Blogs
Acclaim Legal Services Open’s Sixth Michigan Office Location in Downtown Detroit! Since our firm was founded in 2003, we have continued to grow our debt relief practice. We are excited to expand further to downtown Detroit, with a new office space conveniently located in the United State Bankruptcy Court building at: 211 West Fort Street Suite […]
The post Detroit Bankruptcy Attorneys Make it Official with a New Downtown Office Location appeared first on Acclaim Legal Services, PLLC.
This is the bankruptcy case study for E.A. from Montgomery, Kendall County, Illinois. He is here to see whether chapter 13 bankruptcy will provide debt relief for him. Let’s look at the facts of his case: he is currently a homeowner with a market value of $149,000. (www.zillow.com)He has two outstanding loans on the property.+ Read More
The post Bankruptcy Case Study-Chapter 13: Get Current On Mortgage appeared first on David M. Siegel.
I have had bankruptcy clients who have been overly concerned with their credit score before, during, and after they have filed for bankruptcy. The credit industry, including the credit bureaus and the credit protectors, have done a great job of marketing to Americans the importance of having a good credit score. What they fail to+ Read More
The post There Is Way Too Much Emphasis On A Credit Score appeared first on David M. Siegel.
“With Great Risk Comes Great Reward” – T. Jefferson
In order to succeed as a business person in this country individuals have to be willing to take a risk. They put their heart, soles and wallets on the line. However, not every business can succeed. Even among those businesses that do succeed, there are often major hiccups in the owners personal finances along the way. When a business owner files for personal bankruptcy they face special headaches that non-business owners don’t face.
Pay Stubs
When an employee of a company files personal bankruptcy, the trustee requests pay stubs, bank statements, tax returns and other financial documents. These documents are usually pretty straight forward with the information the trustee is seeking right there for all to see. However, business owners don’t typically receive pay stubs. Even if a business owner chooses to receive a regular paycheck, the stubs are not telling the whole story. They may also receive bonuses, profit sharing or simply draws that may not appear on the owners pay checks. The owner’s income is often a complicated target that is hard to find and even more difficult to explain to a trustee who may never have run a business of their own.
Valuation
The value of a business is a moving target that is very difficult to nail down. Assets, debts, income, depreciation all play into the amount that the business could sell for on the open market. While the target is moving and difficult to determine, it is also potentially very important to the outcome of a business owners personal bankruptcy. In a Chapter 7 bankruptcy the valuation of the business could determine whether or not the business owner is entitled to keep their business after filing. In a Chapter 13 bankruptcy the valuation of the business is used to determine how much of the debtor’s unsecured debt must be repaid. To make matters worse, neither your judge nor your bankruptcy trustee has any special training when it comes to business valuations. Therefore, it is important to be well prepared so that your business valuation prevails.
Loans
It would be great as a business owner to have a company so steady that each month’s income was equal to or greater than the last. However, as all business owners know, business is generally a series of ebbs and flows. One month you are on top of the world and the next you are dead in the water. Seasonal changes, road construction, economic slow downs and a plethora of other complications cause businesses head aches. Often times business owners turn to small business loans, credit cards or other lines of credit to get through the slow months. However, most of these sources of credit require that the business owner personally guarantee the loan. When a business owner is in bankruptcy they are not allowed to take out most loans without court approval. This makes pre-bankruptcy planning especially important for business owners.
Personal Guarantee
Most businesses are run by their owners as separate entities. They may be a corporation, a LLC, a PLLC or one of many other various forms of entities. However, because they are run as separate entities, these businesses are liable on the debts that they take out. While the business owner is able to discharge their personal liability in bankruptcy, they cannot discharge the debts owed by the business itself. This means that despite the bankruptcy, the owner will have to repay most business debts if they wish to continue operating the business.
These are just a few of the many problems that business owners face when they file for personal bankruptcy. That is why it is imperative that business owners seek help from an attorney that has intimate knowledge of both bankruptcy rules and procedures as well as basic business practices.
Second Chance Legal Services offers free initial consultations. Please call us at (248) 629-6367 to schedule your consultation today.
Here at Shenwick & Associates, many of our more challenging personal bankruptcy cases involves past due tax debts. We've previously written about the complex rules involving the dischargeability of taxes hereand here.
This month we want to discuss the concept of "tolling." There are several types of events that serve to stop the clock on various time periods that determine when an income tax becomes dischargeable:
- A prior bankruptcy case. The filing of a bankruptcy case will toll both the rule that a tax must be more than three years past its due date to be dischargeable in bankruptcy (the "3 year rule") and the rule that a tax must have been assessed for more than 240 days to be dischargeable in bankruptcy (the "240 day rule")
- An request for a due process hearing or an appeal of a collection action taken against a debtor. The same rules apply.
- An offer in compromise. We recently wrote about offers in compromise, which are offers to compromise (or settle) a tax debt for less than the full amount due. The submission of an offer in compromise will toll the 240 day rule. If the taxpayer makes an offer in compromise within 240 days of filing for bankruptcy, the 240 day time rule will be suspended for the time during which the offer in compromise is pending, plus an additional 30 days.
