Blogs
In general, you can file a chapter 7 bankruptcy case once every eight years. For example, if you filed on January 1, 2008, then you would not be eligible to file another chapter 7 bankruptcy case until January 2, 2016. If you filed the case in between those two dates, the chapter 7 trustee or+ Read More
The post Can I File Chapter 7 Bankruptcy Again? appeared first on David M. Siegel.
Every parent has thought about it, but few want to discuss it. What happens to your children if you and your spouse both pass away before your children grow up. Who will care for them? Who will cover the costs of raising them? How will they go to college? Who will control their inheritance? These are very tough questions, but they must be answered.
A proper estate plan can account for this worst case scenario. A guardian can be named to care for your children and a back up guardian can be chosen in case the first choice is unable or unwilling to serve. A revocable trust can be set up that dictates the terms under which money shall be disbursed, first to the guardian and later to your children. The Trustee should be someone that you trust to work with your children’s guardian, but also protect your children’s financial future. Life insurance can be purchased and the alternative named beneficiary can be your revocable trust. Terms of the trust can also include information about college attendance, military service, or other career paths.
Additionally, a proper estate plan can account for the protection of any assets that you wish to pass along to your children. Rather than giving your grandmother’s ring to your son upon your death, you can dictate that the ring goes to him upon his 25th birthday, or upon him getting engaged. Rather than your vacation cottage going to your children when you die, your trustee can rent or otherwise leverage the cottage for income until your children are old enough to be trusted with the asset.
Every estate plan is different because no two parents want to raise their children the same way. However, the most important thing to remember is that with proper planning, even life’s worst case scenario cannot stop you from protecting your children and making a positive influence on their future.
No matter how deep your hole of debt, you want to keep bankruptcy as a last resort.
If there’s a way out of debt that doesn’t involve a trip to a bankruptcy lawyer, that’s what you want to do.
After all, bankruptcy costs money and takes time. You have to give up all sorts of financial information, and it doesn’t cover all types of debt.
Most important, bankruptcy is a tool you can’t use all the time. Better to save your best option for last.
Most of my job as a bankruptcy lawyer is to help my clients understand that I’m the last stop on the train, not the first. Consultations usually involve laying out all the options and then looking at which one is the best.
If filing for bankruptcy is the right way to go, I can usually help. But here are some of the other choices you should look at first.
Debt Consolidation
Debt consolidation involves taking out a new loan to pay off the other ones. If you qualify for new financing at a better rate than the existing debts, it may make sense.
Unfortunately, most of the people who meet with me are already past due on their debts and so don’t qualify for a new loan. Still, it’s worth it for you to try as a way to get out of debt.
I’m not talking about taking out a pension loan to pay off your old debts. That’s nothing more than borrowing from your future to pay for your past, and it’s a bad idea. Leave the pension money where it is.
You should also think twice before taking out a second mortgage as a consolidation loan. If you’re unable to pay the second mortgage then the lender can take your home.
Debt Management Plans
There are companies that will take all your debts, negotiate new payments with the lenders, and pay them on your behalf. You make one monthly payment, and the debt management company divides the funds among the creditors.
If you’re working with a debt management company it’s important to put all your bills into the plan. Keeping even one credit card out of the plan means that you’ll be responsible for making payments to two companies. Keeping a card outside the plan also means there’s a chance that you end up over your head in debt to that creditor as well.
One problem with debt management companies is that they usually deal with credit card debt only. If you’ve got tax debts, student loans or other bills then you may not be able to handle all your debts using one of these companies.
Debt Settlement
You can usually settle your credit card debt once you’ve been in default for awhile. Depending on how far behind you are, you may be able to get a huge discount off the balance due.
Debt buyers snap up past due accounts for pennies on the dollar. They’re often more willing to give you a break on the balance due so long as they make a profit off their investment.
Debt settlement isn’t for everyone, though. If you owe money to more than one company then there’s a chance you can’t settle all your debts. That may leave you with more debt and no solution for repayment.
There are also possible tax consequences when you settle a debt. You may have to pay income taxes on the part of the debt that’s forgiven, so talk with your tax professional before you settle any account.
Walk Away From Your Debts
You may decide to ignore your debts and hope they go away. This may be a good idea if you aren’t working, don’t have any assets, or just can’t pay the debts.
