Blogs
Brandon Barber recently pled guilty to several charges including money laundering and bankruptcy fraud. He reportedly changed his plea to guilty from not guilty when appearing in court this week for a hearing. While other people were involved in what investigators are calling a real estate scheme, Barber plead guilty to one count of bankruptcy [...]
By ARDEN DALE
As offshore accounts draw greater scrutiny, some financial advisers are having their clients use a special trust as an alternative strategy to shield their assets from potential lawsuits.
So far, 15 states allow the creation of domestic asset protection trusts, which safeguard securities or other assets of the owner. In the past, they weren't widely used and few states allowed them.
One big driver of the trend is that offshore accounts--commonly used to ward off creditors--have grown less popular amid an ongoing Internal Revenue Service crackdown. The tax agency, which also contends the accounts help wealthy Americans evade taxes, has beefed up reporting requirements as well as penalties for violators.
Increasingly, some advisers are having more discussions about domestic asset protection trusts as a matter of course with any client who owns a business, works in a high-risk profession like medicine, or worries that a child may wind up in a divorce.
"We have been seeing a lot more of them," said Edward J. Mooney, managing director of BNY Mellon Wealth Management.
Recently, Mr. Mooney raised the matter with a client who owns a shipping construction business in the energy sector. A boom in the fracking business, which carries the risk of liability over environmental damage, has prompted more use of the trusts, the adviser said.
Anyone who wants to set up a domestic asset protection trust has to be prepared to work with a trustee in the state where the irrevocable trust is established. A client in Illinois, for example, can't set one up in his home state. So an adviser can help find the best state, and work to find a good trustee--usually a corporate trustee--to manage the trust there.
Alaska, Delaware, Nevada, and South Dakota were early adopters of the trusts, and have been the most popular locations to site them.
Illinois adviser Michael C. Foltz has been working with a client who is thinking about selling his electronic parts manufacturing business, but wants to keep his estate from having to pay state estate taxes on the proceeds. Mr. Foltz suggested a trust in a state with no state estate or income tax. He also broached the idea of setting up the trust to protect its contents from future creditors.
"First and foremost, the estate planner is trying to find ways to reduce or eliminate estate tax, and if they can layer creditor protection on top of that, so much the better," said Mr. Foltz, a wealth manager at Balasa Dinverno Foltz LLC in Itasca, Ill., with about $2.1 billion under management.
Robert J. Robes, an estate attorney with Greenberg Traurig in Boca Raton, Fla., said a domestic asset protection trust won't work for someone who sets it up in the face of an impending lawsuit. Instead, it must be in place well in advance of any litigation.
"Be as proactive as you can," Mr. Robes said. "Oftentimes clients react to potential liability when something is starting to bubble up, which is too late."
And don't put assets into the trust that are needed for the family to live on. Instead, think of it as a way to protect a nest egg, he said.
Copyright 2013 Dow Jones & Company, Inc. All rights reserved.
Before paying off your debts by taking out student loans, consider the consequences.
Ever take out a federal student loan and think to yourself, “Hey – I should take out a little extra and pay off my credit cards!”
How did that work out for you?
It’s a smart move to get an education, especially in this hyper-competitive world.
And it’s easy to get federal student loan money to ease the burden.
But before you pay off your credit cards with federal student loan money, consider this.
Federal Student Loans Are Cheap Money
When you take out federal student loans, the interest rate is pretty low. Far lower than most credit cards, at least.
The money’s plentiful, too. In fact, you can take out up to $45,000 in federal student loans for a four-year undergraduate program if you’re classified as independent (or if you’re a dependent and your parents can’t qualify for PLUS Loans).
What’s more, you can deduct from your taxes a portion of the interest you pay each year.
Sounds like a winner at first blush.
It’s tempting to use that money to pay off your car or credit cards.
But The Interest Is A Silent Killer
Once you complete your education, it’s time to start making payments on your student loans.
Though you’ve saved credit card finance charges while you were in school, your loans have been quietly accruing interest the whole time.
Subsidized loans have the benefit of the government paying the interest while you’re in school, but not the unsubsidized ones. Those loans accrue interest from the minute you cash the check, and the amount due once school’s done can be significant.
There’s No Way Out
Not that you’re expecting to file for bankruptcy, but if you run into financial problems you won’t be able to get out from under those student loans easily.
So long as those debts remain owed to the credit card companies, they can be wiped out in a Chapter 7 bankruptcy case.
Why swap out an easier solution for one that’s more difficult?
Don’t Fall For It
Yes, the money’s easy. The interest rate is low, the payments can go out to 25 years or more, and you can deduct the interest expenses.
Still, you’re more likely to be saddled with those student loans without a way out if you need it.
This is one good deal that’s too good to be true, I think.
Image credit: marcoPapale.com
Why Using Student Loans To Pay Off Debts Is A Horrible Idea was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Debtors exploring the option of filing Chapter 7 bankruptcy on their own without an attorney, (pro se) may be in for a few surprises if they do not know what they are getting themselves into. While it is true you have the option to file on your own, it is often not advised for debtors [...]
When your bankruptcy trustee files a notice of abandonment, it’s time to celebrate.
When you file for bankruptcy, something called an estate is created.
In other words, everything you own is no longer yours. The bankruptcy trustee has total control over everything.
Everything, that is, unless the property interests you exempt.
Property that can’t be exempted, however, is no longer yours to do with as you see fit.
Unless …
The Trustee Must Abandon The Property
The Chapter 7 bankruptcy trustee can look at property and decide that it’s not worth it. Selling the property won’t yield enough money for creditors, or it’s simply too much hassle.
If that happens, the trustee will abandon the property. Once that happens, it’s all yours again and you can do anything you want.
