Blogs

5 years 3 weeks ago

New Rules for Offer in Compromise
Offer in Compromise: Is it Too Good to Be True?
Late-night television ads often make false promises of being able to pay off back taxes with pennies on the dollar. What they were referring to is called a offer in compromise. The Internal Revenue Service rules allow taxpayers to pay less than is owed when it is clear that it is not feasible for the taxpayer to pay the full amount. All the details of the program are included in the IRS’s booklet offer-in-compromise.
IRS Rejects Most Offer in Compromise Proposals
Traditionally, most offer-in-compromise proposals were rejected by the IRS. Yesterday, the Internal Revenue Service announced a new program, an expansion of its “Fresh Start” program, that will make it easier to have an offer-in-compromise accepted.
New Rules Make Offer in Compromise Easier
In general, the IRS looks at a person’s ability to pay taking into account both their current assets and future earning ability. The main changes in the program reduce the length of time a taxpayer will have to devote their future income to funding the proposed offer. Instead of having to devote a full five years of future income to the calculation of the proposed offer a taxpayer may be able to use only one year of future income.
New Offer in Compromise Guidelines
Another significant change is how a person’s disposable income will be calculated. The IRS uses a schedule of personal expenses called National Standards to calculate what a person’s reasonable expenses are. Then, those expenses are deducted from a person’s income to derive at the amount the IRS feels should be devoted to paying the tax liability. These National Standards are considered by most to be overly strict. The announced change liberalizes the standards and hopefully will be more economically realistic for the taxpayer.
Offer in Compromise Help
If you are faced with an overwhelming tax bill making an offer-in-compromise is just one option. There are a number of tools and approaches that can be used to solve financial problems. Feel free to give us a call at 480-820-0800 to learn more about how we can help you deal with tax problems and money trouble.
Original article: Offer in Compromise: Is the IRS Ready to Give You a Break?©2013 Arizona Bankruptcy Lawyer. All Rights Reserved.The post Offer in Compromise: Is the IRS Ready to Give You a Break? appeared first on Arizona Bankruptcy Lawyer.


5 years 3 weeks ago

You file bankruptcy and surrender your home through the bankruptcy. You do not have to worry about the house anymore right? Wrong! The bankruptcy takes care of your legal liability for the DEBT on the house. It does not remove your name from the deed of the property, meaning you are still the owner until the bank forecloses.Steps to Take When Surrendering a Property Through Bankruptcy:1. Purchase hazard insurance to cover any problems that arise while the house is vacant. A regular home owner's policy does not cover damage that occurs when the house is vacant.2. Winterize the home (if applicable): draining water from the pipes and/or leaving the heat on so the pipes do not freeze or burst.3. Maintain yard (if applicable): cut grass and trim as necessary to avoid citations from the city/county.Failure to do so can result in penalties and fines: Failing to have insurance or winterize the house will not affect the bankruptcy, HOWEVER:

  • If the house is vandalized and/or the pipes burst the city/county will come after the owner of the house to fix the problems.
  • The bankruptcy only takes care of the loan on the house, not the deed. It is the debtor's property until a sale occurs to transfer ownership.
  • Fines or repair bills that arise after the filing of the bankruptcy are not part of the debts that are discharged.

Example: Debtor files bankruptcy and surrenders the real estate and moves out.  The house is vandalized and the mortgage company delays foreclosure. The debtor did not keep insurance on the house. The debtor now is not liable on the loan, but also cannot sell the house in the present condition, especially since the lien is against the property. The debtor is being told to board up the windows, pay fines, etc. Problem: Debtor cannot force the mortgage company to foreclose if it does not want to. The debtor is then stuck with the property including cutting the grass in the summer and winterizing it in the winter.   