Your creditors have only a limited amount of time to file a lawsuit against you to collect the debt. Some creditors may decide it’s not worth it to sue you, and others may wait too long.
For those creditors that decide to sue you, you can defend the lawsuit or settle the debt at that time.
Your credit score will suffer if you don’t pay your debts, but if you don’t need to buy anything on credit then it may not matter to you. The bad accounts will fall off sooner or later, and you can start to rebuild when that happens.
If you owe money for taxes or federal student loans then this strategy won’t work for you. There’s no statute of limitations for federal debts, so the government can collect forever.
In the end, how you choose to get out of debt comes down to simple arithmetic. Look at your income, your assets, and your debts. Review your options and see which one works for you.
Once you’ve had the chance to look at your choices, you may decide that bankruptcy makes sense for you. Take the time to make an informed decision so you can be confident that you choose the right path.
The post Get Rid Of Your Debt Once And For All (Without Bankruptcy) appeared first on Bankruptcy and Student Loan Lawyers - 866.787.8078.
When individuals are in financial distress and need relief they should look at all their options and choose the solution that will help them get back on their feet the fastest. While bankruptcy is the right option for many of my clients, some individuals come to me with too little debt to file for bankruptcy. Others come to me clearly in a financial crisis, but with too much income to qualify for a “good deal” when filing for bankruptcy relief. For many of these individuals the best solution is debt negotiation.
Debt negotiation is a tool used to resolve your debt by paying the creditor some portion of what you owe them less than the full balance. The amount that a creditor is willing to take during a negotiation is often very fact specific. If an individual has very little income, very few assets and can prove that the creditor is unlikely to get the money outside of a negotiation, then the creditor is likely to take far less. If the individual has a large income, a number of unsecured assets and the creditor knows they can simply go after the creditor in court and get payment in full, then the creditor will expect substantially more. For this reason, the amount of information given to a creditor should be strategically controlled by an experienced attorney. That doesn’t mean that the creditor should be mislead. Just to the contrary. ALL OF THE INFORMATION GIVEN TO A CREDITOR DURING NEGOTIATION SHOULD BE TRUE. I cannot emphasis this enough. The worst thing that could happen to a debtor would be to negotiate a good deal, only to face felony fraud charges for lying.
However, while neither a debtor nor their attorney should lie or mislead, they can choose not to be transparent. In a case where the individual has a large number of assets, the attorney can stall the turn over of information and simply negotiate without financials. While this isn’t going to result in a great deal, it will result in a substantially better deal than if the creditor knows that payment in full is an easy option.
Another factor in a successful debt negotiation involves the payment of a lump sum toward settlement. Remember, a promise was already made to pay this debt. A new promise to pay for a reduced amount doesn’t have a huge draw for creditors if it comes with small payments over a long period of time. However, if you are able to offer a large lump sum toward payment of the debt, then the creditor’s interest is likely to be peaked. In fact, the best deals I have been able to negotiate in my career have involved a single lump sum payment. These deals can range as much as 60-85% off the total debt. If the creditor is offered a smaller lump sum with future payments, the debtor should expect a smaller discount, often between 40-60% off the total debt. If a creditor is offered a simple payment plan with no lump sum at all, the discount is likely to be very small, sometimes as low as 10-15% off the total debt.
The bottom line is, in the right circumstances, debt negotiation can be an excellent tool. However, experience can be critical in shaping, offering and negotiating a final deal that garners the maximum benefit for the individuals facing financial distress. If you find yourself unable to pay your bills, be sure that you seek help from an individual that offers a full tool box of financial solutions.
For those bankruptcy practitioners that also file Fair Debt Collection Practice Act claims, the general practice for the Chapter 13 bankruptcy practitioners is to review proof of claims at some point past the claims bar date and then object to proofs of claims for debt that is not enforceable under state law. Upon disallowance pursuant to the statute of limitations, the practitioner would schedule the FDCPA claim on schedule B, and cause a FDCPA case to be filed in District Court. Some pundits have stated that the filing of a proof of claim is itself not subject to the FDCPA. However, the Seventh Circuit’s approach examines whether the FDCPA claim raises a direct conflict with the Bankruptcy Code, or whether both the Bankruptcy Code and the FDCPA can be enforced against the debt collector. McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1020 (7th Cir.2014). This seems to be an uptrending authority. Recently the Sixth Circuit rule upon communications from debt collectors to debtors that offered to settle debt but omitted the fact the debt was unenforceable. Buchanan v. Northland Group, Inc., No. 13-2523 (6th Cir., Jan. 13, 2015). The court also noted that “[a] misrepresentation about the limitations period amounts to a ’straightforward’ violation of [the FDCPA],” citing the Seventh Circuit Court of Appeals decision in McMahon v. LVNV Funding, LLC, 744 F.3d 1010, 1020 (7th Cir.2014).
