exchange for completed credit card applications (by poor jobless college students, of course) will probably cease to exist on  college campuses.  (NOTE: The Visa kiosks offering free blankets at Fenway to cold late-season Red Sox fans are sure to continue . . .)

Promotion for Financial Literacy
The CARD Act also proposes educating the young about the responsible use of credit.  While the plan is still in its formative stages, it will be interesting to see what becomes of it.  Will grade schoolers be forced to take classes in  math, reading, science, geography and Amex  vs. Visa?  Time will tell.

Kara O’Donnell, Esq. is a bankruptcy attorney in Quincy, MA. Call 857-526-1355 for help with your bankruptcy filing.

Kara O’Donnell, Esq.
Quincy, Massachusetts

Posted by Kara O’Donnell

By Boston Bankruptcy Attorney Kara O’Donnell, Esq.

In 2009, the Obama administration realized that unless the credit card companies were somehow reeled in, consumers would continue to be taken advantage of and, possibly, never get out of debt.  The result?  The Credit Card Accountability Responsibility and Disclosure Act of 2009  (also known as the CARD Act.)

Effective February 22, 2010:

  • Credit card issuers will not be able to increase interest rates on existing credit card balances unless the borrower is at least 60 days late on the account. This will eliminate the retroactive rate increases and the universal default clause where credit card issuers would periodically review an account holder’s current credit standing to determine changes in terms and annual percentage rates.
  • Credit card issuers will have to provide clear disclosure of account terms before a borrower opens an account. If the account provides a promotional interest rate period, the promotional interest rate will have to last a minimum of six months.
  • Credit card issuers will not be able to raise interest rates on new credit card accounts during the first year the account is opened. This rule will not apply if the borrower falls 60 days late on a credit card payment.
  • Credit card issuers will not be able to charge over-limit fees unless they obtain the account holder’s consent to accept and process over-limit transactions beforehand. If consent is obtained, the card issuer will not be able to charge more than one over-limit fee per billing cycle. Additionally, credit card issuers will not be able to charge an over-limit fee if interest charges or other fees are the sole reason for pushing the account holder over their limit.
  • Credit card issuers will not be able to charge additional payment penalties for accepting payments by mail, phone, electronic transfer, or any other means, unless the payment is processed through an expedited service processor.
  • Credit card issuers will face significant hurdles if they try to issue credit cards to consumers under age 21 without an “of-age” co-signer, unless they meet sufficient income requirements to independently repay the debt.
  • If a due date falls on a weekend or holiday, the credit card issuer will not be able to penalize mailed payments that are received on the next business day. Payments received by 5 p.m. must be credited the same day.
  • Double-cycle billing, a process where credit card issuers use the previous month’s balance to calculate interest charges for the current month, becomes illegal.
  • Credit card issuers will be required to apply any payment above the minimum amount due to the highest interest balance first.
  • Subprime or “fee harvester” credit cards will have fee limits. Fees on a credit card (other than late fees, over-limit fees, or insufficient funds charges) will not be able to exceed more than 25 percent of the credit limit when the account is opened.
  • Credit card issuers will have to include a minimum payment disclosure that explains how long it will take to pay off the existing balance and the total cost in interest fees if the cardholder paid only the minimum amount due. Additionally, card issuers will have to provide minimum payment details and the total cost in interest to pay off the existing balance within 3 years (36 months).
  • Card issuers will have to make account terms and cardholder agreements available to their cardholders on the Internet.


The days of the credit card companies being in TOTAL control are GONE.  However, don’t be fooled.  If you are a person who charges frequently and only pays minimum monthly payments, the only difference is that the number of years/DECADES it will take to pay off your debt will be indicated right on your bill.  Under 21 card applicants will need a co-signer.  (Gone are the days of on-campus credit card kiosks where they solicited to student WITHOUT JOBS.)  Also, you will not be charged more than one over-the limit fee per month, and this seems to only be allowed on purchases you made and not because your account went over the limit last month due to interest or other fees.

Sure, the consumer receives additional protection from the CARD Act. However, if you are one of the many “only pay the minimum every month” or you are charging necessities every month (groceries, utilities, cash advances) then NOW is the time to take a second look at your overall financial health. 

If you are a person who sees no way out of your credit card problems, a Chapter 7 bankruptcy might be right for you.  Call Massachusetts Bankruptcy Attorney Kara O’Donnell for a free consultation at (857)526-1355.