5 years 3 weeks ago

If I file bankruptcy today will my paycheck still be garnished tomorrow?The short answer is yes.  However, there are several things to keep in mind:If you are being garnished, you are likely filing bankruptcy to stop that garnishment. Filing bankruptcy will stop the garnishment. Creditors are not allowed to collect from you while you are in the bankruptcy. However, given that payroll is likely done several days before you are actually paid, the garnishment may continue 1-2 paychecks after the bankruptcy is filed.  It is not as simple as filing and the garnishment stopping. Here is what has to happen:

  1. You file bankruptcy (making sure you list the creditor that is garnishing as well as the attorney for that creditor so that they can receive notice).
  2. After filing, have your attorney contact the creditor’s attorney and give them notice of the bankruptcy and request a release of garnishment. The creditor’s attorney then has to process this request and then send notice of the release of garnishment to both your attorney and to your employment to stop the garnishment.
  3. Once your payroll department receives the garnishment they release the garnishment and stop deducting from your paychecks.

This can happen in 1 day or in 1-2 weeks depending on how quickly the creditor and the payroll department move. However, if you are garnished AFTER the filing of the bankruptcy any money taken will be returned to you but again the time that this takes can range from a few days to a few weeks based on the creditors attorney and your payroll department depending on who has the money when the notice if received.To avoid all of the above, file the bankruptcy because you even receive a garnishment, a judgment or a summons. If you are in debt and cannot afford to pay your way out of debt, consult a bankruptcy attorney.


5 years 3 weeks ago


Fb-Button

Affairs of the Checkbook: a Growing Problem…
When the word “infidelity” comes to mind, most people think of an extramarital affair, of a husband, wife or significant other cheating by sneaking around with another lover.  In fact, America is so obsessed with the concept that there is an entire industry called daytime TV devoted to different versions of the issue. However, despite the fact that affairs of the heart receive most of the attention, affairs of the checkbook can be equally damaging and are rising in number. Financial infidelity can be defined as one member of a couple, who have consolidated their finances, lying about expenditures, credit card accounts, bank accounts and even earnings. According to Forbes, one in three Americans who have combined their finances admitted lying to their spouses about money, and another one-third of these adults said they’d been deceived.
A Personal Story
Although I have not had to deal with financial infidelity personally, the topic does remind me of a well-known story from my hometown. I grew up in Bloomfield Hills Michigan, an affluent suburb of Detroit.  One of the Dads who coached my little sister’s soccer team was a well-liked and well-respected auto executive who outwardly appeared to have everything going for him. Unfortunately, this man, who we’ll call Jim, developed a gambling problem. At the time, Windsor, Canada, which is across the river from Detroit, housed the area’s only available casinos. Jim started to visit the casinos rather than going to work and eventually began to rack up large debts. His work suffered and he was fired. Rather than tell his family what happened, Jim woke up every morning, put on a suit and pretended to be heading off to work. However, rather than going to the office, Jim dutifully visited the casinos. Rumor has it that he gambled away most of his families savings before going on a spree of bank robberies to fuel his gambling habit. When he was eventually caught, the community was shocked and saddened. Jim’s family was devastated and put in dire financial straits. While this example is admittedly extreme, it provides an important lesson. The financial decisions of your spouse deeply affect you.
How a Financial Affair Can Lead to Bankruptcy
Other blogs and articles have covered the trust issues that are created by financial infidelity, so I won’t rehash them here. Instead, I want to delve into the ramifications that affairs of the checkbook can have on an innocent spouse. It is all too common in marriages for either the husband or wife to be solely responsible for managing finances. As a result, it’s not as difficult as you might imagine for one spouse to make expenditures that the other is unaware of. Similarly, large expenditures made over short period of time can fly under the radar. When joint credit is used, both parties to the loan are guarantors who are ultimately responsible for payment. If one spouse files for bankruptcy or cannot afford to make payments, the other will be solely liable. In situations where the breadwinner is the party sneaking around financially, poor decisions can wreak havoc on the more financially dependent party, especially in community property states. For example, if a wife who earns the majority of the household income spends lavishly on a joint credit card without telling her husband and the couple separates as a result, the husband will be on the hook for those purchases just as much as the wife. In community property states like California, the courts see the debts accrued over the course of the marriage as the responsibility of both parties. In the example above, the husband would have to take responsibility for his share of his ex-wife’s financial recklessness despite the fact that he earned far less money than his ex and did not spend the money himself. Situations like this often lead to one party being forced to pay the high cost associated with bankruptcy to get rid of the debt. In community property states, even if the wife were to have incurred the credit card bills on her own account, in her own name, the husband would still be liable for his portion. By contrast, in equitable distribution states, attorneys and a judge determine who owes what. In other words, in equitable distribution states, if your spouse racked up a lot of credit card debt in secret, you’re more likely to come out of your marriage not owing any of that money. Bankruptcy attorney can tell you where the story often ends: consumers who find themselves saddled with the debts of an ex-spouse are often forced to pay a bankruptcy lawyer to discharge the debt.
John O’Connor is a consumer class action attorney and founder of the National Bankruptcy Forum, a resource for consumers looking for information about bankruptcy.
 