- Tax litigation. Litigation with taxing authorities in U.S. Tax Court or other venues will toll both the 3 year rule and the 240 day rule.
- A request for an extension of time to file a tax return. Filing for an extension will: (a) delay the start of the 3 year rule to the extended due date; (b) delay the start of the rule that a tax is not dischargeable in bankruptcy until more than two years from the filing date (the "2 year rule") until the actual filing date; and (c) delay the start of the 240 day rule until the tax is actually assessed.
To get an idea of how your past due tax debts might be handled in bankruptcy, please contact Jim Shenwick.
Sometimes you’ve got a question you need answered before you make the decision to hire a lawyer.
Questions such as:
- Can I transfer property out of my name to protect it from a bankruptcy filing?
- Can I get a mortgage after filing bankruptcy?
- Can a school withhold my transcripts for not paying a student loan?
- Is it a good idea to have my parents co-sign for my student loans?
- How do I stop a debt collector from calling me?
- How long does negative information remain on my credit report?
It used to be that you had two choices when you needed those questions answered – you could sit on the Internet all day trying to figure out which website had the right answer, or you could drag yourself into a lawyer’s office and waste a few hours of your time.
I’m happy to tell you that you now have a third choice – Money Go Roundtable.
Money Go Roundtable is a podcast that I cohost with my friend and colleague Gene Melchionne. Each work day we choose a question like the ones above (in fact, we answer those exact questions on the show) in ten minutes.
It’s free to subscribe, free to listen, and free to ask your general question. Just click the button to subscribe in iTunes.
If you’ve got a general question just hop onto Twitter and ask it using the hashtag #mgrpod. Don’t ask specific questions about your case, and remember that we’re not giving legal advice – just general information to help you get a better understanding of the world of debt, credit, bankruptcy and student loans.
Gene and I are having a lot of fun doing the shows, and our goal is to give you as much knowledge as possible. I hope to see you there soon.
The following is from the Consumer Financial Protection Bureau: Banks to Pay $35.7 Million After Loan Officers Illegally Traded Referrals for Cash and Marketing Services
The Consumer Financial Protection Bureau (CFPB) and the Maryland Attorney General took action against Wells Fargo and JPMorgan Chase for an illegal marketing-services-kickback scheme they participated in with Genuine Title, a now-defunct title company. The Bureau and Maryland also took action against former Wells Fargo employee Todd Cohen and his wife, Elaine Oliphant Cohen, for their involvement. Genuine Title gave the banks’ loan officers cash, marketing materials, and consumer information in exchange for business referrals. The proposed consent orders, filed in federal court, would require $24 million in civil penalties from Wells Fargo, $600,000 in civil penalties from JPMorgan Chase, and $11.1 million in redress to consumers whose loans were involved in this scheme. Cohen and Oliphant Cohen also will pay a $30,000 penalty.
“Today we took action against two of the nation’s largest banks, Wells Fargo and JPMorgan Chase, for illegal mortgage kickbacks,” said CFPB Director Richard Cordray. “These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly. Our action today to address these practices should serve as a warning for all those in the mortgage market.”
“Homeowners were steered toward this title company, not because they were the best or most affordable, but because they were providing kickbacks to loan officers who referred consumers to them,” said Maryland Attorney General Brian Frosh. “This type of quid pro quo arrangement is illegal, and it’s unfair to other businesses that play by the rules.”
Copies of the proposed consent orders filed in federal court and of the Bureau’s administrative consent orders will be available later today.
The post CFPB Takes Action Against Wells Fargo and Chase for Illegal Mortgage Kickbacks appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
When you hear “meeting of creditors,” you might imagine yourself having to face a room of people representing the banks and credit card companies. The reality is that the meeting of creditors is used by the trustee to ask you questions about your financial situation. These questions and your answers will help him or her carry out the responsibilities of the trustee. Creditors will rarely show up at this meeting. Bankruptcy judges are not allowed to attend the meeting of creditors.The post Chapter 7 Bankruptcy Basics: Part Two appeared first on Tucson Bankruptcy Attorney.
When you hear “meeting of creditors,” you might imagine yourself having to face a room of people representing the banks and credit card companies. The reality is that the meeting of creditors is used by the trustee to ask you questions about your financial situation. These questions and your answers will help him or her carry out the responsibilities of the trustee. Creditors will rarely show up at this meeting. Bankruptcy judges are not allowed to attend the meeting of creditors.
The post Chapter 7 Bankruptcy Basics: Part Two appeared first on Tucson Bankruptcy Attorney.
This is the second installment in our 5-part series exploring the implications of various debt resolution options. One of the biggest concerns about managing debt or trying to negotiate with creditors is unexpected creditor actions, such as: • Judgments; • IRS Levy; • Garnishment; • Or even just constant threats or harassing calls. What […]
The post Debt Relief Blog Series: Determining Your Best Option. Part II: Legal Protection 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.