Archive | James H MaGee

How can I avoid bankruptcy fraud allegations?

Every so often, there’s a local news story about someone who has been convicted of bankruptcy fraud. This week, the case belongs to one George Raynor, of Baileyville, Maine. While the case itself isn’t exceptional in any way, it highlights an important precaution for potential bankruptcy filers to note in order to avoid a fraud conviction.

Bankruptcy fraud is exactly what it sounds like: a bankruptcy filer’s provision of false information to the court that alters the outcome of his or her bankruptcy case. In some cases, bankruptcy fraud can be unintentional, but its penalties are steep: those convicted of bankruptcy fraud might face up to five years in jail and up to $250,000 in fines.

Common examples of bankruptcy fraud include an attempt to shield property from the court; a filer might attempt to transfer property from his or her name to the name of a friend or family member or might simply fail to report ownership of a piece of property or sum of money.

But bankruptcy fraud can also occur when a filer fails to mention income he or she is expected to receive in the future. Raynor’s case falls into this category.

According to the Bangor Daily News, Raynor and his wife filed a bankruptcy petition in 2006 but, in their list of assets, did not mention:

A savings account in a bank;
A deferred compensation retirement account valued at roughly $150,000;
A lump sum payment from his retirement account in the amount of $97,000; and
A payment from his former employer of $12,000 as compensation for unused sick and vacation days.

Now convicted of the charges, Raynor could see as much as five years behind bars and fines of up to a quarter of a million dollars. To date, Raynor’s sentencing has apparently not been scheduled. Often, the amount of the fine assessed on a bankruptcy fraud conviction roughly equals the amount of money or value of property that the filer attempted to withhold from the court.

One of the easiest ways to avoid bankruptcy fraud is to work with a bankruptcy lawyer. Working with someone who is familiar with state bankruptcy laws and the procedures of the bankruptcy court can go a long way toward avoiding mishaps that could delay or derail a case.

Lawyers can also advise filers about which of their assets they must list, whether gifts or property transfers will be considered legal by the court, and what outcomes they can expect from their bankruptcy case.

In cases where a filer may have future income due to him or her, a lawyer can help determine how to calculate the value of that income and how to report it on bankruptcy filing paperwork.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Is student loan debt a bigger problem than credit card debt?

USA Today recently reported that student loan debt in the United States, which totals $850 billion, now exceeds outstanding credit card debt in the U.S., which totals $828 billion.

USA Today gets its numbers from a web site publisher named Mark Kantrowitz, who publishes two scholarship matching services called FinAid.org and FastWeb.com.

A more interesting element of this issue has to do with the monthly repayment numbers facing borrowers. The USA Today article suggests that $30,000 of student loans, payable at 6.8% interest over ten years would amount to $350 per month. At this level of debt, the average person would need to earn at least $42,000 per year.

In a bankruptcy context, student loan debt is not dischargeable except in cases of “undue hardship.” In most cases, “extreme hardship” has essentially been limited to student loan debtors who have a medical issue that prevents them from working. At this point in time, debtors have not been successful in arguing for hardship discharge on the grounds that they cannot find a job in this economy that pays enough to support their student loan obligations. There was a recent Supreme Court decision involving student loans and bankruptcy, but that case did not address the substantive issue of what constitutes “undue hardship.”

Why does it seem like everyone is filing for bankruptcy these days?

A growing number of baby boomers are going bust.

A newly released study found that 42% of all individuals filing for bankruptcy were between the ages of 45 and 64 in 2007 and that older Americas are filing for protection from creditors at a much faster rate than younger adults.

“The baby boomers are disproportionately represented in bankruptcy proceedings,” wrote John Golmant and James Woods, who compiled the study that appears in the September issue of the American Bankruptcy Institute’s ABI Journal. Golmant is a statistician and Woods is a social science analyst, both with the Administrative Office of the U.S. Courts in Washington.

Bankruptcy filings are increasing fastest among individuals between the ages of 55 and 64, the study found. From 2002 to 2007, the percentage of filers in that category grew 65%.

By comparison, the demographic group that experienced the largest percentage drop in bankruptcy filings was Americans 25 and younger, down 60% in 2007 from 2002.

“This significant demographic uptick in older bankruptcy filers has outstripped the aging of the general population as a whole,” Golmant and Woods wrote.

The authors said the recent housing crisis is at least partly to blame, as falling home prices left baby boomers with little or no home equity. The study noted that persons older than 50 were often targeted during the refinancing boom in the early part of last decade.

