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By: Marshall G. Reissman Bankruptcy Attorney in St. Petersburg, Florida at The Reissman Law Group, P.A.
The test that everyone wants to talk about when they come in for a consultation is the Means Test. Folks generally want to know if they qualify to file Chapter 7 by passing the Means Test. This test is pretty simple. If you are below the state median income you qualify. Everyone breathes a big sigh of relief that they won’t be forced into a repayment plan under Chapter 13. The problem with this is the Means Test is where the analysis begins, not where it ends. The actual income and expenses of the Debtor must be taken into account in order to pass the not much discussed “Totality of Circumstances Test.”
Even if a Debtor is below the median income on the Means Test, if the Debtor has disposable income on the bankruptcy schedules, the Debtor may not qualify to receive a discharge under Chapter 7. This is called the Totality of Circumstances Test. If a Debtor has disposable income to pay back unsecured creditors, the Trustee can file a notice stating that receiving a discharge under Chapter 7 would be an abuse. Not many folks talk about the Totality of Circumstances Test, and the only test you can find on the internet is the Means Test. Inevitably, folks do some research on the internet, find out they are under their state’s median income, and automatically think they can receive a discharge under Chapter 7. Therein lies the mistake. Passing the Means Test just gets you to the starting line, a better analysis needs to be performed to see if you can finish the race.
I recently had the opportunity to review Warren Sapp’s bankruptcy petition when I was interviewed by a Tampa Bay Times reporter. Link to the story can be found here. I previously wrote an article about the reason why I, and other bankruptcy attorneys, think that Mr. Sapp filed for bankruptcy. The garnishment. Another question folks had was how could a person with so much income file Chapter 7. Looking over the schedules, it did not appear Mr. Sapp had substantial income in the six months prior to filing the Chapter 7 Bankruptcy petition. What I believe will be problematic for Mr. Sapp is the amount of disposable income he shows on his schedules. While Mr. Sapp does not fail the Means Test, Mr. Sapp lists more than $4,500.00 in net monthly income on his schedules, which could be viewed as an abuse is he receives a discharge under Chapter 7. I guess we will have to wait and see.
In the meantime, if you want to find out if you not only qualify to file Chapter 7 Bankruptcy, but will be able to receive a discharge under Chapter 7, call us for a free consultation. We have more than 30 years combined experience representing individuals in bankruptcy.
The post The Test No One Discusses in Bankruptcy appeared first on St. Petersburg Law Blog.
Myths and Truths About Chapter 13 Bankruptcy: Part II
Myth: Debtors who file a Chapter 13 bankruptcy will lose their entire tax refund every year they are in the Chapter 13 without exception.
Truth: Sometimes debtors in a Chapter 13 bankruptcy are required to turn over their tax refunds. The debtor is obligated to turn over tax refunds; however, the debtor may retain the lesser amount of either $600 or two months plan payments. The debtor is required to turn the excess over to the trustee and should not spend the rest of the refund. If the debtor would like to retain more than that amount, they can contact their attorney and have their attorney file a Motion to Retain Tax Refunds. The motion states the legitimate expenses debtor would like to spend the money on, and receipts or bids for the services or products would be attached so the trustee can confirm the amounts the debtor wishes to retain. The trustee has 21 days to object. If no objection is filed, the debtor can retain the portion of their refund accounted for by the motion. If the trustee objects, the debtor would be required to surrender their tax refund to the trustee.
Myth: When the debtor makes his or her Chapter 13 plan payment every month, the trustee takes most of the money for himself.
Truth: The trustee gets paid a small percentage of the total plan base as his fee. The percentage rate fluctuates but is usually about five percent. The trustee disperses the rest of the monthly plan payments to various creditors. The trustee pays on secured debts, such as vehicle loans, arrears on houses, and monthly mortgage payments if the debtor wishes. They also pay taxes, unsecured debts, sewer bills, and other debts as well. If the debtor is required to surrender tax refunds or employee bonuses, the trustee does not keep that money for himself. He generally uses those proceeds to pay unsecured creditors a portion of their debt if they have filed a proof of claim. The trustee may pay certain creditors before other creditors based on their priority level.
If you have questions, please contact a St. Louis or St. Charles bankruptcy attorney.
Myths and Truths About Chapter 7 Bankruptcy: Part II
Myth: Debtors can include some creditors in a bankruptcy and leave out other creditors so that some creditors can be discharged while debtors continue to pay other creditors.