Two Ways For Property To Be Abandoned
Most people wait for the trustee to abandon the property, especially if there’s no pressing urgency. After all a Chapter 7 case takes only a few months to wind through the court system.
If you need to move things forward more quickly – for example, if there’s a house and you want to sell it without the court’s involvement – then you will need to make a motion for force the trustee to abandon the property.
How The Trustee Decides To Abandon – Or Not
The trustee’s job in a Chapter 7 bankruptcy is to take all of your property (except whatever you can exempt), sell it, and distribute the proceeds to your creditors.
However, the law gives the trustee an out – if the property is burdensome to the estate or is of inconsequential value and benefit to the estate, then the property can be abandoned.
When you look at the value and benefit, you’re looking at the amount of money that’s going to result when the sale occurs. There are costs to selling something in a bankruptcy case: storage; auctioneers; transfer fees, and the like.
If someone’s going to be sold and not result in any money for the creditors, then it’s not worth it.
How Long Does The Trustee Have To Abandon Property?
The trustee can hold onto property until the bankruptcy case is closed – which may well be after the discharge occurs.
If the case is closed, the property is automatically considered to have been abandoned.
Will It Be Sold, Or Left For You?
That’s a tricky question, and one that I deal with all the time. Part of what I do with people like you is sit down, figure out the numbers, and make an educated guess based on the state of affairs in the court.
That changes from time to time, depending on how “hungry” the trustees are as well as on the rest of your situation.
Don’t panic, though; we’ll work it out together, map out a game plan, and move ahead with the best possible information.
Image credit: Roadsidepictures
The Rules Of Abandonment Of Property In Chapter 7 Bankruptcy was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Dragnet clauses are agreements in lending documents that the collateral will secure in addition to the involved debt, other pre-existing and after after acquired debt.
Some courts in Florida have held that "dragnet clauses" are generally enforceable so long as the language of the clause is clear and unambiguous as to the parties intent to secure pre-existing and after acquired debt. Robert C. Roy Agency, Inc. v. Sun First National Bank of Palm Beach, 468 So.2d 399 (Fla. 4th DCA 1985). But the 4th District Court of Appeals has held that the dragnet clause would not be enforced against someone other than the borrower unless it specifically includes within its terms or unless it can be shown that the third party otherwise had notice that the specific pre-existing debt was to be included within the grasp of the dragnet clause. Starlines International Corp. v. Union Planters Bank, N.A., 976 So. 2d 1172 (2008).
Other Florida courts though hold that dragnet clauses are unenforceable to secure pre-existing debt unless the pre-existing debt is specifically identified in the dragnet clause of the mortgage and possibly also in the note. United National Bank v. Tellam, 644 So. 2d 97 (Fla. 3d DCA 1994).Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
My current office is located in the heart of the city of Alhambra, California so that I can easily service all clients in the San Gabriel Valley and beyond. The city of Pasadena, California is no different. Oftentimes, Pasadena clients don’t believe or realize just how close the city of Alhambra really is. A Google maps search indicates it’s merely a 13 minute drive of 5 miles, more or less.
My Pasadena-based clients are often quite happy to know that I can assist them with their bankruptcy case and that Alhambra merely minutes away from them. So if you are in the city of Pasadena or close by, and you need a bankruptcy attorney who really cares and who will personally handle your bankruptcy, do not hesitate to give me a call at 626-999-5959.
My current office is located in the heart of the city of Alhambra, California so that I can easily service all clients in the San Gabriel Valley and beyond. The city of Pasadena, California is no different. Oftentimes, Pasadena clients don’t believe or realize just how close the city of Alhambra really is. A Google maps search indicates it’s merely a 13 minute drive of 5 miles, more or less.
My Pasadena-based clients are often quite happy to know that I can assist them with their bankruptcy case and that Alhambra merely minutes away from them. So if you are in the city of Pasadena or close by, and you need a bankruptcy attorney who really cares and who will personally handle your bankruptcy, do not hesitate to give me a call at 626-999-5959.
If you’re seeking an alternative option in helping you get caught up on mortgage payments, Chapter 13 bankruptcy may be a helpful solution. The plan can help you make missed payments to cure the default with your mortgage. This option has helped a large number of homeowners avoid foreclosure, while making affordable payments. Chapter 13 [...]
So if you are a tenant renting an apartment, house, condo, or whatever may represent your residence, and you find yourself late on renting or unable to fulfill the lease agreement, be prepared to find yourself facing an eviction, otherwise known as an unlawful detainer action.
11 USC 362(b)(2)) says that the automatic stay doesn’t apply to tenants who file bankruptcy where the landlord already has obtained a judgment for possession prepetition. That means if a tenant, who lost an unlawful detainer action, files a last second bankruptcy to stall the sheriff from booting him out, the automatic stay doesn’t apply to stop or delay the sheriff from doing so.
Furthermore, 11 USC 362(l)(5)(A) requires a debtor tenant certify on the bankruptcy petition that the landlord holds a prepetition judgment of eviction. The reasons are clear: Congress determined it wanted clear rules in place so that the automatic stay pursuant to 362 of the BK Code could not be abused by evicted tenants trying to delay the inevitable where there was no longer a legal right to possession with respect to the property.
11 USC 362(l)(1) indicates that the provisions of 362(b)(22) will be upheld after 30 days from the date of filing where the lessor certifies that the debtor has a right to cure under nonbankruptcy law and that the debtor deposited with the clerk of the court, any rent due during the 0 day period after the BK filing.
Regardless, it’s clear that a tenant who files bankruptcy to delay an eviction could be subject to certain risks in ignoring the fundamental provisions of the bankruptcy code. Both landlords and tenants need to understand these basic principles inherent in the bankruptcy code so that all parties play fair if the bankruptcy process is involved.
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.