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Do You Get This Blog On Google Reader? Subscribe By Email Instead! 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.
Here’s an email I got on Friday, March 15 2013.
I started the bankruptcy process with your office in 03/2012 and stopped the process. That was a wrong decision!!! My house is scheduled for foreclosure on Monday 03/18/13 and I have tried working with Wells Fargo to postpone the sale. NACA and Senator Mark Warner’s office also joined me to work with Wells Fargo but they are slow to give me a decision. Can you help me stop the foreclosure?
That is an easy problem to fix, but not so easy on a Friday afternoon, before a Monday foreclosure. I do emergency bankruptcies when I’m able to, but that Friday I was already booked up.
Bankruptcy should be a last resort. But it should NOT be an emergency. We offer a two part, two hour free consultation. But if you wait until Friday before a Monday foreclosure, bankruptcy lawyer Brian Madden may be able to help you.
Fortunately, I was able to direct Tom (not his real name) to Brian Madden, an experienced bankruptcy lawyer here in Northern Virginia. Brian takes phone calls until 11:00 PM most weekdays and most of the day on Saturday, too. He specializes in emergency bankruptcies.
Tom told me Brian Madden was able to help.
Bankruptcy is a last resort, but it should not be a last minute emergency. It is easy to make mistakes under the bankruptcy law, which was designed by the banks in 2005 to make things hard and trip you up.
That’s why I ask people to fill in my complete forms and take the time to go through our two part, two hour free consultation. So we can work out exactly what bankruptcy will do for you, in your specific situation. Taking the time to do it right is one reason my client reviews are so strong.
But if you wait until Friday afternoon, before a Monday foreclosure, you can usually get Brian Madden on the phone and he will try to help you.
(I do take emergency bankrutpcy when I can, and when there’s no choice. I helped a guy last fall who was working temporarily in Boston. He drove down to see me Tuesday with a Wednesday morning foreclosure. He missed his Tuesday morning appointment because of traffic, and I was booked the rest of the day. So he came back Tuesday evening at 7:30. We got it done before 10:00 PM. We made some small mistakes because we were rushing, but got the job done and saved his house. That’s not the best way to do it.)
Here’s an email I got on Friday, March 15 2013. I started the bankruptcy process with your office in 03/2012 and stopped the process. That was a wrong decision!!! My house is scheduled for foreclosure on Monday 03/18/13 and I have tried working with Wells Fargo to postpone the sale. NACA and Senator Mark Warner’s [...]The post Emergency bankruptcy filing in Northern Virginia appeared first on Robert Weed.
It is broadly accepted by most non-bankruptcy practitioners that bankruptcy lawyers are “a different breed,” and (similarly) that Bankruptcy Court is a “whole other ballgame” compared with “normal” litigation in state and federal courts. Consequently, it is common for personal injury attorneys to feel especially edgy about representing bankrupt debtors during active Chapter 13 cases, given the cocoon of bankruptcy statutes and rules that appears to envelop debtors while they are “in” a bankruptcy.
While these concerns are well-founded, and the healthy respect such non-bankruptcy lawyers accord the bankruptcy process is entirely due, a savvy P.I. lawyer need not abandon all hope of obtaining a good result for a would-be client simply due to the existence of a pending Chapter 13 bankruptcy. In this blog, we attempt to break down some of the steps that are necessary for the non-bankruptcy attorney to survive his/her Adventures in Bankruptcyland using a personal injury claim as an example. Note: not all pre-petition claims are equal under the law – personal injury claims, for example, are specifically provided-for in the Bankruptcy Code.
The First Step
If the personal injury claim arose prior to filing the bankruptcy case, the debtor must disclose the claim in his or her bankruptcy schedules that pre-bankruptcy P.I. claim. Every debtor’s bankruptcy is commenced by the filing of a bankruptcy “Petition,” and the Bankruptcy Code also requires that the debtor promptly file “schedules” listing detailed information about the debtor’s financial situation. These schedules include lists of the debtor’s real and personal property, a list of the applicable property exemptions (i.e. the stuff they get to keep / stuff a bankruptcy trustee cannot claim under either state or federal law), information about the debtor’s monthly income and expenses, lists of the debtor’s creditors (secured, priority unsecured, general unsecured), various statistical summaries, and other information required by the Bankruptcy Code.
