Blogs
When any of Wynn at Law LLC’s clients own real property in Wisconsin, we look at a Transfer on Death Deed (commonly called a TOD Deed or a TODD) to see if it is a suitable fit for their estate plan. It can sometimes wipe out the need to go to probate court, which is a time and cost saver.
As our earlier article pointed out, if you have $50,000 or more in probate assets, probate court comes into play when distributing assets. Probate assets are all assets NOT automatically transferred to another person when the owner passes. Life insurance proceeds, for example, skip probate because a beneficiary is identified. So, if assets can avoid probate, why not place a TODD on an asset like a vacation home to transfer it directly to beneficiaries, such as the kids?
The answer in some cases is that if you need to protect assets – for or from your children – you might not want to transfer them on your death. For the minor kids, you might want to transfer the asset to a trustee for their benefit until they’re older. In the case of adult children who may have creditor problems or a looming divorce, you might again want a trustee instead of transferring the property to them directly. Otherwise, a TODD making assets ‘unprobatable’ is an alternative for every Wynn at Law LLC client because the property doesn’t need to be owned free-and-clear. You can have a mortgage, a second mortgage, even a line of credit against the property and still use the TODD to pass it on… and skip probate.
Let’s say you had a car and some bank assets totaling $49,995 and a $89,000 getaway cabin up north. All in, the assets would require probate, but if a TODD was placed on the cabin, the cabin passes to your heirs (they still get the debt if it was mortgaged, by the way) and the rest of the estate would avoid probate because it’s under the $50,000 limit.
Your accountant, or your beneficiary’s, will point out that there may be tax benefits to this strategy as well, because the transfer isn’t considered a ‘gift’ subject to gift tax. The TODD may also reduce or eliminate capital gains taxes if and when the property is sold by the beneficiary.
Even if you have the Transfer on Death Deed, you can still choose to sell a property while you’re living: It’s yours! The TODD designation does not give the beneficiary ‘ownership’ of the property while you’re alive… if the document is drafted properly. Call an attorney.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
Photo by Ekaterina Kondratova, used with permission.
The post Transfer on Death Deeds eliminate probate appeared first on Wynn at Law, LLC.
When any of Wynn at Law LLC’s clients own real property in Wisconsin, we look at a Transfer on Death Deed (commonly called a TOD Deed or a TODD) to see if it is a suitable fit for their estate plan. It can sometimes wipe out the need to go to probate court, which is a time and cost saver.
As our earlier article pointed out, if you have $50,000 or more in probate assets, probate court comes into play when distributing assets. Probate assets are all assets NOT automatically transferred to another person when the owner passes. Life insurance proceeds, for example, skip probate because a beneficiary is identified. So, if assets can avoid probate, why not place a TODD on an asset like a vacation home to transfer it directly to beneficiaries, such as the kids?
The answer in some cases is that if you need to protect assets – for or from your children – you might not want to transfer them on your death. For the minor kids, you might want to transfer the asset to a trustee for their benefit until they’re older. In the case of adult children who may have creditor problems or a looming divorce, you might again want a trustee instead of transferring the property to them directly. Otherwise, a TODD making assets ‘unprobatable’ is an alternative for every Wynn at Law LLC client because the property doesn’t need to be owned free-and-clear. You can have a mortgage, a second mortgage, even a line of credit against the property and still use the TODD to pass it on… and skip probate.
Let’s say you had a car and some bank assets totaling $49,995 and a $89,000 getaway cabin up north. All in, the assets would require probate, but if a TODD was placed on the cabin, the cabin passes to your heirs (they still get the debt if it was mortgaged, by the way) and the rest of the estate would avoid probate because it’s under the $50,000 limit.
Your accountant, or your beneficiary’s, will point out that there may be tax benefits to this strategy as well, because the transfer isn’t considered a ‘gift’ subject to gift tax. The TODD may also reduce or eliminate capital gains taxes if and when the property is sold by the beneficiary.
Even if you have the Transfer on Death Deed, you can still choose to sell a property while you’re living: It’s yours! The TODD designation does not give the beneficiary ‘ownership’ of the property while you’re alive… if the document is drafted properly. Call an attorney.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
Photo by Ekaterina Kondratova, used with permission.