3 years 2 months ago

Affairs of the Checkbook: a Growing Problem…
When the word “infidelity” comes to mind, most people think of an extramarital affair, of a husband, wife or significant other cheating by sneaking around with another lover.  In fact, America is so obsessed with the concept that there is an entire industry called daytime TV devoted to different versions of the issue. However, despite the fact that affairs of the heart receive most of the attention, affairs of the checkbook can be equally damaging and are rising in number. Financial infidelity can be defined as one member of a couple, who have consolidated their finances, lying about expenditures, credit card accounts, bank accounts and even earnings. According to Forbes, one in three Americans who have combined their finances admitted lying to their spouses about money, and another one-third of these adults said they’d been deceived.
A Personal Story
Although I have not had to deal with financial infidelity personally, the topic does remind me of a well-known story from my hometown. I grew up in Bloomfield Hills Michigan, an affluent suburb of Detroit.  One of the Dads who coached my little sister’s soccer team was a well-liked and well-respected auto executive who outwardly appeared to have everything going for him. Unfortunately, this man, who we’ll call Jim, developed a gambling problem. At the time, Windsor, Canada, which is across the river from Detroit, housed the area’s only available casinos. Jim started to visit the casinos rather than going to work and eventually began to rack up large debts. His work suffered and he was fired. Rather than tell his family what happened, Jim woke up every morning, put on a suit and pretended to be heading off to work. However, rather than going to the office, Jim dutifully visited the casinos. Rumor has it that he gambled away most of his families savings before going on a spree of bank robberies to fuel his gambling habit. When he was eventually caught, the community was shocked and saddened. Jim’s family was devastated and put in dire financial straits. While this example is admittedly extreme, it provides an important lesson. The financial decisions of your spouse deeply affect you.
How a Financial Affair Can Lead to Bankruptcy
Other blogs and articles have covered the trust issues that are created by financial infidelity, so I won’t rehash them here. Instead, I want to delve into the ramifications that affairs of the checkbook can have on an innocent spouse. It is all too common in marriages for either the husband or wife to be solely responsible for managing finances. As a result, it’s not as difficult as you might imagine for one spouse to make expenditures that the other is unaware of. Similarly, large expenditures made over short period of time can fly under the radar. When joint credit is used, both parties to the loan are guarantors who are ultimately responsible for payment. If one spouse files for bankruptcy or cannot afford to make payments, the other will be solely liable. In situations where the breadwinner is the party sneaking around financially, poor decisions can wreak havoc on the more financially dependent party, especially in community property states. For example, if a wife who earns the majority of the household income spends lavishly on a joint credit card without telling her husband and the couple separates as a result, the husband will be on the hook for those purchases just as much as the wife. In community property states like California, the courts see the debts accrued over the course of the marriage as the responsibility of both parties. In the example above, the husband would have to take responsibility for his share of his ex-wife’s financial recklessness despite the fact that he earned far less money than his ex and did not spend the money himself. Situations like this often lead to one party being forced to pay the high cost associated with bankruptcy to get rid of the debt. In community property states, even if the wife were to have incurred the credit card bills on her own account, in her own name, the husband would still be liable for his portion. By contrast, in equitable distribution states, attorneys and a judge determine who owes what. In other words, in equitable distribution states, if your spouse racked up a lot of credit card debt in secret, you’re more likely to come out of your marriage not owing any of that money. Bankruptcy attorney can tell you where the story often ends: consumers who find themselves saddled with the debts of an ex-spouse are often forced to pay a bankruptcy lawyer to discharge the debt.
John O’Connor is a consumer class action attorney and founder of the National Bankruptcy Forum, a resource for consumers looking for information about bankruptcy.
 


