Category Archives: Uncategorized

File Your Bankruptcy Remotely, From Home

online bankruptcy attorney

** We are able to handle all cases remotely and telephonically, so even if you are home quarantined, we can still represent you fully throughout the bankruptcy process **This is some text!

In this most turbulent of times, we are here for you, even if you are unable to come to us.

  • We would start by sending you an online questionnaire, which will take 10-20 minutes to complete.
  • We can then have our initial consultations over the phone, where we will discuss the questionnaire, and how a bankruptcy will work for you, given your circumstances
  • You can then (1) email, (2) fax or (3) mail us required documents
  • Then when it is time to file the case, we can have a Zoom, Skype, Google Hangout or Facetime conference to review and sign the documents together.
  • There is one hearing that will need to be held, and at this time the Court is allowing us to hold these remotely as well.

If you are struggling because of COVID-19, or because of any other financial issue, please give us a call today at (616) 920-0555. We are here for you.

 

We’re debt relief agents. We help people find relief under the Bankruptcy Code.

Comments Off on File Your Bankruptcy Remotely, From Home

Filed under Uncategorized

IRS: Offer In Compromise

IRS Offer In Compromise

Offer In Compromise – Doubt as to Collectibility

There are three types of Offer In Compromise (OIC). The most commonly utilized OIC is the “Offer In Compromise, Doubt as to Collectibility,” or OIC-DATC. This OIC is geared towards those individuals who are unable to pay their current tax obligation and wish to settle for a payment that is less than the amount they actually owe.

For OIC-DATC, taxpayers will need to:
— File Offer in Compromise
— Attach financial statements
— Submit supporting documentation to prove the value of their assets, liabilities, and monthly income and living expenses.

Once submitted, the exact time it takes for the entire process varies from case to case, but we see on average it takes somewhere between  4 weeks to 8 months, all depending on who gets assigned as the examiner and the complexity of the situation.

Offer In Compromise – Effective Tax Administration

Offer In Compromise – Effective Tax Administration is reserved for taxpayers who can pay the tax they owe, but it would cause (1) undue economic hardship, or (2) there are other public policy or equity grounds

1) Undue economic hardship

Economic hardship is a consideration for clients who have the ability to pay their tax debt in full, but doing so would place them in severe economic hardship.

2) Public policy or equity grounds

Public policy and equity offers are for situations when “collection in full would undermine public confidence that the tax laws are being administered in a fair and equitable manner.

Offer In Compromise – Doubt as to Liability

The Pro is that this is more straightforward and less negotiation is needed.  The Con is that this is only available when the taxpayers can provide proof as to why the validity of the tax obligation should be questioned.

 

Give us a call at (616) 920-0555, or use the email form below, for information on our Offer In Compromise service.

Comments Off on IRS: Offer In Compromise

Filed under Uncategorized

Can criminal restitution be discharged in bankruptcy?

criminal restitution and bankruptcyUnfortunately no, criminal restitution cannot be discharged in bankruptcy. However, the automatic stay will prevent any creditor or court from forcing a payment while your bankruptcy is pending. This could last up to 5 years.

The Automatic Stay protects clients from any collection efforts, while his bankruptcy case is still pending. 11 U.S.C. § 362(a)(1) of the Bankruptcy Code protects the Debtor/Defendant from any attempt ‘to recover a claim against the debtor that arose before the commencement of the case under this title.”  11 U.S.C. § 362(b) then goes on to list any exceptions to this rule, none of which apply in the present circumstances.

The closest exception comes under 11 U.S.C. § 362(b)(1) which states the stay does not operate as a stay against “the commencement or continuation of a criminal action or proceeding.”  However, In re: Storozhenko, 458 BR 905 (ED Michigan), states “criminal restitution must be deemed to be relief that is civil in nature, not criminal, for the purpose of 11 U.S.C. § 362(b)(1) exception to the automatic stay.  In re: Storozhenko goes on to say “at most, the federal statute would, temporarily (i.e. only until the automatic stay terminates under 11U.S.C. §362(c)), prevent the state court from complying with the state statute that mandates restitution as a condition for probation.

Westlaw’s Keynote #3 for In re: Storozhenko goes on the summarize the case by saying “bankruptcy court’s action did not prevent state court from placing debtor on probation, assuming that state court had determined that probation was appropriate, but merely prevented it from ordering restitution payable to state court receiver as a condition for such probation while stay was in effect.”

This is true for whether a Chapter 7 or Chapter 13 bankruptcy is filed. However, by filing a Ch 13 bankruptcy, you are afforded more time to put together a plan to resolve the debt.

If you are struggling with a criminal restitution payment, and live in West Michigan, please give a call to discuss what we can do to help.

Comments Off on Can criminal restitution be discharged in bankruptcy?

