4 years 9 months ago

Today-In-Bankruptcy (1)Bringing you the most up-to-date news, tips and blogs throughout the web. Here’s your Bankruptcy Update for March 18th, 2014 Quiznos follows Sbarro to bankruptcy Ahead of bankruptcy hearing, LightSquared seeks finding against Ergen They’re out: Dodgers are dismissed from bankruptcy court

4 years 9 months ago

04576-responder-test-laboralesWhen you file bankruptcy you will take what is called the Means Test. The test helps debtors learn if they qualify to file Chapter 7 bankruptcy. It reviews the financial background of the debtor to understand monthly expenses and income availability. The test reviews whether disposable income is available and whether it can be placed […]

4 years 9 months ago

David Siegel: Hello, welcome.  My name is David Siegel.  Thanks for joining me.  Today were going to be talking about Chapter 7 bankruptcy.  Once again, my co-host as always is Jesse Barrientes.  Jesse, welcome to the show. Jesse Barrientes: Thank you, Dave. David Siegel: How are you doing today? Jesse Barrientes: Excellent, how about yourself? David Siegel: I’m doing+ Read MoreThe post What Is Chapter 7 Bankruptcy In A Nut Shell? appeared first on David M. Siegel.

4 years 8 months ago

Chapter 7 bankruptcy can be confusing for many people.  There are different scenarios where Chapter 7 comes into play to change lives.  In the latest Legal Action show, we discuss the basics of Chapter 7 and how it can be used.  A partial transcription of the show is listed below.  You can also view the+ Read MoreThe post What Is Chapter 7 Bankruptcy In A Nut Shell? appeared first on David M. Siegel.

4 years 9 months ago

When Can I Refile for Chapter 7 Bankruptcy?
A common question we hear is, “I have filed for bankruptcy before. When can I refile a chapter 7 bankruptcy case?”.  The answer to this question -- for Fresno and the rest of California -- is the following:

11 USC Code section 727(a)(8) prohibits a debtor from filing repeated cases under Chapter 7 within eight (8) years of one another.

An example would be if a debtor filed for bankruptcy on April 1, 2006, the next time they can seek Chapter 7 protection is after April 1, 2014.

If 8 Years Has Not Elapsed, What Can I Do?
Other options exist than Chapter 7.  One option is to choose Chapter 13 instead of Chapter 7. Chapter 13 can be filed within 24 months, which is 2 years, of a prior bankruptcy discharge. Since the creditors tend to be paid more in Chapter 13 bankruptcies, it is better for creditors to see a Chapter 13. Chapter 13 is often referred to as a “debt repayment bankruptcy.” The debtor allows his income over a period 36 to 60 months to be used to repay the debts.

A second option is to wait for the eighth anniversary date to file for Chapter 7. If your anniversary date for the last filing is fast approaching, we would generally encourage you to seriously consider this option. It is important to remember that garnishments and asset seizures cannot be stopped without a bankruptcy filing. Still you have some protections.

If you cannot make a decision based on this limited overview, please feel free to meet with me to to get more precise advice for your needs.

4 years 9 months ago

debtA levy is an order issued by the court to a bank or other third party to turn over funds or assets belonging to you to New York State to pay a tax obligation. Before a tax levy can be issued, a tax warrant must be filed.
What is a Tax Warrant?
A tax warrant is simply a legal action that creates a lien against personal or real property. Warrants are filed by the taxing authority with the local clerk’s office and the New York State Department of State. It also becomes a public record and likely will appear on your credit report. The warrant gives the tax department the right to collect the debt by a levy, income garnishment and by seizing and selling your property.
If a warrant is filed, it will make create obstacles if you want to sell your property or try to obtain a loan.
Exemption Funds
Not all of your funds are subject to seizure. The following may not be the subject of a tax levy:

  • Child support
  • Spousal maintenance
  • Public assistance
  • Benefits from workers’ compensation or disability
  • Unemployment compensation
  • Social Security and supplemental security income

If you filed jointly and your spouse is responsible for the tax debt, however, your spouse can also be ordered to pay with a levy from nonexempt funds.
What an Attorney Can Do
If you are notified that a tax levy has been issued against you, promptly contact a tax attorney to discuss your rights and your legal options. A tax attorney can advise you on several options:
Innocent Spouse Relief
If your spouse is solely responsible for the tax obligation, your attorney can help you file a Request for Innocent Spouse Relief, Equitable Relief and Separation of Liability if the debt was incurred after January 1, 1999. Partial relief is also possible. This situation generally arises where you are divorced or separated.  You do have to show that you were unaware of the under-reported income or error in the joint return when filed.