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES                    (857)526-1355
Quincy, Massachusetts

Posted by Kara O’Donnell

By Bankruptcy Attorney Kara O’Donnell

Quite often by the time a client comes to me to file bankruptcy he has already had months of being unable to meet the credit card minimum payments and is desperately in need of help.  However, many of these clients have used up assets to make these minimum payments even though a) those assets WOULD HAVE BEEN PROTECTED in a bankruptcy, and b) continuing to make minimum-only payments will get you nowhere in the long run.

There are some classes of assets that receive automatic protection in a Chapter 7 bankruptcy:  Retirement accounts, monies obtained from personal injury settlements, monies received from workers’ compensation accidents, alimony, child support, some life insurance policies, and veterans’ benefits.  In short, NONE of these types of funds should be depleted in efforts to make credit card payments.  WHY?  Because if you can’t afford the payments this month what makes you think you will be able to afford them in the near future?  And, once those assets are gone, you will have no emergency funds to continue making the minimum payments.  The end result will be that you will end up filing for bankruptcy anyway AND your emergency funds will be gone.  Not the best outcome.

A better outcome?  If you are having trouble meeting your credit card minimum payments consult with a bankruptcy attorney TODAY.  Most attorneys, including myself, offer a free consultation for bankruptcy clients and, by doing so, you can create a financial plan for your future which involves both 1) the fresh start that bankruptcy provides and 2) still keeping your retirement accounts or other protected funds outlined above.

The key to your bankruptcy filing? Filing sooner and not later.

Kara O’Donnell, Esq.
Quincy, Massachusetts

Posted by Kara O’Donnell

By Bankruptcy Attorney Kara O’Donnell, Quincy MA  Call 857-526-1355 to answer YOUR bankruptcy questions in MA.


Just this week I was the victim of an online hacking to my personal checking account, linked to a Paypal account.  However, the resultant Insufficient Funds (NSF) fees reminded me of a documentary I had watched which investigated how the banks made money, expecially by offering so many “free” “no-fee” accounts.   The answer, in part?  NSF FEES.

When a person has several charges within a few days’ period the banks will actually process the LARGER ones first then the smaller ones after that, regardless of timing.  They do this to maximize their overdraft fee charges.   And, in fact, they have a SOFTWARE designed to do just that.

TRUE STORY!  On Jan 31, 2010, I bought my Chihuahua, Taz, a dietary supplement online at Ebay, paid through Paypal, for a cost of $17.33. I had the money in the bank. It would have no trouble clearing.

On Feb 1, ALSO through Ebay and Paypal, a hacker goes online and buys 2 $500 gift certificates with my account. Now CURIOUSLY, not only did the $500 charges bounce but also the $17 one which was the day BEFORE the fraud charges.  How does THAT happen?

In a documentary I recently watched (PBS maybe) a bank president admitted that they hold  multiple charges (in a few days period) then process the LARGE ones first.  The interviewer asked, “but doesn’t that result in more NSF fees to the consumer if they then get hit for  NSF fees for their $3 Starbucks charge, $2 bagel etc?”  The bank president then stated that the bank viewed it that, “We thought the consumer would appreciate their large charges, like rent or auto payments, being processed first.”

Geez, thanks alot, Rich Bank Guy.

So, that explains it. On Day 1 you make 3 small charges.  On Day 2 you charge coffee then lunch then breakfast.  On Day 3 you pay your car or rent online.  You know you’re $50 short but figure, “Oh well. I’ll get one NSF fee.  At least my payment won’t be late.”   Then you check your account a day or two later and discover SIX insufficient funds fess – all at $35 each”  Now you are not just $35 in the hole BUT $210 in the hole.

In a USA TODAY article, it reported that in 2009, Bank of America settled a class action lawsuit over their overdraft fees.  They also had the software to calculate how to generate the most overdraft fees when a customer went negative on his or her account. 

But have the banks stopped this practice?  Obviously not.  Look at a screenshot of my Sovereign Bank account charges below.  My EARLIEST charge for the dog medicine was processed LAST even thought it was purchased the day before the hacker hit!


BALANCE 818.96 NEGATIVE.   The earliest fees area at the bottom

02/02/2010  INSUFFICIENT FUNDS  FEE       $35.00-
 02/02/2010  PAYPAL INST XFER 100201 5JFJ243L       $17.33-
 02/02/2010  INSUFFICIENT FUNDS FEE       $35.00-
 02/02/2010  PAYPAL INST XFER 100201 5JFJ243M9E       $500.00-
 02/02/2010  INSUFFICIENT FUNDS FEE       $35.00-
 02/02/2010  PAYPAL INST XFER  100201 5JFJ243M9      $500.00-
02/01/2010  CHK CARD PUR 83xxxx HOMESTEAD.COM   CA       $4.99-

The good news? NSF fees are dischargeable in a Bankruptcy. Of course, only a small fraction of people affected by this will actually end up filing for bankrupcty. Most will be forced to just take their lumps and walk away.