The post Transfer on Death Deeds eliminate probate appeared first on Wynn at Law, LLC.
From Bloomberg: Student Loan Giant Faces Trial over US Claim it Duped Borrowers.
Lawsuits brought by Consumer Financial Protection Bureau and state attorneys general of Washington and Illinois allege that Navient mistreated hundreds of thousands of student debtors by taking shortcuts to minimize its own costs, while adding what the CFPB said was as much as $4 billion in interest charges to borrower loan balances.
Navient remains under investigation by other state authorities while it seeks to land a lucrative Trump administration contract to continue collecting payments from borrowers with federal student loans.
A CFPB analysis earlier this year found that Navient was the nation’s most-complained about financial company.
Navient illegally steered struggling borrowers facing long-term hardship into payment plans that temporarily postponed bills (while interest continued to accrue), the officials alleged, rather than helping them enroll in federal programs that cap payments relative to their earnings and offer the promise of loan forgiveness. Navient has denied the allegations.
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About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys. 
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Did Navient Illegally Over-charge Student Loan Borrowers? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
From Bloomberg: Student Loan Giant Faces Trial over US Claim it Duped Borrowers.
Lawsuits brought by Consumer Financial Protection Bureau and state attorneys general of Washington and Illinois allege that Navient mistreated hundreds of thousands of student debtors by taking shortcuts to minimize its own costs, while adding what the CFPB said was as much as $4 billion in interest charges to borrower loan balances.
Navient remains under investigation by other state authorities while it seeks to land a lucrative Trump administration contract to continue collecting payments from borrowers with federal student loans.
A CFPB analysis earlier this year found that Navient was the nation’s most-complained about financial company.
Navient illegally steered struggling borrowers facing long-term hardship into payment plans that temporarily postponed bills (while interest continued to accrue), the officials alleged, rather than helping them enroll in federal programs that cap payments relative to their earnings and offer the promise of loan forgiveness. Navient has denied the allegations.
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys. 
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Did Navient Illegally Over-charge Student Loan Borrowers? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Chapter 11 bankruptcy, also known as “reorganization bankruptcy,”
is a bankruptcy plan that allows corporations, partnerships and individuals
to reorganize their finances and restructure their debt. Unlike
Chapter 13 bankruptcy cases, Chapter 11 bankruptcy has no debt ceiling. This plan is popular
with both large and small businesses that need to restructure their debt.
The reorganization plan is an important part of a Chapter 11 filing. Generally,
a business that is filing for Chapter 11 bankruptcy does not have a restructuring
plan in place and continues to operate as a debtor until a plan is drafted.
Once the company has outlined their restructuring plan, the plan is presented
to the court where it will undergo an analysis before approval. The bankruptcy
court may require that some creditors be paid in full, while allowing
for a partial repayment on other debts.
What Should the Plan of Reorganization Include?
A Chapter 11 bankruptcy plan should be well-organized and straightforward.
Because the process can be complex and because your future financial health
depends on taking the right steps, a reorganization plan should be drafted
by a lawyer or someone with experience in
bankruptcy laws.
The following issues should be outlined in the reorganization plan:
- Identification of each debt and to whom it is owed
- A determination of which debts will be paid in full, and which debts will
be repaid in a percentage amount - Methods regarding how the debts will be paid, whether through the sale
of assets, or from future profits, etc. - Guidelines as to how the company will continue to operate while implementing
the new plan - Whether the execution and oversight of the reorganization plan will be
carried out by a designated committee
What Happens If the Reorganization Plan is Violated?
Until a business has a valid reorganization plan, they will not be allowed
by the courts to declare a Chapter 11 bankruptcy. However, once the reorganization
plan is drafted and approved by the bankruptcy court, it is effective
and legally binding. Violations of the reorganization plan, whether by
the debtor or the creditor, can lead to a variety of legal repercussions.
When the Debtor Violates
If a debtor violates the terms of the reorganization plan by not paying
the debts as agreed upon, the creditor may be permitted to secure a lien
on the business property or assets in order to satisfy the debt payments.