Every bankruptcy debtor must elect either the Federal or State (Texas) exemption scheme when they file their schedules, and these exemptions provide lists of items which are protected by law from the debtor’s creditors (and the Chapter 13 Trustee) in bankruptcy. By properly exempting the pre-petition claim (or as much of it as the applicable exemptions will allow), the debtor will get to personally keep the maximum amount of the settlement or judgment proceeds once the case settles or is reduced to judgment. Note: the Texas exemptions do not provide for exemptions on Personal Injury claims. However, the Federal Exemptions do provide an allowance for pre-petition personal injury claims, see, e.g. 11 U.S.C. 522(d)(11)(D). The Federal Exemptions also provide for a “wildcard” exemption amount, which is cumulative with the P.I. exemption, see, e.g. 522(d)(5). In total the Federal Exemptions could allow your client to keep more than $30,000 of the personal injury settlement proceeds. However, this amount will vary depending on the debtor’s specific circumstances.
The Debtor and his or her bankruptcy counsel also need from you a complete list of any creditors – anyone who could have a claim — against the debtor or the proceeds of the lawsuit, including any medical bills, for example. Is the claim secured by a statutory lien? Have you issued a letter of protection? Let the debtor’s bankruptcy attorney know, as this information will also have to be disclosed.
The Second Step
Then, you have to get employed by the Bankruptcy Court as the debtor’s personal injury attorney. This is something the debtor’s bankruptcy attorney can handle for you, or you can handle yourself. If you fail to get approved for employment in a timely manner, you may not be able to collect any of your fees.
If the case settles, you must get your settlement approved by the Bankruptcy Court. The approval process is not difficult, but it may include a little coordination with the debtor’s bankruptcy attorney and some communication with the Chapter 13 Bankruptcy Trustee. It may be wise to engage the services of an experienced consumer bankruptcy attorney to shepherd you through the process your first time around, rather than jumping right in without a lifeline.
If the case goes to a successful verdict and you are able to collect the entire judgment on the debtor’s behalf and are now ready to begin disbursing the proceeds, you should now go to bankruptcy court to obtain approval of any expected disbursements prior to making them. Note that general unsecured creditors of the debtor may or may not get paid anything from the proceeds of the settlement.
You also want court approval of your attorneys’ fees. This is usually simple if you had your fee agreement approved properly when the bankruptcy court approved your employment.
The Third Step
Finally, once the bankrupcy court approves any settlement and issues its order directing how the proceeds of the settlement or judgment are to be disbursed, you may disburse settlement funds as directed. It is not unusual for some portion of the settlement proceeds that would otherwise go to creditors or to the debtor to be instead disbursed to the Chapter 13 Trustee for distribution.
Bankruptcy can be someone complex and opaque, but an experienced debtor’s counsel can help a personal injury attorney navigate through the process to a successful outcome.
The post Navigating a Personal Injury Claim Through the Chapter 13 Bankruptcy Process appeared first on AKB.
At Shenwick & Associates, we often get questions from clients if they may transfer a house from one spouse to another after being sued or prior to a bankruptcy filing:An upstate bankruptcy court addressed this question and held that such a transfer could be a fraudulent conveyance and set aside. The name of the case was In re Tina M. Panepinto, 12-11230. U.S. Bankruptcy Court, Western District 12-11230In In re Tina M. Panepinto, a wife who was insolvent owned a wholly-exempt homestead (house) free-and-clear, and (without consideration) transferred her half ownership to her husband. The bankruptcy court held that an existing creditor could sustain an action to set that transfer aside as a fraudulent conveyance under New York State law. Records show that in 2008, with a bill collector seeking to collect a debt, Panepinto transferred half the ownership of her home to her husband. Four years later, she filed for bankruptcy. Creditors challenged the bankruptcy petition, seeking to set aside the transfer of real property as a fraudulent conveyance under New York Debtor and Creditor Law §273. The Bankruptcy Judge sustained the creditors challenge. The lesson is that a debtor, prior to transferring ownership in a residence should seek advice from an experienced bankruptcy attorney.