Truth: Debtors may not include some creditors in a bankruptcy but not others. Any creditor who debtor owes money at the time of the filing of the bankruptcy must be listed in the bankruptcy petition. The debtor may not pick the creditors he/she wishes to continue paying while other creditors will be discharged and will not receive any money. The trustee will ask the debtor under oath at the 341 Creditor meeting whether all creditors have been listed. If not all creditors who the debtor owes money are listed, the debtor will have to pay the additional court fees in order to amend the creditor matrix to make sure all creditors they are aware of are listed. The trustee does not want some creditors to get preferential treatment. If the balance on a particular account is $0, the debtor does not need to list that creditor on the petition.
A debtor can continue to pay on secured loans, such as a house or a car. The trustee allows those debts to be paid back because they are secured. Those debts do still need to be listed in the bankruptcy so the trustee knows what assets a debtor has at the time of filing.
Myth: If a debtor has equity in a home, vehicle, or any other un-exempt property, they can transfer the property into someone else's name so the trustee will not attempt to seize the equity.
Truth: A debtor cannot transfer property to avoid the trustee or their creditors. The debtor has an obligation to list in the Statement of Financial Affairs any transfers of property or any sales in the two years prior to the filing of the bankruptcy. The trustee can void the sale or transfer of the property if within the two years prior to the filing. If the sale or transfer is voided, the trustee can regain possession of the property, sell it, and use the money to pay the debtor's creditors. If the transfer is not listed in the bankruptcy petition, the debtor would be in violation of the bankruptcy rules.
If you have any questions, please contact a St. Louis or St. Charles bankruptcy attorney.
Recently I, Bankruptcy Attorney Jeffrey Hsu of JCH LAW FIRM, successfully filed a bankruptcy for members of an LLC faced with personal guarantees related to a retail business. While some bankruptcy attorneys recommended that they file for chapter 7 corporate bankruptcy (I believe those attorneys were hoping to justify the generation of additional attorney’s fees), I act with integrity when dealing with clients - meaning I am honest and professional. Therefore, I did not advise the clients file an unneccessary corporate bankruptcy where the real issues at hand dealt with the liabilities stemming from the personal guarantees.
The clients were satisfied and saved thousands in out of pocket expenses had a corporate chapter 7 also been filed. Because a corporate bankruptcy does not result in a discharge of debts, there is generally little incentive to file a chapter 7 corporate case when the real issues relate to personal guarantees against the members of the LLC in an individual capacity. The limited liability offered to members does not shield the individual liability when personal guarantees are extended to the creditor.
Thus, when thinking about bankruptcy, remember that your bankruptcy attorney should not only be competent - your attorney should also be honest. If your attorney is well established, well known, and a supposed expert in the field, your attorney should be able to break down fundamental legal concepts and explain it to you so that you understand. If your bankruptcy attorney says something is either too complex to explain, or you do not understand the explanation, either your attorney does not know the law, or even if the attorney does know the law, if it can’t be explained to you, how do you think the attorney will explain the situation to the trustee or judges in bankruptcy court?
At JCH Law Firm, we are a bankruptcy firm that specializes in the practice of bankruptcy law for all persons involved in the bankruptcy process. We cater to the San Gabriel Valley Community.
We file Alhambra bankruptcies, Monterey Park bankruptcies, El Monte Bankuptcies, Rosemead Bankruptcies, Altadena Bankruptcies, Arcadia Bankruptcies, City of Industry Bankruptcies, Covina Bankruptcies, Diamond Bar Bankruptcies, Duarte Bankrutpcies, Pasadena Bankruptcies, Glendora Bankruptcies, Hacienda Heights Bankruptcies, Monrovia bankruptcies, Montebello bankruptcies, Pomona Bankruptcies, Rowland Heights bankruptcies, San Gabriel Bankruptcies, Temple City Bankruptcies, Walnut Bankruptcies, Whittier Bankruptcies, and more.
Contact us for a free consultation at 626-999-5959. Our office is located at 1031 S. Garfield Ave., Alhambra, CA 91801.
