There are two concerns regarding tax refunds in bankruptcy. Depending upon whether you are in a Chapter 7 or a Chapter 13, those concerns are slightly different.

Chapter 7

Tax Refund Already Received—A tax refund you have already received prior to filing, but have not yet spent, is part of the bankruptcy estate and treated like cash. You may be able to use exemptions to protect the money.

Tax Refund Expected—A tax refund expected but not yet received is also part of the bankruptcy estate to the extent it relates to income earned prior to the date you filed your Chapter 7 bankruptcy. As a worst case scenario you will be required to turn over the return to the trustee. However, your bankruptcy attorney can also use exemptions to protect the expected tax refunds in bankruptcy, the same way you can protect money that is in a savings account. The important thing is to disclose the expected return and exempt it in the bankruptcy filing.

Tax Refund For Years After The Filing—A tax refund received for income earned during a tax year after the year you filed bankruptcy (and all future returns) are yours to keep. They are not part of the bankruptcy estate.

Chapter 13

Tax Refund Already Received—A tax refund you have already received will be treated as an asset. While the trustee may not take the tax refunds in bankruptcy, any assets you own play a role in determining the amount you will ultimately pay to creditors in the Chapter 13. The refund, if it can not be exempted, may bump up your Chapter 13 payment.

Tax Refund Expected—The safe assumption regarding tax refunds in an ongoing Chapter 13 is that they will become property of the trustee. While you may use exemptions to protect an expected return, the typical Chapter 13 plan is 36 to 60 months.

Tax Refund For Years After The Filing—The same answer as directly above applies here.

What Can I Do To Plan Around This?

In a Chapter 7, you can spend your tax refund or make sure to put your attorney on notice that you expect to receive a return and be sure to exempt it or postpone filing until the asset has been spent on allowable items.

In a Chapter 13, tax refunds in bankruptcy represent an ongoing issue and the easiest way to manage it is to reduce your withholdings so that you’re receiving more in your paycheck on an ongoing basis rather than ‘storing’ up money with the IRS which will result in a large return.

If you do receive a refund in a Chapter 13, disclose the return each year to the trustee. Each trustee’s policies (in different districts) differ. If you can show that you need some or all of the return for necessary expenses like home repairs or vehicle repairs, you may be able to keep some or all of the return. Your bankruptcy attorney should assist you in making this disclosure to the court, together with the argument that you have a need to use the return vs. it going to the trustee.

Get Answers

Call a Charlotte bankruptcy attorney today and get your questions answered. You can begin planning today for a successful bankruptcy in the future. 704.749.7747. The call is free and I’m here to help.

The Layton Law Firm offers free personal injury consultations in our Charlotte office or by phone. Typically, during the consultation, the attorney will ask you to explain the event leading up to the injury, the injury itself, and the treatment for the injury to date.

As the client in a Charlotte personal injury consultation, your goal is to decide whether the attorney is competent, and whether you want to work with that attorney. There are several personal injury attorneys in Charlotte who all do an extremely well job representing their clients—finding the right fit for you is key.

What Can I Establish During My Consultation?

You can establish the attorney fee schedule during the consultation. You should also be able to get a general idea of the time frame the attorney believes will be required to review your case. If the attorney takes the case, he should be able to clearly explain to you the timeline for working together—when do you expect treatment to end, how long does it take to get out a demand letter to the insurance company, at what point will you know if you need to file a lawsuit, etc.

Questions You Should Ask

I always encourage personal injury clients in a consultation to voice their biggest concerns. The responses mainly relate to whether the firm is willing to file a lawsuit if necessary, and what happens to medical bills during the life of the claim or case. It’s important to get comfortable with these concepts prior to deciding on a Charlotte personal injury attorney.

Schedule A Consultation

If you’d like to speak with an attorney, call 704.749.7747. The call is free. Or, you can complete a quick form and we will contact you to set up a convenient time to have your consultation and explain the process. You can complete that form HERE. We’re here to help.

Exemptions in bankruptcy are used to protect property that the client owns or recently sold or transferred. Planning to use exemptions in bankruptcy may dictate waiting a little bit to file, depending upon the value of the asset or the type of transfer that was made.

Exemption planning is perfectly legal and is akin to tax planning—arranging your financial life to take advantage of the laws available to protect your property.

Homestead Exemption

The homestead exemption gives you up to $35,000 in exempt equity (Fair Market Value minus Mortgages). If the client acquired the property within 1215 days of filing for bankruptcy, the bankruptcy attorney may recommend waiting out the remainder of that period.