5 years 3 weeks ago

I recently saw an online advertisement for chapter 7 bankruptcy services by an attorney offering to do the work for rock bottom pricing.   The attorney’s website failed to clearly indicate specific office address locations and made no mention of any relevant bankruptcy experience or applicable bankruptcy credentials. Really the website failed to disclose much at all except the attorney’s rock bottom flat rate pricing for chapter 7 cases.
There is nothing wrong with offering rock bottom pricing. In most cases, this attorney’s services might be great. However, the attorney – via his website – was quick to infer that bankruptcy attorneys who charge more than rock bottom pricing for chapter 7 cases are just ripping people off.  That could not be further from the truth.
I believe this attorney’s intentions are good. I believe the attorney really thinks almost all chapter 7 cases are easy to prepare and are devoid of any complexity. If this attorney does think that, I believe it is due to a lack of experience practicing bankruptcy law and not being more well read on the intricacies of bankruptcy law.
I would be very concerned for a potential client who went to such an attorney for a chapter 7 case with tax issues, non-exempt assets, retirement accounts, or even a case where the debtor’s income is subject to the means test. The result might not be pretty. For example, if an attorney offers to get rid of huge tax assessments for rock bottom pricing via ch7 bankruptcy, I would just tell you to be very cautious and use your logic in choosing the right bankruptcy attorney to handle your case because it takes time, skill, and effort.
In practice, I have personally helped debtors who were in trouble because they either filed pro per (without an attorney) or they retained the lowest priced attorney they could find for their chapter 7 case.  Oftentimes, these attorneys screw up things that are very basic in nature.  However, when you screw up such fundamental things within the bankruptcy process, oftentimes there is no recourse but dismissal.  In other cases, it can lead to a loss of assets that could have been protected had the case been filed properly.
Remember not all cases are the same. Some chapter 7 cases are indeed considered simple cases by most capable practitioners. Other chapter 7 cases can be very complex. There are chapter 7 cases where no capable attorney would take the case without informing the client that the case is complex and problematic from the start just to clue in the potential client on what to expect. For those attorneys who usually offer rock bottom pricing, they are often only jumping in on the practice of bankruptcy law due to our sluggish economy, and it is far from clear what level of preparation they undertook before holding themselves out as bankruptcy practitioners.
There are many good and bad attorneys out there. Remember you more or less get one shot at your bankruptcy filing.  Make sure to do it right the first time around.  Ask about the attorney’s success rate and types of cases filed rather than just purely how many cases filed.   An attorney may have filed thousands of cases yet has a poor track record, or never handled your type of case before and lacks the resources to do so.   Unfortunately, some attorneys actually lie about their credentials and how long they have practiced law.  What is important is that you make sure you ask questions about YOUR case and get an answer to those questions before filing.  If you only get evasive answers or generalities about your case, your questions are not being answered so find a bankruptcy attorney out there who will actually answer them and choose that attorney to help you with your case.    In the end, use common sense in choosing the right attorney to handle your chapter 7 case and don’t simply go with the lowest fee approach unless you know the attorney is competent to take on your case because I have honestly seen it backfire firsthand.
 