Under § 1692e(5) of the FDCPA, a debt collector violates the FDCPA by threatening “to take any action that cannot legally be taken or that is not intended to be taken.” The presentment of a proof of claim for a stale dated debt in a bankruptcy or an offer of a settlement (without disclosure that the debt was not enforceable to mitigate an implied threat of litigation) of the same violates the FDCPA under the rationale of these cases.
However, a parallel approach was recently suggested in the Bankruptcy Court for the Northern District of Indiana which dealt with stale dated claims under Rule 9011. In Re Sekema, 14-40145 (January 7, 2015). Like the practice above, the practitioner objected to the stale dated claims on the basis of being violative of the Indiana six year statute of limitations. The Court sustained the objection to the proofs of claim. However the court issued a Show Cause Order on its own initiative (“By filing that claim, it appears that [creditors] violated Rule 9011(b)(2) of the Federal Rules of Bankruptcy Procedure because the claim was not warranted by existing law or a non-frivolous argument for its extension and a reasonable pre-filing inquiry would have revealed that lack of merit. See In re Excello Press, Inc., 967 F.2d 1109, 1112-13 (7th Cir. 1992) (Rule 11 requires the filer to investigate any obvious affirmative defenses)”). After consideration, the Sekema court awarded sanctions of $1000 for no-showing a show-cause hearing to explain why filing a time-barred claim did not violate Rule 9011. The sanctions were set using an express reference to the Fair Debt Collection Practices Act.
Steven P. Taylor: www.bankruptcyoffice.net
Filed under: Bankruptcy, Chapter 13 Bankruptcy Tagged: Chapter 13 Bankruptcy, FDCPA, Indianapolis Bankruptcy Attonrey, Kokomo Bankruptcy, Proofs of Claim 
If you didn’t qualify for a Wisconsin bankruptcy in the past, that may change in the near future. On April 1, 2015, the Means Test limits to qualify for a Wisconsin bankruptcy will rise. For those of you unfamiliar with the Means Test, it is the test that determines whether you are able to file a Wisconsin Chapter 7 Bankruptcy and also whether you can shorten the length of your Wisconsin Chapter 13 Plan from 5 years to 3 years.
Means Test limits are based on data from the Internal Revenue Service which determines the mean average of income for Wisconsin. For a household of 1, the Means Test income limit has increased to $43,666. For a couple, the Means Test income limit has increased to $59,740. For a family of three, the Means Test income limit has increased to $69,600. For a family of four, the Means Test income limit has increased to $83,686. Many more individuals and families may now qualify for a Wisconsin Chapter 7 Bankruptcy under the new Means Test income limits. If you did not qualify for a Wisconsin Chapter 7 Bankruptcy in the past, you may wish to contact your Wisconsin bankruptcy attorney to see if you now qualify as of April 1, 2015.
The following chart displays the Means Test income limits for individuals and families in Wisconsin, including: Lake Geneva, Delavan, Elkhorn, Burlington, Mukwonago, East Troy, Walworth, Williams Bay, Twin Lakes, Genoa City, Salem, Union Grove, Pell Lake, Paddock Lake, Kenosha, and many other cities in Southeastern Wisconsin.
Wisconsin Census Median Income Effective 04/01/2015
Period
1 Person
2 People
3 People
4 People
5 People
6 People
7 People
8 People
Add’l
Year
$21,833
$29,870
$34,800
$41,843
$45,893
$49,943
$53,993
$58,043
$4,050
6 Months
$43,666
$59,740
$69,600
$83,686
$91,786
$99,886
$107,986
$116,086
$8,100
Month
$3,639
$4,978
$5,800
$6,974
$7,649
$8,324
$8,999
$9,674
$675
SemiMth
$1,819
$2,489
$2,900
$3,487
$3,824
$4,162
$4,499
$4,837
$338
BiWeek
$1,679
$2,298
$2,677
$3,219
$3,530
$3,842
$4,153
$4,465
$312
Week
$840
$1,149
$1,338
$1,609
$1,765
$1,921
$2,077
$2,232
$156
To see if you qualify for a Wisconsin Chapter 7 Bankruptcy under the new Means Test income limits, you are required to total your income over the last six calendar months. Then, take the average and annualize it (multiply by 12). This will give you your annual income. Next, compare your annual income figure to the Wisconsin median income in the Means Test income limit chart. If your monthly household income is less than the Wisconsin median income limit for a household of your size, then you are presumed eligible for a Wisconsin Chapter 7 Bankruptcy. Of course, there may be other factors that determine your eligibility, another timeframe when you are eligible, or other bankruptcy options that may be better for your situation.