When the Creditor Violates
The creditor is also bound by the terms outlined in the reorganization
plan. If a creditor attempts to collect more than the what is required
by the agreement, the debtor can reference the bankruptcy reorganization
plan. The creditor is only entitled to the payment agreed upon, even if
the debt is to be paid in a percentage amount.
By the proper negotiation between the creditor and debtor parties during
the drafting of the reorganization plan, many lawsuits and legal disputes
can be avoided.
Where Can I Find Help With My Plan of Reorganization?
To avoid errors and misunderstandings that can slow the process of declaring
Chapter 11 bankruptcy and result in legal disputes, anyone considering
bankruptcy as a means of debt relief and reorganization should be intent
on working with proven lawyers like those at Allmand Law Firm, PLLC. Our
Dallas bankruptcy attorneys represent clients throughout the Dallas –
Fort Worth Metroplex, and are available to discuss your unique situation,
goals, and options during a FREE financial empowerment session.
Contact us today to request your consultation.
The post Understanding Your Plan of Reorganization for a Chapter 11 Bankruptcy appeared first on Allmand Law.
Contempt bankruptcy court order ends in prison time:
Contempt of bankruptcy court order results in prison time, plus $1,000 day fine.
In re Kenny G. Enterprises 16-55007 (9th Cir 7/26/2017) Kenneth Gharib refused to comply with a bankruptcy court order to turn over $1,420,000 belonging to a chapter 7 estate. The judge imposed sanctions for the contempt: civil contempt sanctions of $1,420,000, $1,000 a day until he complied, plus incarceration until he complied (that was May of 2015 and as of this writing he is still in prison). The District Court of California affirmed the order, except the $1,000 a day. The 9th Circuit reverses on the issue of daily sanctions, finding that such daily sanction is permitted if it is “properly coercive” to comply with the turnover order, but not if it becomes punitive.
In the face of a § 542 violation the bankruptcy court may invoke its contempt power under § 105, which allows the court to “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C . § 105(a) Such sanctions include incarceration for more than two years
Contempt of bankruptcy court order results in unexpected consequences.
Trying to ignore or play games in bankruptcy will result in losing more than a home, business or money. It can result in losing your freedom by being sentenced to prison (not great on your resume’). So many people believe that filing for bankruptcy is like playing “hide and seek”. If you are really good at hiding you will win. Mr. Kenneth Gharib now knows better. He has been in prison for two years and counting.
Other articles/blogs:
- You cannot be arrested for not paying your creditor cards
- ou cannot be arrested for not paying your bills.
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Can You End up in Prison when Filing a Bankruptcy? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
Contempt bankruptcy court order ends in prison time:
Contempt of bankruptcy court order results in prison time, plus $1,000 day fine.
In re Kenny G. Enterprises 16-55007 (9th Cir 7/26/2017) Kenneth Gharib refused to comply with a bankruptcy court order to turn over $1,420,000 belonging to a chapter 7 estate. The judge imposed sanctions for the contempt: civil contempt sanctions of $1,420,000, $1,000 a day until he complied, plus incarceration until he complied (that was May of 2015 and as of this writing he is still in prison). The District Court of California affirmed the order, except the $1,000 a day. The 9th Circuit reverses on the issue of daily sanctions, finding that such daily sanction is permitted if it is “properly coercive” to comply with the turnover order, but not if it becomes punitive.
In the face of a § 542 violation the bankruptcy court may invoke its contempt power under § 105, which allows the court to “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” 11 U.S.C . § 105(a) Such sanctions include incarceration for more than two years
Contempt of bankruptcy court order results in unexpected consequences.
Trying to ignore or play games in bankruptcy will result in losing more than a home, business or money. It can result in losing your freedom by being sentenced to prison (not great on your resume’). So many people believe that filing for bankruptcy is like playing “hide and seek”. If you are really good at hiding you will win. Mr. Kenneth Gharib now knows better. He has been in prison for two years and counting.
Other articles/blogs:
- You cannot be arrested for not paying your creditor cards
- ou cannot be arrested for not paying your bills.
Share this entry
About the Author:
Diane L. Drain is a well known and respected Arizona bankruptcy attorney. She is an expert in both consumer bankruptcy and Arizona foreclosure. Since 1985 she has been a dedicated advocate for her clients and spokesperson for Arizona citizens. Diane is a retired professor of law teaching bankruptcy for more than 20 years. As a teacher she believes in offering everyone, not just her clients, advice about the Arizona bankruptcy laws. She is also a mentor to hundreds of Arizona attorneys.