High levels of credit card debt and mounting health care bills also contributed to the higher number of filings among older Americans, the study found.

The recent study shows the continuation of trend stretching back to at least 1994. In that year, people between the ages of 55 to 64 accounted for 7% of all individual filings. In 2007, the same group accounted for 15.2% of consumer bankruptcies.

What if my income makes me ineligible for bankruptcy?

Bankruptcy is a very complex piece of legislation made more complex by the fact that some states have enacted their own versions of what is, essentially, a federal act. Despite having state bankruptcy laws in place, bankruptcy is still petitioned through the Federal Bankruptcy Court system. While it is fairly rare, it is technically possible to be ineligible for bankruptcy because of your income. As I stated, it is rare, however, the legal system is starting to see more people fitting this criteria every week.

So why would income make you ineligible for bankruptcy? To qualify for a Chapter 7 petition for bankruptcy, your income needs to be below the state median. The term ‘income’ in this situation is actually a figure that is determined by averaging your actual before tax income over the proceeding six months. If you had a high income job, and then found yourself out of work, that high income job may push you over the state median – this means your ineligible for a Chapter 7.

The bad news is that on November 1 2011, the median income in all states dropped. For one person households, the drop is only a few hundred dollars per year, but for a four person household, the drop could be as high as $4000 depending on the state you live in. Every state’s median income is derived from data collected by the Census Bureau and with unemployment high it was only natural that median income levels were going to drop. This means that more people are now ineligible to file a Chapter 7 petition than before.

On the other hand, if you are trying to file a Chapter 13 petition for bankruptcy, you may be ineligible due to too little income. In a Chapter 13 petition, you need submit a payment plan that will cover your secured and priority debts as a minimum. If you are not working or you have a very small income, you may not be in a position to submit a plan that adequately covers those debts. The trustee may then refuse to accept your payment plan. As you can see, there is the possibility for a catch 22 situation, technically ineligible for either forms of bankruptcy.

There are options available that an experienced bankruptcy attorney can consider. While you may not qualify for a Chapter 7 petition based on income, but if you are only slightly above median, there is an alternate route whereby your attorney can work through every expense. This route looks at allowable expenses such as car costs, rent, education and medical expenses, which may well modify your income enough to bring you below the state’s median. . You may also qualify for special circumstances, or totality of circumstances – the latter will look at your lost employment to determine if this is going to be a long term situation. After all, if you don’t qualify today, you may well in two or three months when your past employment has a reduced effect on your average income.

There’s a saying we hear a lot in law – “what a difference a day makes.” In law, this is very true. If you file for bankruptcy on a Thursday, you may be ineligible for a Chapter 7 – submit that same petition on the Friday, and you could be eligible. It all comes to the average of your income over the past six months. By waiting one day, you could move from one pay period to another, with the second being unemployment, and that can significantly drop your average income to below the state’s median.

That indeed may well become your final option – waiting. Of course, that is only an option if you have that time up your sleeve. This well depends on your circumstances and the amount of pressure coming from creditors. What is important to note is that bankruptcy law is always in flux. What is true today may not be true tomorrow, especially when judges enter new interpretations of the law. The smartest move anyone can make when considering bankruptcy is to engage the services of an experienced bankruptcy attorney. It is their job to keep up to date with all the latest changes in bankruptcy.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

What debts are dischargeable through filing a Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy is not as generous as a Chapter 13 when it comes to the range of debts that can be discharged. However, there are still a wide range of unsecured debts that can be discharged. One of the most common
debts is that of credit cards, and they are typically the major component of any Chapter 7 bankruptcy petition.

Bankruptcy itself can only ever discharge unsecured debts, so secured loans such as mortgages and car loans will remain no matter which Chapter a debtor decides to file under.

Some of the more common debts that can be discharged include:

· Personal loans including loans from friends, family, and employers

· Credit cards including overdue fees

· Medical bills

· Debt judgments

· Repossession deficiencies

· Auto accident claims except those involving drunk driving

· Business debts

· Monies owed under lease arrangements

· Negligence claims

· Income taxes that aren’t priority taxes

· Tax penalties over 3 years old

When it comes to back taxes and penalties, there are provisions that relate to when you actually filed returns and whether or not fraud or tax avoidance is an issue. While these unsecured debts are discharged through a
Chapter 7 bankruptcy petition, the following debts cannot be:

· Debts not included in the schedules filed

· Recent taxes

· Child or family support

· Criminal fines and/or restitution

· Accident claims involving drunk driving

· Penalties payable to the government other than tax penalties

· Student loans

· Taxes for years where returns were not filed or filed for less than 2 years

A Chapter 13 petition for bankruptcy may discharge some of these debts. Where a Chapter 13 petition does benefit a debtor, is in its capacity to help debtors catch up on overdue debts that cannot be discharged. This may
assist in preventing further action such as jail time for unpaid fines. If you’re in doubt as to which Chapter to file for bankruptcy under, consult an experienced bankruptcy attorney.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a
friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations
packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we
develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Can I clear an IRS debt through bankruptcy?