Most people have a negative association with the word bankruptcy. However, often what you heard is misleading and misinformed statements from people who are not well versed in bankruptcy law. Many very successful people and businesses have filed bankruptcy and have gone on to become very prosperous. Bankruptcy Will Ruin My Credit Generally, if you’re [...]The post Common Bankruptcy Myths appeared first on National Bankruptcy Forum.
Bankruptcy is designed as a way for an insolvent debtor, one who cannot pay his or her creditors, to get a fresh start. Depending on the type of bankruptcy involved--Chapter 7, Chapter 11, or Chapter 13 for example--among the main functions of a bankruptcy court are to liquidate assets, discharge certain debts, or confirm a payment plan for non-dischargeable debts.
It can also serve as a way to dispute taxes, as illustrated in a recent Virginia bankruptcy court decision . In Harris v. Commonwealth, the debtor and his wife filed for Chapter 7 bankruptcy.
In Chapter 7, also known as a liquidation bankruptcy, a trustee takes control of the "nonexempt" assets of the debtor's and reduces them to cash from which creditors will be paid. (Note that before the case is filed you and your attorney will know if there are any nonexempt assets, and can plan accordingly.) While certain unsecured debts are discharged under Chapter 7, certain types of debt, like child support and income taxes less than three years old, are not dischargeable.
Like almost all Chapter 7 cases, this case was determined to be a "no-asset case," where there were no assets available for liquidation or to pay creditors. All of the dischargeable debts that the debtor had were discharged and the only reason for the Chapter 7 action was to contest an income tax assessment. The assessment was for nearly $613,000, and was disputed by the debtor.
Tax courts have broad discretion to determine tax liabilities assessed before or after the debtor filed for bankruptcy. However, in "no asset" cases, where there are no assets to distribute, courts have usually abstained from deciding disputed tax matters. In these cases, the only avenue for debtors who have been assessed an incorrect amount of taxes is to pay the full amount of the taxes and subsequently sue for a refund in state court.
The Commonwealth argued that the bankruptcy courts should abstain from deciding the amount of tax a debtor owes in no asset cases since the decision will not affect the debtor-creditor relationship. However, the debtor argued that he would be severely prejudiced since he would be forced to pay well over half a million dollars BEFORE he could litigate the incorrect assessment in state court. Due to the enormity of the debt, the debtor argued that he would be unable to litigate and therefore would be denied the fresh start guaranteed by Chapter 7.
The debtor further argued that while he would be extremely prejudiced by having to pay the tax first and litigate in state court later, the Commonwealth would suffer no prejudice either way because, in the end, the Commonwealth will only get the correct amount of tax due. The debtor argued that all that his case required was a substantiation of the amount of gross revenue he received and then calculate the correct tax due, which would not be a complex matter and not take up too much of the bankruptcy court's time. This outcome would be the same in either bankruptcy or state court, but the procedure in state court would severely prejudice the debtor. In the end, the court agreed with the debtor and allowed the case to move forward in bankruptcy court.
What is interesting about this case is that it illustrates the possibility for other debtors in similar situations to litigate their tax matters in bankruptcy court. This can prove very beneficial to many people who are already considering bankruptcy and also want to clear up a tax matter but have not been able to get the government's attention to resolve it. It also may eliminate the requirement of having to pay a mistaken tax assessment and sue for a refund later. Since most people are filing for bankruptcy precisely because they cannot pay their bills, being able to litigate tax matters before actually having to pay an incorrect amount of tax may make a huge difference in getting the "fresh start" promised by bankruptcy.
Bankruptcy is designed as a way for an insolvent debtor, one who cannot pay his or her creditors, to get a fresh start. Depending on the type of bankruptcy involved--Chapter 7, Chapter 11, or Chapter 13 for example--among the main functions of a bankruptcy court are to liquidate assets, discharge certain debts, or confirm a payment plan for non-dischargeable debts.
It can also serve as a way to dispute taxes, as illustrated in a recent Virginia bankruptcy court decision . In Harris v. Commonwealth, the debtor and his wife filed for Chapter 7 bankruptcy.