Spending Excess Cash

For the few bankruptcy clients who have cash in excess of what is allowed in bankruptcy, your bankruptcy attorney may recommend spending down some of the cash prior to filing. So long as the cash is spent on non-luxury items, this is perfectly fine and converts cash to usable items like food, household goods, clothing, etc. Cash that has been converted to household goods can use the household goods exemption in the bankruptcy filing.

Recent Transfers

Transfers made within the last two years to non-family members and non-friends, are subject to review by the bankruptcy trustee. The same is true of transfers to family members and friends (Commonly known as “insiders”) and requires a four year wait period to be outside the reach of the trustee. Exemptions in bankruptcy can be used to exempt these transfers but waiting out the period may be the client’s best bet.

Recent Credit Card Use

If you’ve used your credit cards within 90 days of filing to purchase goods of $550 or more with one creditor, under 523(a)(2)(C), there is a presumption that the purchase was fraudulent—in other words, you knew you were going to file bankruptcy when you made the purchase. The same is true of cash advances in excess of $825 if made within 70 days of filing.

These presumptions are rebuttable, meaning the attorney can argue that the specific facts dictate that the debt should be discharged, but waiting a few more weeks to file is usually a much safer bet.

Tax Refunds

If you expect a tax refund, that money is already part of your bankruptcy estate. It’s an asset that you have to protect. However, if you wait to file until you’ve received the refund and spent it on non-luxury items, you can file bankruptcy without worrying whether the court will try to take your refund.

Call An Attorney

If you have any questions about exemptions in bankruptcy, the timing of filing, or anything else related to debt and bankruptcy, please call me at 704.749.7747. I’m here to help and the call is free.

If you are trying to decide on a Charlotte personal injury lawyer, there are a few things to consider. Most all Charlotte personal injury lawyer contracts will cover the same provisions in terms of a contingency fee paid to the lawyer. This is the classic “We don’t get paid if you don’t get paid.”

Charlotte Personal Injury Attorney Reviews

In addition to making sure the personal injury attorney’s fees are fair, you may want to look at Charlotte personal injury attorney reviews online. Google and Yahoo are the most respected review sites and you can typically find personal injury attorney reviews for attorneys in your area. Finding an attorney whose personality is compatible with yours is important. Lastly, you’ll want to make sure the lawyer and the lawyer’s office communicates with their clients regularly about the personal injury case. Don’t be afraid to ask them how often you’ll hear from them.

Establishing A Timeframe

A Charlotte personal injury attorney should be able to give you a general timeline for how long it will take to reach certain milestones in your personal injury case. Typically, the law firm makes sure you’re following physician’s directives, communicates regularly with your physicians, and makes routine requests for updated information from the doctor treating your injury. Once you’ve completed treatment, the personal injury attorney can begin to put together a claim on your behalf.

Your Personal Injury Claim

Your personal injury claim will consist of a number of components, from loss of enjoyment of life, to medical bills. One important aspect of maximizing your outcome in a personal injury lawsuit is negotiating with doctors to lower their bills. Your Charlotte personal injury lawyer will do this on your behalf, typically once you get close to settlement with the insurance company.

Will Your Personal Injury Lawyer Go To Trial?

Most cases do not go to trial; however, it’s important to hire a personal injury attorney whose firm is willing to try cases. This gives the law firm greater negotiating power with insurance companies, and gives you the confidence you need to know that the firm can litigate if necessary. Any personal injury law firm will need to study the facts, the physician’s findings and other relevant information prior to committing to taking a case to trial for you.

If you have any questions about personal injury or are interested in speaking with a Charlotte personal injury lawyer, please call me at 704.749.7747. You can also fill out a short questionnaire here and we will call you today. We’re here to help.

Keeping your car in bankruptcy is important, especially if it’s a reliable car and you’re looking forward to the day you pay it off. Fortunately, the rules of bankruptcy typically allow for you to keep your vehicle and successfully file a bankruptcy.

Valuing The Car

Your bankruptcy attorney may ask you to take your car to get it appraised at Carmax or another qualified dealer. This will help establish value for the purpose of disclosing information about your car when you file bankruptcy.

You’re trying to determine the equity in the car, which is quite simply the Retail Value minus Existing Loans/Liens. So, if your car has a retail value of $12,000 and you owe $10,000, you have equity of $2,000. This equity is an asset that you own.