Many of our clients had received phone calls from their ‘lender’ (before they were clients) who at the time sympathized with the fact they were behind on their mortgage payments. These folks are often told there is a solution for their problem. The lender then proceeds to give the client a long drawn out procedure to follow. At this point, the client has stopped making mortgage payments all together because they were instructed to stop making payments by the lender while going through the loan modification process. Most people place a lot of weight on their advice; after all ‘the lender’ loaned them the money originally. 
During this time clients are jerked around for about a year or longer. Until the day comes when the client receives a piece of Certified Mail – Foreclosure Notice which states that said lender who had been cooperating for so long is now foreclosing on their home. This is a common story and has become a very big problem. Although some loan modifications are successful and do bring relief to individuals it is important that you do not stop making your mortgage payment under any circumstances while submitting the applications and necessary documents. Avoid having to file a Chapter 13 bankruptcy to save your home from foreclosure and remember “If it sounds too good to be true, it probably is.”
Some things just are. It does not matter whether we think about it, like it or dislike it. It is what it is. Spending our time worrying about it does not change it. Feeling bad because of it does not make it any different. Wondering what other people think about it has no affect.
Getting a grip on reality is the first step toward finding a solution. When it comes to money problems it is easy to try to ignore the problem. That will work for a while. Others will worry about it. That doesn’t help at all. Feeling bad doesn’t help either.
I have met with thousands of people who struggle with debt. In twenty-five years of meeting with people to discuss their financial problems I have noticed a consistent pattern.
They almost always make the appointment long after the problem has gotten out of control. Many times they don’t take any action until they have suffered more than any reasonable person should.
Most everyone tells me how the problems started. What lead to falling behind on payments? Part of me wants to tell them that it does not matter. I am here to help deal with what is going on now. I listen to the story. In a way it is like most good books. There is a plot that has been used over and over, but the characters and the setting make it interesting. Almost every time the financial problems started with something everyone would agree is unfair.
That is one of the realities of life. Unfair things happen all the time. We don’t have control over this.
After hearing the story about the trouble that led to the financial stress, most people want me to know that they are not the kind of people that don’t pay their debts. That they are honest and want to pay but right now they cannot. I already know this, too. No one can get far enough into debt if they have not had a long history of paying their bills on time.
But, this is another reality of life. You cannot pay if you do not have any money.
My view is that things are what they are. There is no judgment involved. If you don’t have the money to pay debts, you are not going to pay them. It is not a moral question. It is just a fair observation of the way things are.
The next question is, what should you do about it? Once you take an objective look at what is going on making a decision is easier. It is hard to be objective when you are dealing with your own situation. That is where I can help.
I help people fix financial problems by filing bankruptcy. That does not mean I will recommend a bankruptcy to everyone that meets with me. In fact, a solid 20% to 30% of the people I meet with should not file bankruptcy. They were just too stressed about their problem to see the solution.
My main job is to help people get a grip on reality. It helps to talk things out and get an objective opinion. If you are thinking that you may need to file a bankruptcy, I can help.
If it turns out that filing bankruptcy is the best solution, then that is just another thing that is. Stressing, worrying, and ignoring this fact is not going to change it. Things are what they are. I can help you deal with it. And, it is not good or bad, it just is.
Original article: Getting Real: Bankruptcy & Financial Problems©2013 Arizona Bankruptcy Lawyer. All Rights Reserved.The post Getting Real: Bankruptcy & Financial Problems appeared first on Arizona Bankruptcy Lawyer.
A mistake that some people make after filing bankruptcy is being too cautious. Sounds strange, but it’s true. It feels really good to have a fresh start. So how can you possibly be too cautious with your credit after the mess your bankruptcy just cleaned up??
I am guilty of it. Since filing a Chapter 7 I wouldn’t buy anything unless I had cash. I was driving a reliable vehicle so I didn’t use credit for anything at all. I was downright afraid of credit cards. Big mistake.
Fourteen (14) years after filing, I decided to buy my newly licensed teenagers a car. I didn’t bother to check my credit… why would I? I hadn’t used or applied for any credit cards; I believed my credit should be perfect. At least that's what I thought. Every dealership I went to gave me the same answer. No. Not because I had bad credit, but because I had no credit. It was a rude awakening to be turned down for not having credit.
Eventually, I went to my credit union and was able to finance a car because I had been banking with them for years.
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The moral of the story? Don’t forget to re-build your credit after you file.
By: Ceara L. Riggs, Bankruptcy Attorney in St. Petersburg, Florida at The Reissman Law Group, P.A.