In Chapter 7, also known as a liquidation bankruptcy, a trustee takes control of the "nonexempt" assets of the debtor's and reduces them to cash from which creditors will be paid. (Note that before the case is filed you and your attorney will know if there are any nonexempt assets, and can plan accordingly.) While certain unsecured debts are discharged under Chapter 7, certain types of debt, like child support and income taxes less than three years old, are not dischargeable.
Like almost all Chapter 7 cases, this case was determined to be a "no-asset case," where there were no assets available for liquidation or to pay creditors. All of the dischargeable debts that the debtor had were discharged and the only reason for the Chapter 7 action was to contest an income tax assessment. The assessment was for nearly $613,000, and was disputed by the debtor.
Tax courts have broad discretion to determine tax liabilities assessed before or after the debtor filed for bankruptcy. However, in "no asset" cases, where there are no assets to distribute, courts have usually abstained from deciding disputed tax matters. In these cases, the only avenue for debtors who have been assessed an incorrect amount of taxes is to pay the full amount of the taxes and subsequently sue for a refund in state court.
The Commonwealth argued that the bankruptcy courts should abstain from deciding the amount of tax a debtor owes in no asset cases since the decision will not affect the debtor-creditor relationship. However, the debtor argued that he would be severely prejudiced since he would be forced to pay well over half a million dollars BEFORE he could litigate the incorrect assessment in state court. Due to the enormity of the debt, the debtor argued that he would be unable to litigate and therefore would be denied the fresh start guaranteed by Chapter 7.
The debtor further argued that while he would be extremely prejudiced by having to pay the tax first and litigate in state court later, the Commonwealth would suffer no prejudice either way because, in the end, the Commonwealth will only get the correct amount of tax due. The debtor argued that all that his case required was a substantiation of the amount of gross revenue he received and then calculate the correct tax due, which would not be a complex matter and not take up too much of the bankruptcy court's time. This outcome would be the same in either bankruptcy or state court, but the procedure in state court would severely prejudice the debtor. In the end, the court agreed with the debtor and allowed the case to move forward in bankruptcy court.
What is interesting about this case is that it illustrates the possibility for other debtors in similar situations to litigate their tax matters in bankruptcy court. This can prove very beneficial to many people who are already considering bankruptcy and also want to clear up a tax matter but have not been able to get the government's attention to resolve it. It also may eliminate the requirement of having to pay a mistaken tax assessment and sue for a refund later. Since most people are filing for bankruptcy precisely because they cannot pay their bills, being able to litigate tax matters before actually having to pay an incorrect amount of tax may make a huge difference in getting the "fresh start" promised by bankruptcy.
In the first few months of any given tax year, families across Washington eagerly wait for their tax refund checks to come back in the mail. For many Washington families, the whole refund process is really used as a savings device to get the money together to cover large out of pocket expenses that cannot be satisfied out of a bi-weekly paycheck. Fortunately, Washington consumers who wish to keep their refund checks while filing bankruptcy can usually accomplish these twin aims without risking the loss of a dime to their Chapter 7 Bankruptcy Trustee. This is so because so long as a prospective bankruptcy filer has lived in the state of Washington for over two years, she is eligible to choose either the Washington or federal bankruptcy exemptions to protect a potential tax refund.
Under the federal exemptions, you are currently allowed $1,150 plus $10,825 of any unused portion of your homestead exemption to exempt any type of property you wish to keep. Since few people in Washington have any equity in their homes, there is almost always a large amount of personal property, including a large refund, that can be protected under the federal exemptions. The only bad news is that not every bankruptcy filer in Washington is eligible to use the federal exemptions.
If you have lived in Washington for the last two years, you can use the federal exemptions, but if you have lived in Washington for less than two years you may not be able to do so. If you have lived in Washington and one other state during the last two years, you will (in most cases) be forced to use the exemptions of whichever state you lived in for the majority of the period between 24 and 30 months ago.
If you live in Washington and need help determining whether you can use the federal exemptions to protect your potential tax refund or want to just discuss strategies for holding onto both this one and the next one, call our Vancouver or Seattle offices to make an appointment or, better yet, set up a phone consultation on the appointment calendar on this website.