5 years 3 weeks ago

By: Marshall G. Reissman, Attorney at the Reissman Law Group, P.A.
The 11th Circuit Court of Appeals recently held that debtors in Chapter 7 bankruptcy have the ability to strip off their second mortgage on their homestead property if the first mortgage is greater than the value of the home. The ability to wipe out a second mortgage in bankruptcy was previously only available to debtors in Chapter 13 bankruptcy.
Prior to this decision, many practitioners, myself included, would have counseled individuals who wanted to remain in their home, but wanted to strip off a second mortgage to file Chapter 13 bankruptcy. A United States Supreme Court decision in Dewsnup v. Timm, held that a Chapter 7 debtor could not “cram down” a partially secured debt. Cramming down a debt deals with valuing secured property to its actual value as opposed to what is owed on the collateral. This is another big reason folks file Chapter 13 bankruptcy. Many courts interpreted this decision into Chapter 7 debtors not being able to strip off wholly unsecured junior lien.
The 11th Circuit applied its “prior panel precedent rule,” which states that a later court may depart from an earlier court’s decision ONLY if an intervening Supreme Court decision is “clearly on point.” Because the decision in Dewsnup only dealt with cramming down partially secured liens and not stripping off wholly unsecured junior liens, then the 11th Circuit holding in Folendore v. United States Small Bus. Admin remains controlling precedent in the 11th Circuit.
Basically, if a junior lien is allowed under the Bankruptcy Code and is also totally unsecured under the Code, it is also voidable in Chapter 7 bankruptcy under the Code. Please call us today to see if you qualify for relief under Chapter 7 bankruptcy and if you can strip off a second mortgage.
McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012)
Dewsnup v. Timm, 502 U.S. 410 (1992).
Folendore v. United States Small Bus. Admin., 862 F.2d 1537 (11th Cir. 1989).
11 U.S.C. Sec. 502
11 U.S.C. Sec. 506(a)
11 U.S.C. Sec. 506(d)


3 years 5 months ago

By: Marshall G. Reissman, Attorney at the Reissman Law Group, P.A.
The 11th Circuit Court of Appeals recently held that debtors in Chapter 7 bankruptcy have the ability to strip off their second mortgage on their homestead property if the first mortgage is greater than the value of the home. The ability to wipe out a second mortgage in bankruptcy was previously only available to debtors in Chapter 13 bankruptcy.
Prior to this decision, many practitioners, myself included, would have counseled individuals who wanted to remain in their home, but wanted to strip off a second mortgage to file Chapter 13 bankruptcy. A United States Supreme Court decision in Dewsnup v. Timm, held that a Chapter 7 debtor could not “cram down” a partially secured debt. Cramming down a debt deals with valuing secured property to its actual value as opposed to what is owed on the collateral. This is another big reason folks file Chapter 13 bankruptcy. Many courts interpreted this decision into Chapter 7 debtors not being able to strip off wholly unsecured junior lien.
The 11th Circuit applied its “prior panel precedent rule,” which states that a later court may depart from an earlier court’s decision ONLY if an intervening Supreme Court decision is “clearly on point.” Because the decision in Dewsnup only dealt with cramming down partially secured liens and not stripping off wholly unsecured junior liens, then the 11th Circuit holding in Folendore v. United States Small Bus. Admin remains controlling precedent in the 11th Circuit.
Basically, if a junior lien is allowed under the Bankruptcy Code and is also totally unsecured under the Code, it is also voidable in Chapter 7 bankruptcy under the Code. Please call us today to see if you qualify for relief under Chapter 7 bankruptcy and if you can strip off a second mortgage.
McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012)
Dewsnup v. Timm, 502 U.S. 410 (1992).
Folendore v. United States Small Bus. Admin., 862 F.2d 1537 (11th Cir. 1989).
11 U.S.C. Sec. 502
11 U.S.C. Sec. 506(a)
11 U.S.C. Sec. 506(d)
The post Can I Strip off a Second Mortgage in Chapter 7? Now you Can! appeared first on St. Petersburg Law Blog.


