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When you file bankruptcy you will take what is called the Means Test. The test helps debtors learn if they qualify to file Chapter 7 bankruptcy. It reviews the financial background of the debtor to understand monthly expenses and income availability. The test reviews whether disposable income is available and whether it can be placed […]
David Siegel: Hello, welcome. My name is David Siegel. Thanks for joining me. Today were going to be talking about Chapter 7 bankruptcy. Once again, my co-host as always is Jesse Barrientes. Jesse, welcome to the show. Jesse Barrientes: Thank you, Dave. David Siegel: How are you doing today? Jesse Barrientes: Excellent, how about yourself? David Siegel: I’m doing+ Read MoreThe post What Is Chapter 7 Bankruptcy In A Nut Shell? appeared first on David M. Siegel.
Chapter 7 bankruptcy can be confusing for many people. There are different scenarios where Chapter 7 comes into play to change lives. In the latest Legal Action show, we discuss the basics of Chapter 7 and how it can be used. A partial transcription of the show is listed below. You can also view the+ Read MoreThe post What Is Chapter 7 Bankruptcy In A Nut Shell? appeared first on David M. Siegel.
When Can I Refile for Chapter 7 Bankruptcy?
A common question we hear is, “I have filed for bankruptcy before. When can I refile a chapter 7 bankruptcy case?”. The answer to this question -- for Fresno and the rest of California -- is the following:
11 USC Code section 727(a)(8) prohibits a debtor from filing repeated cases under Chapter 7 within eight (8) years of one another.
An example would be if a debtor filed for bankruptcy on April 1, 2006, the next time they can seek Chapter 7 protection is after April 1, 2014.
If 8 Years Has Not Elapsed, What Can I Do?
Other options exist than Chapter 7. One option is to choose Chapter 13 instead of Chapter 7. Chapter 13 can be filed within 24 months, which is 2 years, of a prior bankruptcy discharge. Since the creditors tend to be paid more in Chapter 13 bankruptcies, it is better for creditors to see a Chapter 13. Chapter 13 is often referred to as a “debt repayment bankruptcy.” The debtor allows his income over a period 36 to 60 months to be used to repay the debts.
A second option is to wait for the eighth anniversary date to file for Chapter 7. If your anniversary date for the last filing is fast approaching, we would generally encourage you to seriously consider this option. It is important to remember that garnishments and asset seizures cannot be stopped without a bankruptcy filing. Still you have some protections.
If you cannot make a decision based on this limited overview, please feel free to meet with me to to get more precise advice for your needs.
Lynn Y. Zoiopoulos, 58, a former Rockford physician, recently faced a federal grand jury on charges that include three counts of mail fraud and two counts of making false statements in a bankruptcy case. Ziopoulos is facing charges in relation to her bankruptcy filing in which she hid financial assets that included a financial estate […]
Student loans and tax returns go together.
The federal government originates all federal student loans. It also processes your tax return each year, handing out refund checks in cases of overpayment.
When you don’t pay your student loans and they go into default, your refund may be at risk.
Here’s what you need to know, and how to handle the situation.
Tax Refund Offset Program
Federal regulations allow the U.S. Department of Education to grant claims to the Department of the Treasury for collection of default student loans by offset against federal and/or state income tax refunds and any other payments authorized by law.
The Department can request the Treasury Department to offset and collect any defaulted federal student loan debt.
It’s important for you to understand that the offset process applies only to defaulted student loans, not to those that are being paid on time or those that are merely past due.
In order to be declared in default, you must typically be at least 270 days late on your federal student loan payments.
How You Find Out You’re Going To Lose Your Tax Refund
Federal law requires the Department to give you prior notice of the proposed offset. As part of that notice, you have a chance to review your loan records and object to the offset.
You have only 20 days from the date of the notice to request copies of your loan records, and 65 days from the date of the notice to request a review of the loan file.
To do so, you’re going to need to send a letter with your name, social security number, the loan information, a written objection to the debt, whether you are requesting a hearing in person or by telephone, and provide any documents which support your objection.
Losing Your Refund If You File Taxes Jointly
What if you owe money on defaulted student loans but your spouse doesn’t?
Federal tax refunds payable to joint filing couples are subject to offset, but you can get back the portion of the refund owed to your spouse. The procedure for doing so is by filing an injured spouse claim with the Internal Revenue Service.
If you haven’t already filed your federal income return and know you’re going to have a problem with a tax refund offset, attach IRS Form 8379 to your original return and be sure to write “injured spouse” in the upper left corner of the first page of the tax form. If, however, you’ve already filed your tax return then send the IRS Form 8379 separately.
Can You Get Your Tax Refund Back From The Government?
The only way you may be able to get back your tax refund after it’s been taken is to file for bankruptcy. But you’ve you a small window of time to do so, and it may or may not be worth it.
Under the bankruptcy laws, the trustee can recover money paid to a creditor within 90 days of the date on which the bankruptcy case is filed, so long as the amount paid is more than $600. If you can exempt the amount of the tax refund, however, you’re the one who can get back the money.