I would be flattered if you connected with me on GOOGLE+
*Important Note from Diane: Nothing on this website should be construed as establishing a lawyer-client relationship between you, me, the author of any page or the website owner (me) who happens to be a lawyer. Everything on this web site is available for educational purposes only, is not intended to provide legal advice nor create an attorney client relationship between you, me, or the author of any article. You may pick up some information about bankruptcy, foreclosure or the practice of law written by myself or others. Any information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state.*
The post Can You End up in Prison After Filing a Bankruptcy? appeared first on Diane L. Drain - Phoenix Bankruptcy & Foreclosure Attorney.
If you or a loved one are currently considering bankruptcy to address your
financial problems and obtain a financial fresh start, it is important
to remember that not everything you hear about the process is true. There
are a great deal of myths surrounding bankruptcy, and they often comes
through word of mouth, anecdotes, and sheer misinformation they gets perpetuated
among the public. Taking these myths as fact can not only give you the
wrong idea of what bankruptcy is truly intended for and how it is used,
but can also lead to critical errors in your financial journey that may
impact your ability to qualify or navigate the process successfully.
At Allmand Law Firm, PLLC, our Dallas bankruptcy lawyers have worked with
many clients across the Dallas-Fort Worth area, and we have heard it all
when it comes to myths about
bankruptcy. Below, we have put together some of the most common myths we hear from
our clients, and have provided the facts that put them to rest:
- Bankruptcy will eliminate all past debts. People may mistakenly think filing for bankruptcy will provide them with
a completely “fresh start” and blank financial slate that
means they won’t have to pay back any of the money they have owed.
While it is true that bankruptcy can provide a type of fresh start in
a brighter financial journey, several types of debt, including alimony,
child support, restitution payments, and even student loan payments, are
not discharged by bankruptcy, and you will still be responsible for paying
them. If you have kept up with filing your taxes, there is a chance that
any tax debts you have may be reduced or eliminated, but if not, you will
still be responsible for these debts as well. - Bankruptcy will destroy your credit permanently. Your credit will take a hit, but it is only temporary, and you will find
that you will very soon be receiving credit card offers through the mail
once again. In order to rebuild your credit, take advantage of a secured,
low-limit credit card and start making regular, on-time payments. Within
a year, switch to a regular credit card and continue making payments.
As long as your payments are not late, your credit score will improve.
Bankruptcy is not a process that is intended to permanently scar and hinder
consumers, and there is always life after bankruptcy. - Spending sprees right before filing for bankruptcy won’t have to
be repaid. Courts consider this to be fraudulent activity, and any debt that you rack
up through fraud is not dischargeable. You will still be responsible for
repayment even if you have filed for bankruptcy. Fraud can not only impact
your bankruptcy case, but also potentially expose you to criminal allegations.
Simply put, don’t believe this myth. It can cause a great deal of trouble. - Those who file for bankruptcy can’t control their spending and are
financially irresponsible. This simply isn’t the case for many well-intentioned Americans. A
person who files for bankruptcy does not necessarily always have a spending
problem. Personal problems like a long-term serious illness, an expensive
divorce, or losing one’s job can cause even the most responsible
people to have serious financial issues that can only be solved by bankruptcy.
In a time when financial problems impact thousands of Americans, bankruptcy
becomes a tool that helps good people who have fallen on tough times.
Bankruptcy is not meant to be a financial cure-all, but it can benefit
many people who are struggling to regain financial control once again.
Bankruptcy does not define a person, and there is always hope to regain
financial freedom. If you are considering filing for bankruptcy,
call Allmand Law Firm, PLLC today and request for a FREE financial empowerment session to learn more
about your options.
The post Four Bankruptcy Myths Busted appeared first on Allmand Law.
Wynn at Law LLC has noticed a recent resurgence of real estate ‘flipping.’ Late-night cable and radio stations are again saturated with ads touting the wild income potential of acquiring and liquidating the same piece of property within the shortest possible time frame. Flipping is legal – as long as it’s done on the up and up.