  • Separation of Liability Relief

In this type of relief, the tax liability is divided between you and your spouse based on your respective responsibility. You must have filed a joint return and been separated or divorced 12 months or more before filing for relief, were widowed or not a member of the same household for the same 12-month period.
Equitable Relief
If the first two avenues of relief are denied, you can still get equitable relief if you can present special circumstances indicating why you should not be held responsible for your spouse’s or ex-spouse’s tax debt.
Other Relief
You can also request either an installment payment agreement or an offer in compromise for financially strapped debtors. An offer in compromise permits you to settle your tax debt for less than what you owe. You will need to submit an initial payment of 20% of the offer amount when you apply. If accepted, you will have to pay the balance in no more than 5 payments; otherwise you should continue to make a payment until you hear back. Have your attorney discuss with you if this is a viable option and if so, to negotiate it for you.
Otherwise, your attorney can discuss the possibility of filing a Chapter 13 bankruptcy, which is a reorganization of your debts and stops any collection activity.

4 years 9 months ago

Tax DebtFew things are worse to think about than your tax debt. You knew that when you filed, or did not file, that taxes would be owed, or you were surprised to get a notice advising you of an underpayment and that penalties and interest are accumulating. In these situations, there are some things you can do.
Settle by Phone and Mail
First, do not procrastinate because more notices will follow and it could lead to a tax lien. One step is to call the New York Tax Department phone number on your notice and talk to the auditor or adjuster assigned to your case. You should have documentation showing that the underpayment is a mistake, if it is in error. You will likely have to write a letter explaining the discrepancy or error and include any supporting records.
You can ask the person about what procedures for protesting a tax assessment and the type of documentation required such as bank records or a cancelled check.
If the assessment is correct, make at least a partial payment with your letter or make a promise to pay.
Installment Payments
The IRS is generally amenable to having you make installment payments to pay off your tax debt over time. It prevents the IRS from liquidating your major assets such as your home or a retirement account. This option might be best if you are not currently able to pay the obligation.
There are specific IRS income and expense standards to determine an acceptable minimum monthly installment payment. It is possible that should the Tax Department or IRS not accept an installment agreement, they may refrain from levying against your bank account or wages or any other collection activities until you are on better financial footing.
If this is not possible, then an offer in compromise might be a more better alternative.
Offers in Compromise
If the underpayment or assessment is substantial, you can seek to pay only a part of what you owe through an offer in compromise. You should probably have a tax professional like a CPA or tax attorney negotiate this for you.
An offer in compromise is a commitment on your part to pay a reduced amount over a period of years. This avoids litigation expenses. The IRS will accept an offer only if there is doubt regarding collectability supported by a Collection Information Statement (IRS Forms 433-A or B) in which you must disclose your assets. There is a fee associated with the form. For liabilities over $100,000, you must provide a full credit report and your financial statement information must be no older than 6-months prior to submission of the offer in compromise.
Also, your tax returns must be current to be eligible and there can be no tax liabilities not being paid as they accrue.
Bankruptcy Protection
You might consider with the advice of a financial expert and bankruptcy attorney if filing bankruptcy is your best option. A Chapter 7 bankruptcy is a liquidation of debts, including some tax debts. A Chapter 13 is a reorganization that can result in a payment plan that includes your tax debt.
You do have to qualify for a Chapter 7 filing. If eligible, the IRS and New York Tax Department would be included as an unsecured or low priority creditor unless they filed a tax lien. For individual tax liabilities to be dischargeable, you must meet the following:

  • More than 3 years has passed since you filed the tax return
  • The tax return must have been filed 2 years before the bankruptcy petition is to be filed
  • At least 240 days has passed since an IRS assessment
  • The tax debt was not the result of a conviction for tax evasion or tax fraud

Otherwise, a Chapter 13 might be available for you to pay your debt over a period of up to 60-months. You should consult with a bankruptcy attorney or CPA before you take this step as options other than bankruptcy might be more beneficial to your particular circumstances.

4 years 9 months ago

woman-handcuffs-article-5Lynn Y. Zoiopoulos, 58, a former Rockford physician, recently faced a federal grand jury on charges that include three counts of mail fraud and two counts of making false statements in a bankruptcy case.  Ziopoulos is facing charges in relation to her bankruptcy filing in which she hid financial assets that included a financial estate […]

4 years 9 months ago

Student Loans and Tax Refunds
Student loans and tax returns go together.
The federal government originates all federal student loans. It also processes your tax return each year, handing out refund checks in cases of overpayment.
When you don’t pay your student loans and they go into default, your refund may be at risk.
Here’s what you need to know, and how to handle the situation.