(On a side note: The banks allow you to withdraw money you don’t have, they call it overdraft protection and they make their NSF fees on it. Interestingly, most banks will NOT allow you to turn off this “protection.” Trust me, I’ve tried.)

Kara O’Donnell, Esq.
Quincy, Massachusetts

Posted by Kara O’Donnell

by Bankruptcy Attorney Kara O’Donnell of Quincy, MA   

When a new client calls me or comes into my office for a consultation we go over a standard list of issues. However, no two cases are ever the same!   

A standard question is “What is your household size?” Seemingly easy to answer, what if you were living with your spouse and kids but in your parents’ house? What if you were living with a wealthy friend, someone who was just helping you out with a cheap/free place to live but who did not pay your bills or otherwise give you money?   

One, two, three, four . . .


The issues have become complicated considering that there are so many more living arrangements than the traditional family. Non-traditional living arrangements can include extended families, domestic partnerships, roommates, nannies, etc. When these situations arise, your bankruptcy attorney now must determine who to count.   

Some cases are more clear cut than others. Your family (you, your spouse & 2 kids) live with your parents in an in-law apartment in your parents’s house? The separate households seems just that, and you would easily be able to claim a household of FOUR on the Means Test. However, for more grey areas, such as two families sharing a house, there are no clear cut answers. The information you should be prepared to give your attorney should include: who pays the bills, is there a family relationship to the other parties, do any parties pay rent or utilities?   

Why do we bankruptcy attorneys care so much about your household size? Because it is a determining factor in the Means Test. The basic purpose of the Means Test is to determine whether a debtor is eligible to file a Chapter 7 petition based on a rather complicated calculation of the debtor’s income and expenses. If you don’t pass it, you may not be allowed to file Chapter 7 and must then consider filing for Chapter 13 (the repayment plan.) Thus, the lower the final figure on the means test, the better. Generally, the more individuals who live in the household, the easier it is for the debtor to qualify for Chapter 7. This is because the Household Size is compared to the State median income for a household of the same size.   

The Means Test is not only based on “household size” but also “household income.” Household income and the number of individuals in the household are central issues in the means test. But, interestingly, “household” is not a term defined in the Bankruptcy Code.   

Which leaves us . . . WHERE?
One bankruptcy attorney I know of uses a general rule of “whoever sleeps in the house more then 3 nights a week or is financially dependent on someone else in the house should be seriously considered as a member of the household for the means test as well as schedules of income and expense.” While this seems like it could provide answers to many, if not most clients, remember, every case is different from the last! You must provide your bankruptcy attorney with as much information as possible so that he/she can provide you with the best legal advice for your own situation.   

Kara O’Donnell, Esq.
O’DONNELL LAW OFFICES                    (857)526-1355
Quincy, Massachusetts   


Posted by Kara O’Donnell

Bankruptcy Lawyer Boston

January 28, 2010

Kara O’Donnell, Esq.
Quincy, Massachusetts

Posted by Kara O’Donnell
Posted by Kara O’Donnell
Filed in Bankruptcy, Financial, Law, Legal, bankruptcy massachusetts ·Tags: Ch. 13, Ch. 7, Chapter 13, Chapter 7, Chapter 7 Bankruptcy Boston Bankuptcy Attorney - go to

MA Bankruptcy Filings: Have we finally reached the peak?
Email[Edit] | Written by karalawyer on Jan-24-10 2:00pm

by Attorney Kara O’Donnell
O’Donnell Law Offices 

According to recent data released by The Warren Group, personal bankruptcy filings in Massachusetts dramatically increased in 2009 and were up a whopping 33% over the numbers for 2008. 

While 2008 resulted in 12,034 filings, the number for 2009 was 16,033 – and this is just the number for Chapter 7 filings! 

See the MA Bankruptcy Filings chart here: ma bankruptcy filings chart  

Chapter 7 bankruptcy (known as the “full discharge” bakruptcy”) remains the most common option for individuals (both in MA and nationwide) and accounted for 81 percent of all filings in the state in 2009. 

While it is common knowledge that a bad economy almost certainly results in increased bankruptcy filings, there existed additional factors to push the expected increase even higher. The combination of unusually high unemployment rates coupled with plummeting home equity sounded the death knell for most “paycheck to paycheck” families. Gone were the days of home equity loans and 401k advances to pay the bills and get by, if not for just one more month. And just when you thought things couldn’t get much worse, credit card rates skyrocketed. Some debtors’ credit card accounts were closed by the credit card companies and some had their credit limits decreased – both bad signs of a credit card company’s financial well-being. 