Generally speaking, taxes are exempt from discharge through bankruptcy. However, in some cases you can discharge an IRS debt using a Chapter 7 bankruptcy filing. The only IRS debts that can be discharged are those that
are over three years old. There are certain conditions that must be met first.

The first condition is one that is attached to most debts. This relates to fraud and, in the case of taxation, tax evasion. Debts that arise out of fraud or tax evasion cannot be discharged through bankruptcy.

Other conditions include when you filed the tax return for the debt. Your return must have been filed at least two years prior to seeking relief through a Chapter 7 filing. There is also a “240-day rule” that has to be taken into consideration.

The “240-day rule” states that the tax debt in question must have been assessed by the IRS at least 240 days before you filed your bankruptcy petition, or it must not have been assessed as yet. Once your petition for
bankruptcy under Chapter 7 has been processed, your debt to the IRS will be discharged.

This effectively wipes out your personal obligation to pay the debt, and prevents the IRS from going after your bank account or garnishing your wages. There is one exception to this – if the IRS has recorded a tax lien
on your property before you filed your petition for bankruptcy, that lien will remain on the property.

Taxation can be a particularly tricky area when it comes to bankruptcy. It is important to seek legal opinion from a qualified and respected bankruptcy lawyer before proceeding with any application. Their advice could save you a lot of heartache and perhaps hundreds, if not thousands, of dollars.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a
friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations
packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we
develop together. You can email my scheduler through our website for your free 30 minute consultation at www.washingtonbankruptcy.com or e-mail directly at [email protected]. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Can student loans be discharged through bankruptcy?

[Category:
Uncategorized]

[Tags: Bremerton
bankruptcy, Chehalis bankruptcy, credit card, Credit Cards, fees, Olympia
bankruptcy, penalty rates, Renton bankruptcy, secured credit
cards, subprime credit cards, Tacoma bankruptcy, teaser rates, variable
rates]

A typical rule of thumb is that student loans and other government and federal debt is non-dischargeable. However, in some cases a debtor may actually be eligible to discharge debt from student loans.

Student loans are almost impossible to discharge in Chapter 7 bankruptcy. The debtor must show actual hardship to discharge student loans. Courts interpret hardship very strictly. If you are able to work, or have another source of obtaining steady income, you probably don’t have sufficient hardship to discharge a student loan in Chapter 7.

In Chapter 13 cases, student loans are not dischargeable if the creditor objects the discharge. There are some schools of thought out there that indicate that student loan creditors usually do not file an objection to discharge in Chapter 13 proceedings. Even if the debt is not fully dischargeable, does not mean all hope is lost. As a practical matter, a Chapter 13 bankruptcy could be used to discharge a large part of student loan debt. Of course, the debtor would be gambling that his case would not be one of the exceptional cases where the student loan creditor does file an objection.

I do not believe most clients should file Chapter 13 primarily to discharge student loan debts. However, I think that the probability of student loan discharge should be considered more than it usually is in pre-bankruptcy planning decisions.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Do I have to include credit cards with a zero balance on my bankruptcy petition?

While bankruptcy is designed to help people escape serious debt problems, the situation becomes interesting when it comes to credit accounts with zero balances. These are typically credit card debts, either through credit card companies or those issued by individual businesses. When filing for bankruptcy, debtors only need to include actual debts, so in theory, they do not need to list those zero balance accounts. The situation becomes a little murkier if these accounts include monthly or annual fees, and those fees will become due during the bankruptcy process.

In most instances, you can leave these accounts out of your bankruptcy petition. You should be aware that your petition for bankruptcy does become a matter of public record and that most credit providers regularly data match bankruptcy petition notices and their own records. While your account may have a zero balance, your credit provider is quite within their rights to cancel those cards to prevent you incurring new debt.

Should your credit provider not cancel those accounts, they will be available to use post bankruptcy. This can help to kick start a new positive credit history post bankruptcy so it is well worth considering paying down any credit accounts with low balances prior to filing for bankruptcy. Paying down those accounts will not guarantee they survive the bankruptcy process, however, it can be well worth exploring the option.