It is also possible to qualify for a Wisconsin Chapter 7 Bankruptcy if your income is above the Means Test income limit. There may be certain deductions and factors to take into account. Always consult with your Wisconsin Bankruptcy Attorney.
Contact our Wisconsin Bankruptcy Attorney
If you have questions about the Means Test or Bankruptcy, please feel free to contact Wynn at Law, LLC. We offer a free bankruptcy consultation to answer all of your questions. Wynn at Law, LLC has offices located in Lake Geneva, Delavan, and Salem, Wisconsin. To schedule your free consultation, contact us today by phone at 262-725-0175 or by email via our bankruptcy website’s contact page.
Find out if you qualify for bankruptcy.
Click Here to Get a Free Bankruptcy Assessment
from Wynn at Law, LLC
.
It’s Free. It’s Easy.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
The Automatic Stay When a person files a chapter 7 or chapter 13 bankruptcy case, there is the immediate creation of the automatic stay. The automatic stay is the protection provided to the debtor which prohibits creditors from taking specific collection actions or other efforts to collect on a debt. Sometimes the notice of the+ Read More
The post Respect The Automatic Stay In Bankruptcy Or Else appeared first on David M. Siegel.
Planning on filing a Kenosha bankruptcy this year? Be sure not to miss your income tax return filing deadline of April 15th. Sending your income tax return late to the IRS can cause collateral damage to your Kenosha bankruptcy case.
The law regarding tax debts and bankruptcy states that recent income tax debts are not dischargeable in a Kenosha bankruptcy. However, old tax debts may be dischargeable. Of course, the tax debt must also qualify for discharge under the current Bankruptcy Code. Recently, the First, Fifth, and Tenth Court of Appeals ruled that a late filed tax return does not qualify as a “tax return” according to the language in the Federal Bankruptcy Code.
The recent rulings center on a statement included in the 2005 changes to the Bankruptcy Code. This new language reads that a tax return is defined as a tax filing that “satisfies the requirements of applicable non-bankruptcy law (including applicable filing requirements).” In plain English, tax returns filed by the IRS without cooperation from the debtor are not recognized as “tax returns”. This means any tax return not filed on time may not be dischargeable debt in either a Kenosha Chapter 7 Bankruptcy or a Kenosha Chapter 13 Bankruptcy if not paid in full.
Of course, there are several rules regarding the dischargeability of income tax in a Kenosha bankruptcy case. The Bankruptcy Code is very complicated and complex. You will need the assistance of a Kenosha bankruptcy attorney to assist you in discharging income tax debt. It is extremely important to remember not to miss your April 15th income tax return filing deadline, or face the fact that any tax owed may not be dischargeable.
Contact a Kenosha Bankruptcy Attorney
If you require the discharge of income tax debt through bankruptcy, contact our Kenosha bankruptcy attorney. Our Kenosha bankruptcy attorney can answer your questions, assist you throughout the process, and relieve the stress associated with bankruptcy. Wynn at Law, LLC offers free bankruptcy consultations and has offices located in Lake Geneva, Delavan, and Salem, Wisconsin. Contact our Kenosha bankruptcy office today by calling 262-725-0175 or by emailing us via our bankruptcy website’s contact page.
Find out if you qualify for bankruptcy.
Click Here to Get a Free Bankruptcy Assessment
from Wynn at Law, LLC
.
It’s Free. It’s Easy.
*The content and material on this web page is for informational purposes only and does not constitute legal advice.
On February 25, 2015, the Nebraska bankruptcy court issued a new student loan opinion that should lift the hopes of debtors overburdened by student loans. See In re DeLaet, Case #13-04032.