Search for St. Petersburg/Tampa Bankruptcy Lawyers and what comes up? Pages about modifying your home or walking away from your home. Those aren’t the only two options, but they’re the most common options.
So how about modifying? It’s easy – as easy as filling out an application to be President of the United States. Well, although there’s no application to be President of the United States, there is an application for a modification. But unlike any other application or paperwork you’ve completed, after you complete the paperwork demanded by the bank (all 40-80 pages of it), you send it to the bank for them to review. Then you send it in again. And send it in again. And send it in again. And maybe send it in one more time. Then you wait until they tell you you need more documents. Rinse. Repeat. Oh yeah, and there’s no guarantee that you’ll get a modification at the end, by which time you’re even further behind on your mortgage.
Or, you can hire The Reissman Law Group, P.A. Our law firm can make your life easier by sparing you from the repeated sending and numerous requests. But, more importantly, in a typical scenario, the money spent on our attorneys may even reduce the amount of money that you pay out to the bank over the duration of the new mortgage. In other words, it’s worth it to hire someone that scares the bank – someone with an “E-S-Q” at the end of their name. (See end of author’s name)
Speaking of scaring the bank, the other option that seems to be advocated on the internet is to simply walk away – sell your house through a short sale process, enter into a Deed in Lieu agreement, or literally, walk away and let the bank foreclose. No matter what you choose, your next internet search better be for “Deficiency Judgment” and what you find will be scarier than Freddie or Chucky knocking on your door. What you’ll find is that your bank can lie in wait for 7 years and then, after they sold the house, probably entered into a new mortgage with a new borrower, and seemingly moved on with their lives by collecting money from the new borrower, they can come after you for this elusive, undisclosed “Deficiency Judgment.” Definition - unsecured money judgment against a borrower whose foreclosure sale did not produce sufficient funds to pay the underlying loan in full (thank you, Wikipedia!) So when you walk away from your house, selling it for less than the amount remaining on your loan, and usually it’s sold for a lot less, the bank can still collect that money from you, 7 years down the road, as a lump sum.
But, guess what? In this movie, you can finally get rid of the “Chucky” and make sure he doesn’t haunt you for 7 years. You can get rid of that deficiency judgment and not have it hanging over your head for 7 years. That means when you walk away from the house, in any form, you really can walk away from the house and start again. Now doesn’t that sound like a better idea?
To secure a modification or to start over without lingering debt haunting you, contact the attorneys at The Reissman Law Group, P.A.
By: Ceara L. Riggs, Bankruptcy Attorney in St. Petersburg, Florida at The Reissman Law Group, P.A.
Search for St. Petersburg/Tampa Bankruptcy Lawyers and what comes up? Pages about modifying your home or walking away from your home. Those aren’t the only two options, but they’re the most common options.
So how about modifying? It’s easy – as easy as filling out an application to be President of the United States. Well, although there’s no application to be President of the United States, there is an application for a modification. But unlike any other application or paperwork you’ve completed, after you complete the paperwork demanded by the bank (all 40-80 pages of it), you send it to the bank for them to review. Then you send it in again. And send it in again. And send it in again. And maybe send it in one more time. Then you wait until they tell you you need more documents. Rinse. Repeat. Oh yeah, and there’s no guarantee that you’ll get a modification at the end, by which time you’re even further behind on your mortgage.
Or, you can hire The Reissman Law Group, P.A. Our law firm can make your life easier by sparing you from the repeated sending and numerous requests. But, more importantly, in a typical scenario, the money spent on our attorneys may even reduce the amount of money that you pay out to the bank over the duration of the new mortgage. In other words, it’s worth it to hire someone that scares the bank – someone with an “E-S-Q” at the end of their name. (See end of author’s name)
Speaking of scaring the bank, the other option that seems to be advocated on the internet is to simply walk away – sell your house through a short sale process, enter into a Deed in Lieu agreement, or literally, walk away and let the bank foreclose. No matter what you choose, your next internet search better be for “Deficiency Judgment” and what you find will be scarier than Freddie or Chucky knocking on your door. What you’ll find is that your bank can lie in wait for 7 years and then, after they sold the house, probably entered into a new mortgage with a new borrower, and seemingly moved on with their lives by collecting money from the new borrower, they can come after you for this elusive, undisclosed “Deficiency Judgment.” Definition – unsecured money judgment against a borrower whose foreclosure sale did not produce sufficient funds to pay the underlying loan in full (thank you, Wikipedia!) So when you walk away from your house, selling it for less than the amount remaining on your loan, and usually it’s sold for a lot less, the bank can still collect that money from you, 7 years down the road, as a lump sum.