Bankruptcy will, especially in a Chapter 7 bankruptcy, discharge all eligible debt no matter how large or small the balance is. Paying down to zero any low value (less than $200) balances makes sense for a number of reasons, most particularly, having that account survive bankruptcy and available post bankruptcy.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

How many people filed for bankruptcy in 2010?

As an increasing amount of working families fell victim to job losses, plunging home values, and unforgiving creditors, the number of people in the US filing for bankruptcy rose by 9 percent last year. The total number of bankruptcy filings in 2010 was 1.53 million.

The figure was the highest since 2005 when changes in the bankruptcy laws, making it more difficult and costly to file, led to a sharp decline in the number of Americans seeking court protection. The recent spike in cases is indicative of just how desperate large segments of the American population are, despite the official claims of an economic recovery.

Over the last three years, as the economic recession and 2008 crash took hold, 4 million consumers filed for bankruptcy, with last year’s numbers matching the record levels reached before 2005. While most filers earn less than $30,000 and lack a college degree, a growing percentage of families with incomes above $60,000 and college degrees are being forced into bankruptcy.

The growth in personal insolvency last year was seen in virtually every part of the country, according to the American Bankruptcy Institute. The sharpest rise was in the Southwest and Southeast, with Nevada recording 15,000 filings per million, more than double the 6,600 filings per million recorded nationwide. The state has the nation’s highest unemployment rate and credit card and mortgage delinquency, and, according to realtytrac.com, one in every 99 homes is in foreclosure.

After Nevada, Georgia and Tennessee had the highest filing rates, each with more than 10,000 filings per million, according to the report. The states with the highest year-to-year increase were Hawaii (22 percent), California (19 percent), Utah (19 percent) and Arizona (18 percent).

In South Florida personal bankruptcy filings rose by a staggering 40 percent, the Sun-Sentinel reported, with the number of cases in Palm Beach, Broward and Dade counties rising from 24,681 in 2009 to 34,579 in 2010. Local reports attribute the sharp rise to the pace of home foreclosures, joblessness in the state—where the unemployment rate is 12 percent—and a wave of business closures.

Medical expenses are one of the biggest causes of personal bankruptcy, with a Harvard University study carried out before the economic downturn attributing 62 percent of all filings to health care debts. The study noted that 78 percent of those filing bankruptcy had medical insurance.

However, according to the Economic Policy Institute, family health insurance premiums more than doubled between 1999 and 2009, far outpacing workers’ earnings and overall inflation, as employers increasingly dumped the costs of medical care on their workforces.

The sharp increase in long-term joblessness—the direst since the Great Depression—has worsened the situation. More and more families are forced to rely on credit cards to pay for food, utilities and other basic necessities, in addition to picking up the cost of their health insurance.

Increasingly those who still have a job are facing wage cuts and being forced into part-time and temporary positions. In the past, home equity loans—based on the rising value of their homes—could be gotten to offset the decline in income. These are no longer an option as homeowners owe far more than the dwindling value of their homes. The tightening of consumer credit has also pushed people over the edge, after they borrowed in an effort to prevent bankruptcy.

The crisis is affecting every demographic group. A 2010 study from the University of Michigan Law School, “The Rise in Elder Bankruptcy Filings,” found that those 65 and older are the fastest-growing segment of the US population seeking bankruptcy protection, owing a median $22,562 to credit card companies.

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.

Do I have to include credit cards with a zero balance on my bankruptcy petition?

: Uncategorized

: Bremerton bankruptcy, Chehalis bankruptcy, credit card, Credit Cards, fees, Olympia bankruptcy, penalty rates, Renton bankruptcy, secured credit cards, subprime credit cards, Tacoma bankruptcy, teaser rates, variable rates

Many experts believe that we may be headed for another recession. Don’t enter a second recession with piles of debts. I can counsel you on your debts. I am sure that I can be of assistance to you, a family member or a friend as we all know someone experiencing trouble these days even if we are not experiencing our own financial troubles. Please do not hesitate to make contact with me. I emphasize courteous and discrete consultations packed with plenty of information. The life impact of meeting with me in person will be unforgettable. You will enjoy a new peace of mind and a fresh hope for the future with a new roadmap for financial success that we develop together. You can email my scheduler through our website for your free 30 minute consultation at staff1. To schedule immediately, we can be reached at 253-383-1001 M-Th 9am-5:45pm and Friday 9am – 12pm.