Exempting Your Equity

The next step is to use your bankruptcy exemptions to assist you in keeping your car in bankruptcy. The federal rules of bankruptcy give each individual filing a bankruptcy a $3,500 automobile exemption to be used against one vehicle titled in their name. In the case above, there is only $2,000 of equity, so the exemption would more than cover the equity in the asset (vehicle) and the bankruptcy court cannot touch your car in bankruptcy.

Equity Exceeding The Automobile Exemption

If you have equity above and beyond the $3,500 allowed for automobiles, you can use some of your Wild Card Exemption ($5,000 per person) to cover the additional equity in any asset.

Purchasing A New Car Prior To Bankruptcy

Generally speaking, while keeping your car in bankruptcy is an option, you can also trade in your vehicle on another vehicle shortly prior to filing. This may be one way to deal with excess equity and address a vehicle that needs to be replaced. This transaction is considered a transaction you make in the normal course of living and with the proper guidance of a bankruptcy attorney, will not cause you any problem if you file shortly after.

Call A Charlotte Bankruptcy Attorney

If you have any questions I can answer about bankruptcy, assets or bills collectors, please feel free to call me at 704.749.7747. The call is free and I’m here to help.

Auto Accidents And Fault        

If you’ve been injured in an auto accident in North Carolina, it makes sense to talk to a personal injury attorney about it. While North Carolina can be a rather difficult state to recover as a personal injury plaintiff, if you have an experienced lawyer and law firm, you can achieve a good, fair result.

Contributory Negligence In North Carolina

Every state’s rules for recovery in a negligence case are different. North Carolina follows the common law rule of contributory negligence. This means that if a plaintiff is even 1% responsible or at fault, they are barred from recovery. A simple example in an auto accident would be you were rear-ended but you had come to a sudden stop at a green light for some reason.

Practical Application of Contributory Negligence In North Carolina

While the 1% rule is an obstacle for plaintiffs in auto accidents in North Carolina, it is not insurmountable. First, the rule anticipates a jury finding the plaintiff 1% at fault. Juries are unpredictable and as a result, most personal injury claims never make it to a jury.

While the defendant’s attorney will almost always raise the contributory negligence in North Carolina as part of their defense, the net result is typically that it’s being used to lower the number in a dollar negotiation with the plaintiff’s attorney. Most defendants are not prepared to test the theory with a jury, and negotiations resume.

Don’t Let Contributory Negligence Deter You

Even if you believe you may have been at fault in some way, don’t let that deter you from reaching out to a personal injury attorney. It may be that your behavior doesn’t amount to fault, and the attorney will be able to tell you that. Additionally, experienced personal injury attorneys take cases in North Carolina every day where the plaintiff contributed in some small way to a much larger injury sustained at the hands of the defendant’s negligence.

If you have questions or would like to speak with a personal injury attorney in Charlotte, please call me at 704.749.7747.

While a withdrawal from a pension plan or IRA may be taxable income, they typically do not cause a problem in filing a bankruptcy. Regarding whether continued withdrawals should be included in income in a Chapter 13, clients can argue that the remaining retirement funds are needed for retirement.

Disclosure Is Key

The balance of an IRA or pension plan should be treated as an asset and disclosed as such in the bankruptcy petition. The federal bankruptcy rules provide an exemption for IRA funds and pension funds however, so those funds are a protected asset outside of abnormal activity.

IRA Disbursements In A Chapter 7

When you change the character of IRA funds or pension funds by making a withdrawal from the fund and placing the funds into your personal checking or savings account, those funds enter the bankruptcy estate. Like all other funds that enter the bankruptcy estate, you and your attorney will work to protect them by either using the wild card exemption, showing the funds were used for normal living expenses, or exempting the asset you purchased with the funds (Household furniture, etc).

You Deserve To Protect Your Retirement

The fact that the bankruptcy rules allow for exempting retirement funds goes toward a showing that the goal of bankruptcy is not to take everything the client owns, in exchange for forgiving their debt. Instead, the goal is to position the client in such a way that after the bankruptcy they have a reasonable chance at financial success.

Call A Bankruptcy Attorney

If you have any questions, please call me at 704.749.7747 I’m happy to answer questions and the call is free.

In a story published by CNN here, it is being reported that the federal government is wielding a heavy hand when it comes to debt collectors. As a Charlotte bankruptcy attorney, I often hear the horror stories clients have regarding debt collectors. Too many times, clients are bullied into making payments on a debt based on lies or vague statements by debt collectors. Taking steps to put an end to calls from debt collectors is easy:

What Should You Do?