Filed under Uncategorized

Inheritances in Bankruptcy

Chapter 7

Under a Chapter 7 bankruptcy, the trustee looks to the timing of the inheritance. If the inheritance was before filing, any amount on hand at the time of filing will become part of the estate. When it becomes part of the estate, an individual will have to exempt it in order to protect it. Any portion of the inheritance that is nonexempt will allow the trustee to take it and distribute it to creditors. If an individual is entitled to receive an inheritance 180 days after filing the bankruptcy, the inheritance will not become part of the estate and the trustee will have no claim to any of it. However, if an individual is entitled to receive an inheritance within 180 days of filing for bankruptcy, they will need to amend their bankruptcy paperwork regardless of whether the court closed the case or not. Similar to an inheritance prior to filing for bankruptcy, the inheritance will need to be exempted through an amendment, if it cannot be exempted then the trustee will be able to take that portion and distribute it to creditors.

Chapter 13

Under a Chapter 13 bankruptcy the individual may still need to exempt the inheritance, similar to a Chapter 7. If the case is a 36-month ACP, then if the client becomes entitled to receive the funds after successfully making payments for 36 months, then the inheritance becomes the clients. A case becomes a 36-month if they pass the means test and were eligible for a Chapter 7, but regardless, filed a Chapter 13.

In any other scenario, the client will need to exempt as much of the proceeds as possible, then put forth an application outlining what unexpected expenses they have to retain the inheritance for, much like they would for a tax refund.

Comments Off on Inheritances in Bankruptcy

Filed under Uncategorized

Chapter 13 Bankruptcy: Liquidation Analysis

In a Chapter 13 Bankruptcy, if you are unable to exempt all of your assets, you will need to perform a liquidation analysis (LA).  The purpose of a liquidation analysis is to ensure the general unsecured creditors are receiving at least the amount they would be receiving if the unexempted assets were liquidated in a Chapter 7 bankruptcy. As such, cost of sale, trustee’s compensation, and priority debts are to be taken into consideration.

For example, let’s say that a client has $5,000 in unexempted assets and owes $1,500 to the IRS. Under this scenario, the Chapter 7 trustee’s fee would be 25%, reducing the amount to be actually distributed to $3,750. Of that, the first $1,500 will go to the priority class of creditors (IRS), leaving the remaining amount of $2,250 available for the general unsecured creditors. Therefore, $2,250 would be the result from the LA.

If we were dealing with a home where some of the equity is not able to be exempted, you may also deduct the cost of sale, typically 6% of the FMV.

For more questions about Bankruptcy or the Liquidation Analysis, please give us a call at (616) 920-0555.

Comments Off on Chapter 13 Bankruptcy: Liquidation Analysis

Filed under Uncategorized

Chapter 13 Bankruptcy: Save the Home

When an individual falls behind on their mortgage, they have the benefit of filing for a Chapter 13 bankruptcy in order to prevent a foreclosure. A unique feature of a Chapter 13 bankruptcies is that junior mortgages, a second or third mortgage, can be eliminated if the house is worth less than the balance of the first mortgage. How this works, when an individual gets behind on their mortgage payments. The first mortgage could start a foreclosure procedure. Instead of going through with the foreclosure, that individual can file for a Chapter 13 bankruptcy, thereby stopping any foreclosure proceeding.

Additionally, if the individual’s home is worth less than the first mortgage, any junior mortgages would not receive anything from that potential foreclosure. Under a bankruptcy, those junior mortgages would be considered “wholly unsecured” and as such they could be stripped. Those junior mortgages would be treated the same as other unsecured debts and at the end of the bankruptcy, would be discharged the same as the other unsecured debts. At the end of the bankruptcy, the lien for the junior mortgages would be removed from the individual’s property and the individual would no longer need to worry about having multiple mortgages on their properties.

Comments Off on Chapter 13 Bankruptcy: Save the Home

Filed under Uncategorized

Chapter 13 Bankruptcy: What is a Cramdown?

 A “cramdown” essentially reduces the principal balance of a secured debt from the outstanding loan amount down to the Fair Market Value. This is most often used with car loans, mobile home loans, household goods, and other personal property in a Chapter 13 Bankruptcy. This will allow an individual to pay the fair value of the property and the remaining balance would be lumped into other unsecured debt.

The most common example is a vehicle, if the vehicle is work $6,000 but there is a $13,000 loan on the vehicle, the individual would be required to pay the $6,000 as secured debt and the remaining $7,000 would be seen as unsecured debt which would be paid in proportion to all other unsecured debt. Any portion of the unsecured debt that was still due and owing on the loan would be discharged at the end of the bankruptcy.

The huge benefit of cramming down the loan is to be able to reduce interest rates, reduce the amount owed, stretch payments out over a longer term, and lower the monthly obligation. This “cramdown” is allowed in Chapter 13 cases, as opposed to a Chapter 7. In order to utilize this process, the loan must have been acquired at least 910 days prior to the bankruptcy. This way, an individual who goes out and buys a new car and acquires a loan cannot turn around and file for bankruptcy in order to lower the loan.

If you have questions about this process, or if you want to know what Russell can do for you, feel free to give us a call at (616) 920-0555.

Comments Off on Chapter 13 Bankruptcy: What is a Cramdown?

Filed under Uncategorized