But, guess what? In this movie, you can finally get rid of the “Chucky” and make sure he doesn’t haunt you for 7 years. You can get rid of that deficiency judgment and not have it hanging over your head for 7 years. That means when you walk away from the house, in any form, you really can walk away from the house and start again. Now doesn’t that sound like a better idea?
To secure a modification or to start over without lingering debt haunting you, contact the attorneys at The Reissman Law Group, P.A.
The post There’s A Monster in the Closet! appeared first on St. Petersburg Law Blog.
Stories of Warren Sapp’s bankruptcy filing has been all over the news lately. It’s hard to imagine he’d find himself in such a predicament. After all, he’s a pro-bowler with at least $40 million in career NFL earnings. He has a good job as a very entertaining television analyst which has led to other money making endeavors, such as Dancing with the Stars.
Unfortunately, Warren Sapp is just the most recent of a long line of NFL players who have gone broke after their NFL career. According to a 2009 Sports Illustrated article, 78 percent of NFL players go broke 3 years after their playing careers end. Which is especially bad news because the average career of an NFL players is only 3.5 years.
Why does it happen? First off, only a very few will ever make the same money they made during their career. And while they are making the big bucks, they get sucked into bad investments, pursued by freeloaders and an entourage looking for handouts, and are barraged with bad advice from people they think they can trust. Add to that, football has taken a big toll on their bodies so medical problems start arising. Plus, they are young kids who suddenly have the money of their dreams and what they’ve worked for years. Of course they’ll want to show-off a bit and live the life of movie stars.
So, to the NFL Class of 2012 (or to anyone else who has suddenly come into large amounts of money), here’s what to remember:
1) Plan for the Worst. Celebrate now. You deserve it. But, your earning and your career depend on many things all working together for a number of years, including your health, your skills, the offense or defense your team runs, your coach, hungry rookies and free agents in coming years, and countless other events that may be beyond your control. Even in a short career, you may make more money than most Americans make over their lifetimes. Spend some now, treat yourself but don’t continue to overspend. But plan to make the most of it rest last your life.
2) Your Agent Shouldn’t Advise You on Your Money. Agents should never be your source for financial advice. It’s not their expertise. They are great at what they do- negotiating your deal. But, just as you don’t want a DT kicking field goals, you need an outside person to handle your money (preferably not a family member or a friend unless that was their business before you signed your contract). Too many financial disasters are the result of bad advice from agents who get in over their heads.
3) No Private Investment or Real Estate Deals. You are now a target of people looking for easy money, These people are smooth talkers and put on a good show telling you about guaranteed profits in real estate and investments. 
But, remember no one is going to give you money just because of who you are or what team you play for- they want your money. They’ll use your money to pay themselves a good commission and could care less whether the deal is real or one that will pay off (if the deal was even real in the first place). Even when your friends come to you with deals, be skeptical about who contacted them. Stay away from private investment and real estate deals. Too many things can go wrong, business deals are not your expertise- just ask John Elway (lost $3million to a hedge-fund manager who was arrested on charges that he ran a Ponzi scheme), Mark Brunell (filed bankruptcy after failed business ventures, including 12 Whataburger restaurants), or Deuce McAllister (lost bigtime in car dealership.
4) USE PROTECTION. Child Support payments continue until the child grows up. You’re old enough now to know that you are on the hook for an unplanned pregnancy, not matter what is said in the heat of the moment. The major reason behind the financial problems of Warren Sapp, Chris McAlister, Travis Henry and many others are the child support payments. These payments are often valued at the height of a playing career and can be $5000 to $10000 a month. And, guess what, you have to keep making these payments for over 20 years. Warren Sapp is over $728,000 behind in child support payment and is required to pay about $75,000 a month. Bankruptcy won’t help him with those payments either.
5) It Can Happen to You. You’ve been a star your whole life. You know deep inside that you will continue to be a star and your career will continue until you’re 40 so money will never be a problem. I hope that’s the case. Then, you won’t have to worry. But, still, don’t you think that a little prior proper preparation is worthwhile- just in case.
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