If you’re being harassed by debt collectors, is could just be they are doing their job—contacting you to ask for money that you owe them. On the other hand, as the link above indicates, quite often the consequences for not paying are not near as dire as the person on the other end of the phone alleges.

Ask Questions

While it is a frightening experience receiving a call from an aggressive debt collector, just take a deep breath and ask questions. You’re allowed to do that. When a debt collector won’t answer questions about their company, the debt, or what legal action has been taken, it’s a good sign that you’re being bullied.

Buy Some Time

One thing you can always do is buy some time—time to talk to an attorney. Once you’ve taken down all relevant information about the debt and the debt collector, reach out to a Charlotte bankruptcy attorney and tell them your story. The attorney should be able to assist you in researching the debt collector’s information and confirming the status of the debt and any legal action that has been or hasn’t been taken.

Understand Your Options

While we all have a desire to pay back our debts, there are instances where it’s just not an option any longer. Loss of income due to job loss or personal injury often create situations where we just don’t have the means. The federal rules of bankruptcy offer aggressive relief in those situations. A brief conversation with a Charlotte bankruptcy lawyer can put you at ease and help you decide what to do next.

Free Phone Consultation

If you’d like to speak with an attorney about your finances, please call me at 704.749.7747. I’m here to help.

In many personal injury cases, there are damages to property. Clients commonly ask whether the law firm will be paid out of the proceeds for property damages in personal injury claims.

You Have A Choice

While the standard personal injury agreement between the client and the personal injury attorney dictates that the law firm receives roughly 1/3 of the settlement, there is an exception for property damages in personal injury. You can often negotiate the property damage element of your personal injury claim on your own and avoid any attorney’s fees.

If the attorney does handle a standard property damages claim, it does not typically make sense to pay the firm 1/3 of the recovered amount—you’re left with less than what you deserve. We typically offer to handle property damages in personal injury for a flat rate, if the client desires.

Automobile Damage

The most common example is regarding property damages in personal injury is damage to an automobile. In that case, the bluebook value is commonly known or discoverable and the client can feel confident they are getting an appropriate settlement for the vehicle without the help (and fees) of the attorney or law firm. Additionally, when there is an established value like Bluebook, there is not much negotiating the law firm can do on your behalf to dramatically increase what the insurance company is offering.

Other Property Damages In Personal Injury

Alternatively, if the property that was damaged was intangible (reputation, loss of business) or not as easily defined as a bluebook value (an antique, a collectible), you may consider having the law firm handle the property damages in personal injury on your behalf.

The law firm will only suggest handling property damages in personal injury if it is going to make sense to you, in the long run. Some clients simply feel more comfortable paying a flat rate to have the peace of mind that a lawyer assisted in handling the claim. This is important for a few reasons: 1) knowing the full value was recovered, and 2) insuring that the client doesn’t unknowingly and mistakenly settle any additional rights for bodily injury when negotiating the property damage claim.

Call An Attorney

If you have any questions about property damages in personal injury, please call for a free consultation. Most consultations can be done over the phone and you deserve answers. 704.749.7747.

While your attorney will do the work putting together your demand, it’s important to have a cursory understanding of damages in a personal injury case. Depending on the type of behavior that led to the injury, the damage claim will differ slightly.

Compensatory Damages

Generally speaking, your attorney will work together with your physician in an attempt to quantify what are known as compensatory damages in a personal injury case. Essentially, the theory behind compensatory damages is you’re asking for an amount which is meant to make you whole again. Not only will your demand include a demand for medical bills and treatment associated with those bills, but any other amounts designed to reflect what you’ve been through as a result of the accident.

Additionally, your damages claim will reflect your physician’s opinion as to whether you will reach full recovery. Quite often this aspect of the claim is known as loss of enjoyment of life. If you’re not the same and never going to be the same as you were prior to the accident, your attorney will put a dollar amount on that.

Punitive Damages

Many clients and lawyers are intrigued by large settlements in personal injury cases. Quite often, those large settlements have a Punitive Damages element to the claim being made. That is, if the behavior of the defendant rises to the level of intentional or if the defendant is held to a higher standard of care than other defendants, a punitive damage claim is intended to deter the defendant from engaging in the behavior in the future.

Discuss It With Your Lawyer

Negligent acts give rise to compensatory damages when the plaintiff has been harmed. If the behavior can be shown to rise above negligence, punitive damages can often be assessed in addition to compensatory damages. Call a personal injury attorney today to discuss your case to make sure you’re protected, and to get a better understanding of the process. I can be reached at 704.749.7747.