Before the housing collapse a decade ago, some curbs were put in place to deter flipping. The FHA sets the rules by which most lenders follow: Having 3.5 percent as a down payment for example. In 2005, the FHA required additional inspections and safeguards taken on mortgages applied for on properties that have been owned for less than 180 days, and outright forbidding the approval of mortgages on properties owned for less than 90 days. Those rules were relaxed in 2010 following the real estate market bust wiping out $7 trillion in property value.
More importantly, that lost value represented the largest investment loss for many families… and did not involve as many people flipping houses. With that in mind, most lenders still adhere to the 90-day guideline.
If you’re buying a flipped home, there are still numerous loopholes and unregulated areas that an unethical or inattentive flipper can exploit when flipping a house. It still remains up to the buyer and his or her attorney to perform all the necessary due diligence before buying. If the property is to be purchased with an FHA-backed loan, a flipped home may require more time to purchase because of the additional documentation required of the seller.
If you’re interested in flipping, avoid the late-night infomercials blaring about how you can flip a home without putting in a dime of your own. Banks have extremely tight restrictions to watch for fraud. It’s best to have cash on hand for this highly speculative form of investment: Cash you’re able to part with (and potentially not recoup) for at least 90 days. A quickly-flipped home requires documentation on renovations, as well as additional appraisals, to justify a much higher resale price if the deal involves an FHA-insured loan. The average flipping time from purchase to resale is just over 106 days, according to market monitor RealtyTrac. Know this as well: Some properties have to become rentals before the flipper is able to get from the market what he or she thinks is the ‘value’ of the property. Are you prepared, legally, to become a landlord?
In the case of flipping, it’s the old adage at play whether you’re buying a flipped home or flipping one yourself… If it sounds too good to be true, it probably is. Get an attorney.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
Photo by Victor Zastolskiy, used with permission.
The post Flipping real estate advice for buyers, sellers, and speculators appeared first on Wynn at Law, LLC.
Wynn at Law LLC has noticed a recent resurgence of real estate ‘flipping.’ Late-night cable and radio stations are again saturated with ads touting the wild income potential of acquiring and liquidating the same piece of property within the shortest possible time frame. Flipping is legal – as long as it’s done on the up and up.
Before the housing collapse a decade ago, some curbs were put in place to deter flipping. The FHA sets the rules by which most lenders follow: Having 3.5 percent as a down payment for example. In 2005, the FHA required additional inspections and safeguards taken on mortgages applied for on properties that have been owned for less than 180 days, and outright forbidding the approval of mortgages on properties owned for less than 90 days. Those rules were relaxed in 2010 following the real estate market bust wiping out $7 trillion in property value.
More importantly, that lost value represented the largest investment loss for many families… and did not involve as many people flipping houses. With that in mind, most lenders still adhere to the 90-day guideline.
If you’re buying a flipped home, there are still numerous loopholes and unregulated areas that an unethical or inattentive flipper can exploit when flipping a house. It still remains up to the buyer and his or her attorney to perform all the necessary due diligence before buying. If the property is to be purchased with an FHA-backed loan, a flipped home may require more time to purchase because of the additional documentation required of the seller.
If you’re interested in flipping, avoid the late-night infomercials blaring about how you can flip a home without putting in a dime of your own. Banks have extremely tight restrictions to watch for fraud. It’s best to have cash on hand for this highly speculative form of investment: Cash you’re able to part with (and potentially not recoup) for at least 90 days. A quickly-flipped home requires documentation on renovations, as well as additional appraisals, to justify a much higher resale price if the deal involves an FHA-insured loan. The average flipping time from purchase to resale is just over 106 days, according to market monitor RealtyTrac. Know this as well: Some properties have to become rentals before the flipper is able to get from the market what he or she thinks is the ‘value’ of the property. Are you prepared, legally, to become a landlord?
In the case of flipping, it’s the old adage at play whether you’re buying a flipped home or flipping one yourself… If it sounds too good to be true, it probably is. Get an attorney.
*The content and material in this original post is for informational purposes only and does not constitute legal advice.
Photo by Victor Zastolskiy, used with permission.
The post Flipping real estate advice for buyers, sellers, and speculators appeared first on Wynn at Law, LLC.
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.