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Creditors Collection Tool As a wage earner, nobody wants to see their wages garnished. Whenever a person is working for wages and they have an outstanding monetary judgment against them, there is always the risk and concern that a wage garnishment summons could be forthcoming. Judgment creditors and their lawyers have access to information which+ Read More
The post Wage Garnishment Proceedings: An Employer’s Perspective appeared first on David M. Siegel.
The biggest money pit I see when I interview prospects with financial problems is the car — always. I have even seen people paying half of their disposable income in car payments (plus insurance, tolls, repairs, maintenance, tickets and all the other costs we don’t often consider). It’s insane. Here’s a post from Jay Miles in Quora.com, in answer to a young man thinking about buying a Tesla, that says it perfectly:
“No, don’t buy a car. Cars don’t make money. They’re depreciating assets. You already have a wife, so there’s no need to show off.
Mathematically, it doesn’t make sense to ever spend more than $20,000 on a vehicle. Despite being a cool Tesla, it won’t hold its residual value any more than another flashy brand.
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© Daniel Steger for openphoto.net
The biggest money pit I see when I interview prospects with financial problems is the car — always. I have even seen people paying half of their disposable income in car payments (plus insurance, tolls, repairs, maintenance, tickets and all the other costs we don’t often consider). It’s insane. Here’s a post from Jay Miles in Quora.com, in answer to a young man thinking about buying a Tesla, that says it perfectly:
“No, don’t buy a car. Cars don’t make money. They’re depreciating assets. You already have a wife, so there’s no need to show off.
Continue reading
© Daniel Steger for openphoto.net
The biggest money pit I see when I interview prospects with financial problems is the car — always. I have even seen people paying half of their disposable income in car payments (plus insurance, tolls, repairs, maintenance, tickets and all the other costs we don’t often consider). It’s insane. Here’s a post from Jay Miles in Quora.com, in answer to a young man thinking about buying a Tesla, that says it perfectly:
“No, don’t buy a car. Cars don’t make money. They’re depreciating assets. You already have a wife, so there’s no need to show off.
Continue reading
Beginning December 1, 2016, Proposed Federal Bankruptcy Rule, Fee and Form Changes will take effect. The bulk of the changes will relate to litigation and notice provisions. There will not be significant changes to the debtor’s bar. There will be a $1.00 increase in filing fees for amending the creditor list or notice list. The+ Read More
The post New Bankruptcy Rule, Fee and Form Changes Effective 12-1-16 appeared first on David M. Siegel.
Here at Shenwick & Associates, many of our clients have concerns about tax debts. However, our bankruptcy practice is over 20 years old, and in our experience, tax debts are more easily resolved than student loan debts.
In order to discharge taxes in bankruptcy, the taxpayer must show that:
- There is no fraudulent or willful evasion of the tax debt.
- The tax debt is at least three years old.
- A return for the tax debt was filed at least two years ago.
- The income tax debt was assessed by the IRS at least 240 days ago.
Other options outside of bankruptcy also exist for resolving tax debts:
- Currently Not Collectible (CNC) Status. If the IRS agrees that you can't both pay your taxes and your reasonable living expenses, it may place your account in CNC (hardship) status. While your account is in CNC status, the IRS will not generally engage in collection activity (for example, it won't levy on your assets and income). However, the IRS will still charge interest and penalties to your account, and may keep your refunds and apply them to your debt.
Before the IRS will place your account in CNC status, it may ask you to file any delinquent tax returns.
If you request CNC status, the IRS may ask you to provide financial information, including your income and expenses, and whether you can sell any assets or get a loan.
If your account is placed in CNC status, during the time it can collect the debt the IRS may review your income annually to see if your situation has improved. Generally, the IRS can attempt to collect your taxes up to 10 years from the date they were assessed, though the 10-year period is suspended in certain cases. The time the suspension is in effect will extend the time the IRS has to collect the tax.
- Offer In Compromise (OIC). An OIC allows you to settle your tax debt for less than the full amount you owe. It may be an option if you can't pay your tax liability, or doing so creates a financial hardship. The IRS considers your unique set of facts and circumstances:
Ability to pay;
Income;
Expenses; and
Asset equity.The IRS generally approves an OIC when the amount offered represents the most it can expect to collect within a reasonable period of time. However, to be eligible for an OIC, taxpayers must be current with all filing and payment requirements.
- Installment Agreement. If you're financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. Before applying for any payment agreement, you must file all required tax returns.
Tax cases and their resolution are challenging, even for experienced practitioners. For advice on how to deal with your tax debts, please contact Jim Shenwick.