3 years 4 months ago

By: Marshall G. Reissman, Attorney at the Reissman Law Group, P.A.
The 11th Circuit Court of Appeals recently held that debtors in Chapter 7 bankruptcy have the ability to strip off their second mortgage on their homestead property if the first mortgage is greater than the value of the home. The ability to wipe out a second mortgage in bankruptcy was previously only available to debtors in Chapter 13 bankruptcy.
Prior to this decision, many practitioners, myself included, would have counseled individuals who wanted to remain in their home, but wanted to strip off a second mortgage to file Chapter 13 bankruptcy. A United States Supreme Court decision in Dewsnup v. Timm, held that a Chapter 7 debtor could not “cram down” a partially secured debt. Cramming down a debt deals with valuing secured property to its actual value as opposed to what is owed on the collateral. This is another big reason folks file Chapter 13 bankruptcy. Many courts interpreted this decision into Chapter 7 debtors not being able to strip off wholly unsecured junior lien.
The 11th Circuit applied its “prior panel precedent rule,” which states that a later court may depart from an earlier court’s decision ONLY if an intervening Supreme Court decision is “clearly on point.” Because the decision in Dewsnup only dealt with cramming down partially secured liens and not stripping off wholly unsecured junior liens, then the 11th Circuit holding in Folendore v. United States Small Bus. Admin remains controlling precedent in the 11th Circuit.
Basically, if a junior lien is allowed under the Bankruptcy Code and is also totally unsecured under the Code, it is also voidable in Chapter 7 bankruptcy under the Code. Please call us today to see if you qualify for relief under Chapter 7 bankruptcy and if you can strip off a second mortgage.
McNeal v. GMAC Mortgage, LLC (In re McNeal) (11th Cir. 2012)
Dewsnup v. Timm, 502 U.S. 410 (1992).
Folendore v. United States Small Bus. Admin., 862 F.2d 1537 (11th Cir. 1989).
11 U.S.C. Sec. 502
11 U.S.C. Sec. 506(a)
11 U.S.C. Sec. 506(d)
The post Can I Strip off a Second Mortgage in Chapter 7? Now you Can! appeared first on St. Petersburg Law Blog.


5 years 3 weeks ago

Many individuals filing for bankruptcy experience various types of collections efforts prior to filing.  These collections efforts can include anything from harassing phone calls and letters to law suits and even garnishment.  If you, or someone you know, is currently receiving phone calls or other collections efforts you should contact an attorney immediately. 
Creditors can make certain efforts to collect debts, however, some types of conduct are illegal and the debtor may be able to recover monetary damages.  Even if your situation does not rise to the level of damages, collections efforts can be frustrating, embarrassing, and even costly for a debtor. 
Once you choose to retain an attorney you can inform your creditors that you are represented and provide your attorney's name and contact information to the creditor.  The attorney can then confirm representation and your creditor may stop contacting you.  However, it is important to know that your creditor is not legally required to stop contacting you until you actually file your bankruptcy petition with the court. 
Once your case is filed your creditors are not legally permitted to contact you or try to collect the debt from you.  If your creditors continue to contact you please inform your attorney. 
There is an exception to this general rule that creditors may not collect debts after filing.  If you currently have a bank account with an institution that is also listed as an unsecured creditor (i.e. you have a debit card and a credit card with the same bank), the creditor can take the funds out of your bank account until the debt is satisfied in full.  When filling out your debts  you should check to see if you owe any money to your bank for anything: including, but not limited to, credit cards, overdraft fees, and/or personal loans.  If you do you should inform your attorney who can provide advice accordingly.
While generally we are looking for unsecured debts, there are a handful of financial institutions that will block use of ATM or debit cards if you hold a secured debt (for example a car loan or home loan) with the institution pending a reaffirmation agreement.  You should still be able to access your funds from a bank branch, but your debit card may not work.  This is not the policy of every institution, but you may want to check with your financial institution prior to filing if the situation applies to you.  
If you have questions, or would like to schedule a free consultation, contact a St. Louis Bankruptcy Attorney today!


Pages