Creditcards rates up, limits down!

Creditcards rates up, limits down!


Just as in the real estate market, it is difficult, if not impossible, to guess just where the upward trend will finally peak. Some experts believe that high numbers of bankruptcy filings follow the point at which the economy is at its worst. Others say that with increased filings more debtors are pulled away from the precipice of total financial collapse. One can only hope that some relief for overburdened debtors is on its way in 2010. 
Kara O’Donnell, Esq.
Quincy, Massachusetts 

Posted by Kara O’Donnell
Posted in Bankruptcy, bankruptcy massachusetts, Financial, Law, Legal Tagged: Ch. 13, Ch. 7, Chapter 13, Chapter 7, Chapter 7 Bankruptcy 

by Attorney Kara O’Donnell
O’Donnell Law Offices

A new year brings more changes to the face of bankruptcy in the Boston Bankruptcy Court. 341 Creditor Meetings are now being held at the Post Office Square location in the heart of the Financial District.

As for substantive changes to the bankruptcy law . . . there has been ongoing debate in Washington about a proposed pro-consumer amendment to the Wall Street Reform and Consumer Protection Act.

This Act would change the law and allow bankruptcy judges, in certain cases, the flexibility to not only reduce mortgage interest payments but also the actual principal of the loan. (They already can do this for second vacation-type homes, a loophole benefitting the well-to-do.) Under current law bankruptcy judges may not alter the principal amount due on primary mortgages.

In fact many economists believe that the only real way to slow the number of foreclosures is to allow such a law to be put into place.
But the 2,400 member strong Mortgage Bankers Association is dead set against it and is arguing that the proposed cram-down legislation “will encourage more homeowners to opt for bankruptcy, and it will inject new risk into the mortgage market, thus making it more difficult for borrowers to buy, sell, or refinance a home.” Sound like a bunch of malarkey to you?

Keep an eye on the news for developments. If there’s anything that cash-strapped homeowners could use in 2010, it would be just a little more help from Washington.

Kara O’Donnell, Esq. is a bankruptcy attorney in Quincy, MA. Call 857-526-1355 for help with your bankruptcy filing.

Kara O’Donnell, Esq.
Quincy, Massachusetts

Posted by Kara O’Donnell

by Attorney Kara O’Donnell, O’DONNELL LAW OFFICES

In this age of housing prices being LOWER than the mortgage balance, it isn’t too often that I get a bankruptcy client who has alot of equity in their house.

For those who have already done basic research on Chapter 7 bankruptcy, you will already know that Federal exemptions allow you to keep a little over $20,200 of equity in your home. As this exemption is per individual, the amount of equity that can be protected per couple is just over $40,400.

What happens if an individual has more than $20,200 in equity in their home, is he out of luck?
Not at all! In such a case, the individual could use the Massachusetts state exemptions as opposed to the Federal exemptions.
The MA state exemptions protect property that the debtor occupies or intends to occupy, including mobile home up to $500,000. (MGL 188-1) There are special provisions for owners over 62 or disabled, but the same total exemption. (MGL 188-1A)

The only catch is . . .
The Debtor must record a homestead declaration before filing for bankruptcy in order to take a MA homestead exemption (unless the title to the property already contains a statement of homestead). (MGL 188-2)

How do I know if I have a homestead declaration on my house?
Easy. Just call or visit the website of your county’s Register of Deeds. They can tell you if you have one already filed and how to file one if you don’t.

If you are a MA resident and considering filing for bankrupcty, call Attorney Kara O’Donnell at (857)526-1355 for a free consultation.


By Attorney Kara O’Donnell, Quincy, Massachusetts

When discussing bankruptcy issues in general with people, they are often surprised that it IS possible to dischargeable some tax debts.

Key word? “SOME . . . ”

Income taxes are not dischargeable unless a three-part test is met.
Irs guy
1. The tax return must have been due at least three years before the bankruptcy was filed

2. The return must have been filed at least two years before filing for bankruptcy, and

3. The taxes must have been assessed for at least 240 days.

NOTE: Trust fund taxes (taxes withheld by an employer from employee wages and sales taxes) are not dischargeable.

If you are a Massachusetts resident with questions about your IRS or other debt, please contact me at (857) 526-1355 or for a free, initial consultation. Together, we will determine whether or not a Chapter 7 bankruptcy is the best way to eliminate your debt.

Kara O’Donnell, Esq.
Quincy, Massachusetts