Most people are aware that the debt reducing and elimination powers provided by bankruptcy are unmatched. Assuming ideal circumstances which include a straight bankruptcy under Chapter 7 bankruptcy, few or no complications, and unsecured debts, an individual can eliminate their debts and get a fresh start in as little as six months. However, in some instances, individuals who have fallen into debt have additional concerns that exacerbate one’s need to eliminate debt quickly. Frequently, the goal of protecting one’s property and assets like a family home or homestead are equally important to the bankruptcy filer. (S)he may reason that a fresh start means little without protecting and keeping his or her family home. If you’re concerned about filing for bankruptcy in California, contact a Folsom bankruptcy attorney of The Bankruptcy Group, P.C. for a consultation.
What Is a Homestead and What Does It Mean to Have Equity?
A homestead is simply the legal word that describes a family home and residence, as well as the land and surrounding facilities. While a homestead can be limited to just the family home, it can also be more expansive. For instance, when a homestead is a family farm, it may also include the land and the outbuildings.
Generally speaking, most people cannot buy their home in cash. As such, most people will agree to take out a loan which is secured by the property. This is the mortgage on the property. As the homeowner pays off the mortgage, (s)he builds equity. Equity is the ownership interest in the property that the homeowner currently has. This can be calculated by finding the difference between the value of the home and the amount still owed on the mortgage.
Consider a hypothetical home that was appraised for $150,000. The balance on the homeowner’s current mortgage is $50,000. The homeowner’s equity is the difference between the $150,000 appraisal and the remaining mortgage of $50,000. In this scenario, the homeowner would have $100,000 in equity.
Can I Protect My California Home from Foreclosure or Liquidation if I Don’t Make a Homestead Declaration Before Bankruptcy?
It is important to note that one is not required to make a homestead declaration in California before one can utilize the homestead exemptions and protections in the U.S. Bankruptcy Code. This means that a bankruptcy filer in California can elect to utilize the $75,000 in home equity protection provided by California’s bankruptcy exemptions. Furthermore, certain individuals are permitted to protect even greater amounts of equity. For instance, a head of a household may protect up to $100,000 in equity. Senior citizens, individuals with certain disabilities, and others may protect up to $175,000 in homestead equity. To be clear, these exemptions and protections are all available regardless of whether the individual declares a homestead.
Should I Still File a California Homestead Declaration?
Homeowners with certain concerns or who are facing certain debt situations may be able to obtain additional protections by declaring their homestead. A declared homestead is required to be the principal and actual dwelling of the declared homestead owner. However, following the initial declaration, there is no ongoing requirement for the homeowner to continue living in the residence.
Recording the homestead declaration will permit a homeowner to maintain priority over any and all subsequent judgment creditors. In taking this action, a homeowner will be entitled to an exemption even when the sale of the home is voluntary. Thus, an individual with debts who still wishes to sell the family home may use this procedure to avoid a situation where all proceeds from the sale are captured by creditors. Since the proceeds must be reinvested into the purchase of a home within 6 months, this is often a viable option for Californians who are looking to downsize or relocate their living arrangements while coping with serious debt problems. However, it is important to consult with a bankruptcy lawyer regarding homestead exemptions and declarations because timing and attention to detail can frequently make the difference between a successful transaction and a serious, potentially irreversible error.
Work with a Folsom Bankruptcy Lawyer of The Bankruptcy Group, P.C.
If you have serious debt concerns and are worried about creditors foreclosing on your home or seizing other assets, the California Chapter 7 and Chapter 13 bankruptcy attorneys of The Bankruptcy Group may be able to help. From our Roseville and Folsom, California law offices we can provide strategic bankruptcy and foreclosure guidance. To schedule a free and confidential consultation, call 1-800-920-5351 or contact us online today.
The post Do I Need to Make a Homestead Declaration in California Before Filing for Bankruptcy? appeared first on BK Law.
Do you know where you want to be in 20 years? What does that picture look like?
When facing debt problems, it is very important to envision what you want your financial life to look like in 20 years. Because when you fail to have a clear vision of what the ideal life looks like, you tend to repeat the present problem. Sure, you may get out of today’s financial mess, but then old habits return and the problem resumes.
When facing that life changing debt struggle, it is very important to write down very specific financial goals. Very specific goals.
- I want my home paid off by age 55.
- I will save up 6-months of wages in a savings account.
- I want to take my grandchildren to the beach every summer until I die.
- I want to quit my full-time job by age 60 and then work part-time and volunteer more.
- I want to travel while I’m still young and healthy.
- I want my student loans paid off before my kids start college.
Why is this important? Because knowing where you want to end up instructs you on what you need to do today.
Want to loose 10 pounds by summer? Then start walking 1 mile today, 2 miles tomorrow, and eat a healthy diet.
Want to pay off the home in 10 years? Well, you have 260 paychecks to get the job done if you are paid bi-weekly. So, how much a paycheck does it require? (Find out here.)
Want to take a 2nd honeymoon in Cancun, Mexico in 12 months? How much a paycheck does that cost?
See what just happened? Your long-term goal affects what you do now. That is why it is so important to set long-term financial goals. Without them, you lose track of how to spend that paycheck.