Tax Refund Offset Program
Federal regulations allow the U.S. Department of Education to grant claims to the Department of the Treasury for collection of default student loans by offset against federal and/or state income tax refunds and any other payments authorized by law.
The Department can request the Treasury Department to offset and collect any defaulted federal student loan debt.
It’s important for you to understand that the offset process applies only to defaulted student loans, not to those that are being paid on time or those that are merely past due.
In order to be declared in default, you must typically be at least 270 days late on your federal student loan payments.
How You Find Out You’re Going To Lose Your Tax Refund
Federal law requires the Department to give you prior notice of the proposed offset. As part of that notice, you have a chance to review your loan records and object to the offset.
You have only 20 days from the date of the notice to request copies of your loan records, and 65 days from the date of the notice to request a review of the loan file.
To do so, you’re going to need to send a letter with your name, social security number, the loan information, a written objection to the debt, whether you are requesting a hearing in person or by telephone, and provide any documents which support your objection.
Losing Your Refund If You File Taxes Jointly
What if you owe money on defaulted student loans but your spouse doesn’t?
Federal tax refunds payable to joint filing couples are subject to offset, but you can get back the portion of the refund owed to your spouse. The procedure for doing so is by filing an injured spouse claim with the Internal Revenue Service.
If you haven’t already filed your federal income return and know you’re going to have a problem with a tax refund offset, attach IRS Form 8379 to your original return and be sure to write “injured spouse” in the upper left corner of the first page of the tax form. If, however, you’ve already filed your tax return then send the IRS Form 8379 separately.
Can You Get Your Tax Refund Back From The Government?
The only way you may be able to get back your tax refund after it’s been taken is to file for bankruptcy. But you’ve you a small window of time to do so, and it may or may not be worth it.
Under the bankruptcy laws, the trustee can recover money paid to a creditor within 90 days of the date on which the bankruptcy case is filed, so long as the amount paid is more than $600. If you can exempt the amount of the tax refund, however, you’re the one who can get back the money.
If your bankruptcy is filed under Chapter 13, then you can bring the preference lawsuit to get the money back even if you can’t exempt the refund.
Even if you can get back the money, you should talk with your lawyer about whether it makes sense to do so. The cost and time involved in getting back the money may not be worth it.
And if student loans are your only debt, bankruptcy may not provide you with any benefit other than getting back your refund.
Preventing Future Tax Refund Offsets
Once the wheels of a tax refund offset are in motion, it’s tough to stop it from continuing down the tracks unless you take action.
To prevent the loss of next year’s refund you’re going to need to work with the U.S. Department of Education to get onto a payment plan for your loans. For most people, that means rehabilitation of your federal student loan and getting into a plan such as income-based repayment.
Private Student Loans Are Different
The tax refund offset program applies only to federal student loans. If you’re worried about private student loans, your concern shouldn’t include your refunds.
In order for a private student loan company to take anything from you, they’re going to have to sue you in court just like any other creditor. Once the lender gets a judgment against you, your bank account may be frozen and a portion of your wages taken. Though the tax refund can be taken if it’s sitting in the bank account, the lender can’t simply ask the federal government to turn over your tax refund.
Be Proactive To Minimize The Damage
As you can tell, the government is going to take your tax refund only if you don’t do something about the federal student loans.
If you fall behind, get into a repayment plan to catch up.
If you go into default, look into rehabilitation or consolidation (or both).
And if it’s a private student loan, defend the case if you’re sued.
Do nothing, though, and you’re likely to wake up one day with a bad situation on your hands.

4 years 8 months ago

By Mary Ann Gorman
In a week that first saw fast food pizza chain, Sbarro, file Chapter 11 bankruptcy, the trend continues. Yesterday, toasted-sub chain Quizno's Subs filed for Chapter 11 as well.
The company says not to worry as they have a plan in place.
Quizno's Subs' CEO said in a statement, "The actions we are taking are intended to enable Quizno's to reduce our debt, execute a comprehensive plan to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits for our franchise owners."
The restructuring is focused on a debt reduction plan that takes care of $400 million.
While Quizno's Subs is mainly a franchised chain, individual franchise owners ran into problems with the prices Quiznos was charging them for ingredients. Although many prices were eventually altered, it may not have been timely enough for some.
Included in the restructuring plan is a rebate program for franchise owners and new incentives for future franchisees.
With big competitors, such as Subway, Potbelly and Noodles and Company, Quizno's has fallen behind in the world of advertising and additional investments are planned to be made in that area as another part of the restructuring plan.
Over the past 4 or so years, Quizno's Subs has gone from approximately 5,000 operations to just about 2,000; therefore, profits have fallen accordingly and advertising has been affected as a result.
Besides investing more in advertising, Quizno's has introduced toasted pastas to their menu and gone back to their original practice of adding veggies to their sandwiches before toasting.