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Terminate Cell Phone Penalties in Bankruptcy

By Cathy Moran

smartphone-150753_1280I’m accustomed to advising those on the verge of filing bankruptcy about big ticket debts like mortgages, student loans, and back taxes.

I was surprised when a client, resigned to letting her house go to foreclosure after the bankruptcy, was absolutely delighted to know that she could free herself from her unhappy relationship with Verizon Wireless at the same time.

She had a two year contract with fees and charges for early termination.

Bankruptcy terminates executory contracts in force when the case is filed.

So the balance of the two year contract with the unsatisfactory provider could be terminated, and the early cancellation penalty treated just like any other unsecured creditor.

The same legal principle applies to cable or other TV subscriptions.  Or a too-expensive business lease.

Get out from under pricey services you don’t need or don’t like, without penalty.

I’m adding to my list of things to do before you file, like change banks and cancel automatic payments from your checking account,  ? consider dumping your cell phone provider.

More about bankruptcy planning

Paying off family members

Reducing the number of creditors

Maximizing exemptions

File with your spouse or not

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Filed Under: How bankruptcy works, True Stories

About Cathy Moran

I'm a veteran bankruptcy lawyer and consumer advocate in California's Silicon Valley. I write, teach, and speak in the hopes of expanding understanding of how bankruptcy can make life better in a family's future.

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About The Soapbox

You've arrived at the Bankruptcy Soapbox, a resource of bankruptcy information and consumer law.

Soapbox is a companion site to Bankruptcy in Brief, where I try to be largely explanatory and even handed (Note I said "try").

Here, I allow myself to tell stories and express strong opinions on how I think law should work for the consumer and small businesses when it comes to debt.

Moran Law Group
Bankruptcy specialists for individuals and small businesses in the San Francisco Bay Area

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