When deciding about whether to file bankruptcy, keeping those long-term goals in mind is important. Sure, you could opt for a debt repayment program and become debt free over 5 years, but will that undermine the long-term goal of paying off student loans or a mortgage?
Solving today’s temporary financial problem is only part of the analysis. Most people underestimate what they can accomplish over a long period of time. The difference between paying off a mortgage over 15 years instead of 30 years is usually about $100 per month. That’s really not much more, so why not do it? A lousy $20 investment per week in a 401(k) plan yields a substantial retirement. Eating 100 few calories per day results in substantial weight loss over a year.
Tell me where you want to be in 20 years and I’ll tell you what you need to do with your money today.
There is only one day in your life that you have power over money, and that day is payday. What you do or fail to do on payday determines whether you win or lose. Decide to win today.
The filing fee is $335.00 for a Chapter 7 bankruptcy filing. The filing fee for a Chapter 13 bankruptcy case is $310.00. Some attorneys will allow for the attorney’s fees to be paid over an extended period of time.
The post What Does A Bankruptcy Cost? appeared first on David M. Siegel.
Most individuals and business owners are probably already aware that bankruptcy is one of the most expedient ways to address financial problems caused from excessive debt. The constant creditor calls can cause stress, anxiety, and embarrassing situations. In some instances, hounding by creditors may interfere with one’s job or other business relationships. In other scenarios, a business owner may face significant obligations due to certain contracts or prior agreements, and outside of bankruptcy, lack the leverage needed to renegotiate these contracts.
A Sacramento bankruptcy attorney of The Bankruptcy Group can provide solutions to address the full range of debt problems that people and businesses in California can face. In this post, our bankruptcy lawyers explain some of the additional features and powers of bankruptcy that can be used to handle a difficult financial situation. To discuss if these or another approach are a good fit for your financial situation, call The Bankruptcy Group at 1-800-920-5351 or contact us online today.
Bankruptcy Can Permit a Filer to Accept or Reject Certain Contracts or Leases
One of the more useful and powerful tools authorized by the United States Bankruptcy Code are the provisions concerning a debtor’s ability to assume or reject certain contracts. Specifically, the U.S Bankruptcy Code authorizes bankruptcy filers to avoid or accept executory contracts and unexpired leases. An executory contract is simply the legal way to describe a contract under which both parties of the agreement have remaining material obligations to fulfill.
While the code sets forth rules for when a debtor can accept and reject contracts, this provision allows for individuals and businesses to keep certain favorable contracts while eliminating those that have become a drag on the entity’s finances. Bankruptcy filers may assign assumed contracts to third parties, but certain caveats apply. For instance, any defaults must be cured prior to assignment.
Bankruptcy Can Provide Avoidance Powers and Allow an Entity to Recapture Assets
The U.S. Bankruptcy Code also includes provisions that are known as “avoidance powers.” Avoidance powers can be utilized to essentially turn back the clock and unwind certain financial actions that were taken in the period immediately preceding the bankruptcy. In situations where an individual or company’s financial health declined suddenly and precipitously, strategic use of avoidance powers can permit for the recapture of assets to satisfy creditors and handle debts.
Bankruptcy filers can essentially unwind certain transactions occurring within 90 days of the bankruptcy filing or the relevant preference period. An experienced Sacramento small business bankruptcy lawyer can assess your situation to determine whether transactions can be avoided, and thus, the assets can be returned to the entity.
Bankruptcy’s Automatic Stay Stops Creditor Calls and Collection Attempts
One of the biggest complaints and concerns potential clients express when they come into our bankruptcy law firm is that they want creditor collection calls to stop. Thankfully, and in most cases, bankruptcy’s automatic stay will stop creditor communications. The automatic stay is available for all forms of bankruptcy including Chapter 7, Chapter 11, and Chapter 13 bankruptcy.
However, the automatic stay only provides temporary relief. The good news is that the automatic stay and bankruptcy process means that creditor collection attempts will be limited to in-court proceedings as part of the bankruptcy process. In certain scenarios, the automatic stay may even be used to temporarily stave off a foreclosure or other action until more permanent relief can be arranged. To receive permanent relief, the individual or business will still need to proceed through the bankruptcy process and receive a bankruptcy discharge to correct the underlying debt issues that likely motivated the bankruptcy.
The U.S. Bankruptcy Code Contains Numerous Provisions to Help Eliminate Debt
At this point, it should probably be clear that the U.S. Bankruptcy Code contains numerous provisions that can be utilized by a strategic attorney to resolve your debts. The abilities to assume or reject contracts, avoidance powers, and even the automatic stay are all aspects of the bankruptcy code that the filer can use. To discuss your concerns with a bankruptcy attorney located in Roseville and Folsom, call 1-800-920-5351 today. All bankruptcy consultations are confidential and the initial consultation is free.
The post Bankruptcy Can Not Only Eliminate Debt but Also Grant Additional Powers to Business Owners appeared first on BK Law.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.