The original post is titled Protecting Your Tax Refund in a Washington Chapter 7 Bankruptcy , and it came from Oregon Bankruptcy Lawyer | Portland, Salem, and Vancouver, Wa .
The chapter 7 trustee is a private party who is appointed by the US Trustee’s Office to oversee chapter 7 cases. Most chapter 7 trustees are attorneys, but some are CPAs or people with backgrounds in business. The chapter 7 trustee conducts the 341 meeting of creditors, reviews the petition for accuracy, collects and liquidates assets, makes the asset report to the court, and reports suspected fraud to the US Trustee’s Office.
When you file chapter 7, you will be automatically assigned a chapter 7 trustee. Local bankruptcy lawyers will talk about a trustee being a “Seattle chapter 7 trustee,” a Tacoma Chapter 7 Trustee,” or an “Everett chapter 7 trustee.” This is because the trustee is assigned based on the county that the debtor lives in at the time of filing.
What Will The Chapter 7 Trustee Do In My Case
Debtors often worry that the chapter 7 trustee is going to be mad at them or try to punish them for filing bankruptcy. That is not true. The trustee has a job to do. Sometimes that job puts them at odds with a debtor, because the trustee has to liquidate an asset, report that someone is not eligible for bankruptcy, or report suspected fraud. This is not personal. If the trustee does not do their job, the US Trustee will remove them from the panel of trustees.
The goal is for the chapter 7 trustee to do nothing in your case; or at the very least, to do nothing unexpected. Here are some tips for making sure that your case goes smoothly:
- Make sure that your bankruptcy petition is complete and accurate. Trustees know how to find hidden property.
- Make sure that you use accurate values for your property. The trustee knows when someone has dramatically undervalued a car or piece of real property.
- If you are working with an attorney, you should know ahead of time if there is any risk that the trustee will want to liquidate property.
- If there is an inaccuracy in your petition, make sure that you fix it as soon as your find out about it. Ignoring errors or waiting to fix them is a recipe for disaster, especially if the trustee finds out about the error before you have a chance to fix it.
How Do I Deal With The Chapter 7 Trustee
Chapter 7 trustees have anywhere from dozens to hundreds of open cases at any one time. They are paid $60 per case, plus a percentage of whatever they recover for the benefit of the bankruptcy estate. It is a very difficult job and one that requires them to be very efficient. As a result, a chapter 7 trustee will start each 341 meeting with a series of instructions. Those instructions are designed to keep everything moving quickly and to identify the information that the trustee needs to do their job.
There are a few ways to make sure that your relationship with the trustee goes smoothly:
- Make sure that you submit the Rule 4002 documents to the trustee on time. If you have an attorney, they will submit the documents for you.
- Make sure that you arrive for the 341 meeting on time. I suggest that you plan to get there about ten minutes ahead of time. Parking in Seattle and Tacoma can be tricky, so give yourself plenty of time.
- Have your photo ID and proof of social security number in your hand and ready when your case is called. I suggest that you take them out while the trustee is making their introductory announcements.
- Listen to the trustee’s introductory announcements.
- Most of the questions only require a yes/no answer. If the trustee wants more information, they will ask for it.
What If The Chapter 7 Trustee Is Wrong?
Just because the chapter 7 trustee says something doesn’t mean it is true. The trustee is not a judge. When there is a dispute that you can’t settle, the bankruptcy judge makes the decision. If a trustee breaks the law, is excessively rude, or is unprofessional, the bankruptcy court or the US Trustee’s Office can take action against them. Here are some tips for dealing with a chapter 7 trustee dispute.
- It’s not the trustee’s fault if your lawyer screwed up. I get a lot of phone calls from debtors who are mad at the trustee and think the trustee is out to get them, but it turns out their lawyer was the one who made the mistake.
- You may challenge any liquidation or seizure of property. However, the court will not stop the trustee from sending an appraiser to value your house, your car, or your other property.
- There is a time and place for everything. Remain calm and respectful during the 341 meeting. Losing your temper in a 341 meeting doesn’t work. If push comes to shove, you can put the issue in front of the bankruptcy judge.
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