If your bankruptcy is filed under Chapter 13, then you can bring the preference lawsuit to get the money back even if you can’t exempt the refund.
Even if you can get back the money, you should talk with your lawyer about whether it makes sense to do so. The cost and time involved in getting back the money may not be worth it.
And if student loans are your only debt, bankruptcy may not provide you with any benefit other than getting back your refund.
Preventing Future Tax Refund Offsets
Once the wheels of a tax refund offset are in motion, it’s tough to stop it from continuing down the tracks unless you take action.
To prevent the loss of next year’s refund you’re going to need to work with the U.S. Department of Education to get onto a payment plan for your loans. For most people, that means rehabilitation of your federal student loan and getting into a plan such as income-based repayment.
Private Student Loans Are Different
The tax refund offset program applies only to federal student loans. If you’re worried about private student loans, your concern shouldn’t include your refunds.
In order for a private student loan company to take anything from you, they’re going to have to sue you in court just like any other creditor. Once the lender gets a judgment against you, your bank account may be frozen and a portion of your wages taken. Though the tax refund can be taken if it’s sitting in the bank account, the lender can’t simply ask the federal government to turn over your tax refund.
Be Proactive To Minimize The Damage
As you can tell, the government is going to take your tax refund only if you don’t do something about the federal student loans.
If you fall behind, get into a repayment plan to catch up.
If you go into default, look into rehabilitation or consolidation (or both).
And if it’s a private student loan, defend the case if you’re sued.
Do nothing, though, and you’re likely to wake up one day with a bad situation on your hands.
By Mary Ann Gorman
In a week that first saw fast food pizza chain, Sbarro, file Chapter 11 bankruptcy, the trend continues. Yesterday, toasted-sub chain Quizno's Subs filed for Chapter 11 as well.
The company says not to worry as they have a plan in place.
Quizno's Subs' CEO said in a statement, "The actions we are taking are intended to enable Quizno's to reduce our debt, execute a comprehensive plan to further enhance the customer experience, elevate the profile of the brand and help increase sales and profits for our franchise owners."
The restructuring is focused on a debt reduction plan that takes care of $400 million.
While Quizno's Subs is mainly a franchised chain, individual franchise owners ran into problems with the prices Quiznos was charging them for ingredients. Although many prices were eventually altered, it may not have been timely enough for some.
Included in the restructuring plan is a rebate program for franchise owners and new incentives for future franchisees.
With big competitors, such as Subway, Potbelly and Noodles and Company, Quizno's has fallen behind in the world of advertising and additional investments are planned to be made in that area as another part of the restructuring plan.
Over the past 4 or so years, Quizno's Subs has gone from approximately 5,000 operations to just about 2,000; therefore, profits have fallen accordingly and advertising has been affected as a result.
Besides investing more in advertising, Quizno's has introduced toasted pastas to their menu and gone back to their original practice of adding veggies to their sandwiches before toasting.
In many cases you can prevent eviction from moving forward if the landlord does not have a judgment for possession. In other words, if you receive an initial notice for eviction you may be able to file bankruptcy to stop the process from moving further. In some cases there may be exceptions to consider but […]
If you file bankruptcy you need to actively participate in their bankruptcy cases. It is ill advised to file bankruptcy and not complete bankruptcy documents, attend meeting of creditors and to ignore legal papers. Chances are high the bankruptcy case will be dismissed by the court. With the dismissal, the court's order that stops creditors from collecting money, or foreclosing on a house terminates.
Typically, must bankruptcy petitioners have nothing to be concerned because they have hired a competent professional to guide them through the process. However, there are some folks that hurry up and rush to file their case to stop a wage garnishment or foreclosure of a house. As a result of the rush, further paperwork needs to be completed. If it is not completed the court will dismiss the case.
Once the case is dismissed under these circumstances, the bankruptcy code provides that no individual may be a debtor within 180 days. (11 U.S.C. § 109(g)(2).) Like all rules, there some courts provide exceptions if no creditor would be harmed by the refiling of the bankruptcy case, or if a creditor acted in bad faith.
There is really no exception for the bankruptcy petition that decides he is going to not to play fairly. For example, are those debtors that file multiple chapter 13 bankruptcy cases to avoid property foreclosures. In re Rivera, 494 B.R. 101, 104 (B.A.P. 1st Cir. 2013), a debtor filed a second bankruptcy case right after he had his case voluntarily dismissed. He had the case dismissed because the Court issued an order allowing the bank to continue with the foreclosure because debtor did not make monthly payments. On the same day that he dismissed his first case, the debtor filed a new chapter 13 case to obtain a new order that prevented foreclosure. The bank obtained an order dismissing the second bankruptcy case.
In Rivera demonstrates that a debtor cannot circumvent an order granting a creditor relief from the automatic stay by dismissing his bankruptcy case and filing a new case. It is important for debtors to actively participate in their bankruptcy cases. Secured creditors will be able to prevent a debtor from dismissing his case in an attempt to continually frustrate the creditor’s legitimate attempts to foreclose on its collateral.
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