What is striking about this opinion is that the court granted a discharge of student loans to a relatively young debtor in good health. The facts of the case are as follows:
- The debtor is 28 years old and is in good physical health.
- The debtor had no dependents and was engaged to be married.
- She graduated from college in 2009 with a degree in Fine Arts and English.
- She owed $169,711 of student loans.
- $27,045 of her loans were Federal Student Loans and those loans were enrolled in an Income Based Repayment (“IBR”) plan with the Department of Education. None of the federal student loans were discharged.
- $142,66 of the loans were Private Student Loans (i.e., not guaranteed by the government).
- The debtor was unable to find work in her field of study and testified that she submitted hundreds of job applications.
- The debtor eventually found employment as a child welfare case worker earning $17.68 per hour.
- There were no gaps in the debtor’s employment history. She consistently held jobs even if it was outside her area of education and took part-time jobs earning minimum wage.
- The debtor did make payments on the private loans and sought out payment options with the private loan providers but eventually was unable to afford the payment.
- The private student loan providers told the debtor that she was “out of options” and simply had to earn more money.
- The debtor’s mother had co-signed her private loans.
- The debtor’s fiance was reluctant to marry until the student loan problem was resolved.
- The debtor sought discharge of her private loans under Bankruptcy Code section 523(a)(8).
A debtor seeking discharge of a student loan must prove that payment of the loan would impose an “undue hardship” on the debtor or the debtor’s family. The 8th Circuit Court of Appeals applies a “Totality of the Circumstances” test to determine if an undue hardship exists. Courts must examine the following factors when reviewing student loan cases:
- The debtor’s past, present, and reasonably reliable future financial resources.
- The debtor’s reasonable and necessary living expenses.
- Other relevant facts and circumstances
- The debtor has the burden of proving undue hardship by a preponderance of the evidence. The burden is rigorous.
- If the debtor’s reasonable future financial resources will sufficiently cover payment of the student loan debt – while still allowing for a minimal standard of living – then the debt should not be discharged.
Educ. Credit Mgmt. Corp. v. Jesperson (In re Jesperson), 571 F.3d 775, 779 (8th Cir. 2009) (citing Long v. Educ. Credit Mgmt. Corp. (In re Long), 322 F.3d 549, 554-55 (8th Cir. 2003).
A thorough review of the debtor’s monthly income and expenses revealed that she had $214 left after paying basic living expenses. She negotiated an Income Based Repayment plan with the Department of Education to pay $215 per month towards the $27,045 federal loan, leaving nothing left over to pay her private loans.
What is so striking and encouraging about this court ruling is how absolutely practical and realistic it is. Debtors are often denied their discharge application based on unrealistic expectations of what it costs to live in a modern era. For example, even though the creditor complained that the debtor spent $32 on internet, $93 on cell phones, $12 on recycling and $50 on miscellaneous expenses, the court balked at the suggestion that these expenses were unnecessary:
It is silly to suggest that Internet and cell phone expenses are not reasonable and necessary in this digital age. I find no fault with this category of expenses.
Student loan opinions are frequently characterized as being unrealistic and arbitrary. Courts often seem out of touch with the economic realities facing younger families, but this decision stands out for its realism:
Ultimately, this case boils down to the Defendants’ belief that, with time and a willingness to relocate, Ms. DeLaet might be able to find a better-paying job. Well, that might be true: given time and a willingness to relocate, she “might” be able to find a better-paying job – that is probably true of any employed person – but that is certainly not a reasonably reliable future financial resource. Also, what about the payments that are coming due in the meantime? The numbers are what they are – at this time, she does not have the net income to pay the loans owed to the Defendants. So, the debt just keeps getting larger and larger with default interest and capitalization and the Defendants can sue her to try to collect their debts.
Wow, we can judge cases by what is presently realistic, not by what “might” be true in the uncertain future. The numbers are what they are. Let’s talk about what is actually happening, not about what might happen if the debtor was somebody else.
This is an encouraging opinion. There is new hope for the honest but unfortunate debtor.
One of the major differences between various debt relief options is the approach taken to resolve the debt. The approach you take for debt resolution can impact everything from: The time it takes to resolve your debt situation; The impact to your Credit; The actions Creditors take to collect on the debt; The stress you […]
The post Debt Relief Blog Series: Determining Your Best Option. Part IV: Approach to Resolving the Debt appeared first on Acclaim Legal Services, PLLC.
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.