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2 weeks 1 day ago

Trying to Settle Her Debts through Americor, Liz gets a Warrant in Debt Liz was shocked when the sheriff brought a warrant in debt for her $2680 Victoria’s Secret account. Liz Tried to Settle Her Debts Liz tried to settle her debts. She worked through Americor and gave them $664 per month. Victoria’s Secret was […]
The post Settling Her Debts through Americor, Sheriff Brings a Warrant by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.


2 weeks 2 days ago


It’s September in Nebraska.  Labor Day is over.  The kids are back in school. Footballs are in the air, especially in Nebraska where our beloved Cornhusker football team has abandoned tradition and is throwing the football everywhere. Yep, I hate it. I so miss power football.
Back to the topic at hand.
The authors of the Bankruptcy Reform Act of 2005 believed that debtors frequently failed to report all their available income, so to address this issue the new law requires a debtor to disclose all “household income.”
Household income is more than just the wages of the debtor.  It includes the wages of the debtor’s spouse and any other source of regular income.
Bankruptcy attorneys are charged with a special duty to investigate the income of a debtor and to report all income received in the prior six months.  Attorneys must certify that they performed a “due diligence” inquiry of the debtor’s past and present income.
How does an attorney perform investigate household income?
We start by gathering six months of paycheck stubs.  We also collect six months of bank statements and determine the source of each deposit.  We also review two years of tax returns and create an inventory of assets.
If a debtor is self-employed, we inspect the business records.  Bank accounts. Balance Sheets. Inventory. Tax returns.
Household income received in the prior six months is a key factor in every consumer bankruptcy case.
If income exceeds certain levels, the doors of Chapter 7 close.  Rather, a debtor is left to file a 5-year Chapter 13 payment plan. If income is below median income, a chapter 13 plan may be completed in 3 years.
Two key factors must be measured:

  • Median Income: Debtors whose household income exceeds the median income level for a particular household size will find it difficult to file Chapter 7.  What’s more, those with above-median income levels will be required to pay back a percentage of their debt based on a mathematical formula call the Means Test.
  • Household Size: Median income is based on household size. The larger the household, the higher the debtor’s income may be to qualify for chapter 7.

Correctly stating a debtor’s household size and income is critical.  This is the gateway to Chapter 7 and shorter 3-year chapter 13 plans.
So, this is the game.  Get it? To be an effective bankruptcy attorney you must manipulate the debtor’s income and household size to qualify for chapter 7.  By not including some income and by including more people in the household, an attorney can qualify debtors for chapter 7 or short-term chapter 13 payments.
Calculating household size and income is absolutely critical.  It is the foundation block of every case.
And because these measurements are the doors through which all debtors must pass, there is a great temptation by debtors and their attorneys to understate income and overstate household size.
This is the topic I would like to explore in the next several posts.  How do attorneys cleverly understate a debtor’s income and get away with it? How can debtors exaggerate their household size to fall below median income limits?
 
Image courtesy of Flicker and Kiley


2 weeks 3 days ago

Investopedia has a helpful article titled "How to File for Student Loan Bankruptcy" The article can be found at https://www.investopedia.com/how-to-file-student-loan-bankruptcy-4772237
Jim Shenwick, Esq [email protected] 212 541 6224


2 weeks 4 days ago

NYS Equitable Distribution Law and Fraudulent ConveyancesFreeman Law wrote a very interesting and informative article  titled Can Trustees Avoid Transfers Made Pursuant to Divorce Decrees or Other Agreements Incident to Divorce?  The article was published in JD Supra at https://www.jdsupra.com/legalnews/can-trustees-avoid-transfers-made-3271604/?origin=CEG&utm_source=CEG&utm_medium=email&utm_campaign=CustomEmailDigest&utm_term=jds-article&utm_content=article-linkIn the article, the author discusses whether Bankruptcy Trustee’s in Ohio can avoid transfers made pursuant to divorce decrees (yes according to the author)  and discusses fraudulent conveyance law.In NYS the division of marital property is governed by equitable distribution. Which is defined as a  division of marital property between spouses that is equitable or fair. The division does not have to be equal to be considered fair.As a result, if a couple is divorcing in NYS and one spouse owes money to creditors, the divorce presents an opportunity for the spouse who owes money to creditors (a debtor) to make themselves judgment proof or otherwise engage in  asset protection planning.Let’s look at an example. A couple is married and they own a house that has appreciated in value. The house has a fair market value of $1,000,000 and is subject to a $250,000 mortgage. The couple has 2 minor children and custody of the children will be given to the mother, who does not work.The husband had started a business which subsequently failed and he owes or has guaranteed debt exceeding $2,000,000.  The husband cannot repay that debt in the near term and he expects to get sued in the future.During the divorce process, each spouse hires a divorce attorney, and the husband consults a bankruptcy attorney who advises him to transfer the house to his wife.When the divorce is finalized, the husband has few assets that can be liened or levied by creditors and the wife has a house for herself and her children.Does NYS or bankruptcy law consider the conveyance of the house a fraudulent conveyance? Depending on the facts probably not and if a creditor were to challenge the conveyance it would result in lengthy and costly litigation. Clients with questions about fraudulent conveyance law and bankruptcy should contact Jim Shenwick, Esq   [email protected]   212 541 6224


3 weeks 2 days ago

 The New York Times has an article about the pending legal battle about Biden's Student Loan Cancellation program. The article is titled Biden’s Student Loan Plan Could Face a Protracted Legal Fight. The article can be found at https://www.nytimes.com/2022/09/01/us/politics/biden-student-loan-plan-l...
Jim Shenwick,Esq. 212 541 6624 [email protected]


3 weeks 4 days ago

 PR News Wire has an article titled "3 Steps to Take Before Declaring Bankruptcy" the article can be found at https://www.prnewswire.com/news-releases/3-steps-to-take-before-declaring-bankruptcy-301614057.htmlWe have helped hundreds of individuals and businesses file for bankruptcy.Jim Shenwick, Esq. [email protected] 212 541 6224


3 weeks 5 days ago

 Mayor Adams, TLC, Marblegate Asset Management, NYTWA Announce Historic Taxi Medallion Debt Relief Program Deal, Providing Hundreds of Millions of Dollars in Relief to NYC Medallion Owners. The article can be found at https://www1.nyc.gov/office-of-the-mayor/news/629-22/mayor-adams-tlc-mar...


3 weeks 5 days ago

 IRS Announcement: Automatic Abatement of Failure to File Penalties for Tax Year 2019 and 2020. See the fully story at https://www.gettrymarcus.com/irs-surprise-announcement-automatic-abateme...
Jim Shenwick, Esq. [email protected] 212 541 6224


1 month 2 days ago

 Eisner Amper has posted an article on Asset Protection Planning. The article can be found at https://www.eisneramper.com/seven-ways-protect-assets-from-litigation-creditors-0822/
At Shenwick & Associates, we have helped many clients with these strategies. Jim Shenwick, Esq. [email protected] 212 541 6224


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