While you may be eligible to file a Chapter 13 or Chapter 7 bankruptcy, the first question is determining in which state you are entitled to file. In legal terms, this is a question of “Venue.” The bankruptcy statute related to venue is 28 USC 1408. Below is a summary of the statute and an easy test for determining your eligibility.

The Statute

28 USC 1408 establishes the proper venue (location) for filing your bankruptcy case. In the case of individuals, your residency and the location of your assets are used to make this determination. The statute dictates that the proper venue is any place where the debtor has resided more than any other place in the 180 day period prior to filing.

An Easy Test

There are two ways to ask the residency question. If you can answer yes to either question, more than likely you can file in North Carolina.

#1: “Have you lived only in NC for all of the last 180 days?”

#2: “If you believe you have lived in 2 or more places during the last 180 days, then out of the last 180 days, have you lived in NC at least 91 of those days?”

Remember that it takes some time to prepare a filing. If you are coming up on the 180 day or the 91 day mark, you can begin preparing to file. Your attorney will assist in filing at a time when proper venue is established and you can take advantage of the local rules and local venue.

If you have questions about residency, location of property, or anything else related to bankruptcy, please feel free to call me at 704.749.7747. My job is to answer questions.

Often, a specific event in your life leads to the filing of a bankruptcy. If the event gives rise to loss of work, you’re unable to pay our bills. If the event gives rise to insurmountable bills, you may be unable to maintain your monthly debts no matter how hard you work. In the case of a personal injury, quite often both are true: you are faced with medical bills and you’re unable to work. A pending personal injury claim doesn’t mean you can’t file bankruptcy, or that you will necessarily lose the award if you win your claim.

When you file bankruptcy, a ‘bankruptcy estate’ is created. It consists of all the property you own. At the time of filing, the potential award from a personal injury claim—whether filed or not—is considered property for the purpose of the bankruptcy estate.

Will The Bankruptcy Court Take My Award?

In a bankruptcy, federal and state laws allow for certain types and amounts of property to be exempt from claims by the trustee and creditors. Once the debtor has filed for bankruptcy, the debtor no longer owns that cause of action: the claim has become property of the bankruptcy estate. Sometimes, the trustee in effect steps into the shoes of the debtor and will hire an attorney to handle claim. The relationship that the trustee has with the personal injury attorney is a standard attorney-client relationship, including the customary contingency fee arrangement in a personal injury case. Other times, the bankruptcy trustee abandons the claim if he decides there is nothing in it for your creditors. At that time, you can pursue your own claim with your chosen attorney.

Regardless, the award must be disclosed to the bankruptcy court. Once damages have been awarded, they get apportioned in the following order: the personal injury attorney subtracts his fees, the exempted amount goes to the debtor, the trustee (potentially) takes his percentage of the award, and the creditors who have submitted proofs of claims get their portion. Any remaining money goes back to the debtor.
Different Damages Are Treated Differently

The amount of money from the settlement that you’re able to keep depends on the character of the award. Pain and suffering, disability and mental anguish are treated differently from financial losses suffered due to the injury, like medical expenses, damaged property, or lost wages. Your attorney will choose federal or state exemptions for you depending upon which choice is going to result in you retaining more of the award.

In Conclusion

If you’re facing overwhelming financial stress and you’re putting off bankruptcy because you fear you will lose your personal injury award, speak to an attorney today. The bankruptcy court is a court of equity and the goal is not to take all of your assets. You attorney can assist in proper disclosure of the claim and further assist in choosing the exemptions which are most suited to helping you retain more of your award due to the injury.

Call 704.749.7749 today or email me HERE , to speak to me about bankruptcy, personal injury, or any other financial concerns you may have. There are options. I’m here to assist you in determining those options, and to help you move forward productively.

It’s Tax Time

It’s tax time. You know you’re going to owe, and you also know you don’t have the money to pay the IRS what you’ll owe them. It may seem like a necessary and even strategic move to not file your return. The bankruptcy court requires you file your tax returns, and excludes the discharge of tax debt associated with unfiled returns.

Today’s Decisions…

Like almost every other financial decision we make, a future bankruptcy filing may be affected negatively by a failure to file. A failure to file on time generally will not preclude the discharge of this tax liability provided all other requirements are met. However, if the IRS takes an aggressive approach in response to your non-filing and assesses you a tax burden by a process commonly known as “substitute for return,” the tax burden is considered exempt from future discharge.

While it’s always smart to file your return when it’s due, it’s also understandable when we’re unable to do what’s best. The key in terms of preserving the ability to later discharge the tax debt in bankruptcy is to file a voluntary return prior to the IRS instituting the substitute for return on the debt. If the IRS beats you to it, even a later voluntary filing of a return by you will not undo the exempt nature of the tax debt.

Find Out Your Options

Talk to your tax preparer today about your upcoming tax filing. You can receive an extension for the April filing until October. As you approach October, you can decide whether you can pay the amount owed, or whether you want to apply for monthly installment payments– or a combination of both.

If you have back taxes which are currently unpaid, call the IRS at 800.829.1040 today, to ask for updated information on the account and to find out what your payment options are.

Talk To An Attorney

The relief provided by the bankruptcy code is strong. By educating ourselves, we are enabled to utilize that relief to its fullest extent. If you have questions, call me today at 704.749.7747 and I’ll be happy to give you guidance around taxes or any other financial issue you’re facing. It’s what I’m here for.

Clients considering filing a Chapter 13 bankruptcy are often confused when the discussion with their attorney turns to a comparison between a Chapter 13 and a Chapter 7. The debtor has already decided to file a Chapter 13, so why does the attorney keep talking about Chapter 7, and specifically, the Bests Interests Of The Creditors? There’s a reason.

A Necessary Comparison

When filing a Chapter 13 bankruptcy, your plan will only be confirmed if it meets the Best Interests Test. This test is designed to insure that creditors receive treatment in the Chapter 13 bankruptcy equal to or better than the treatment they would have received if the debtor had filed a Chapter 7 bankruptcy. This comparison is also a great way to confirm the debtor understands the clear differences between the two types of filings.

A Hypothetical

Assume a debtor has assets valued at $3000. Further assume a debtor filed a Chapter 7 and $1000 of those assets would be treated as unprotected (non-exempt) assets. In a Chapter 13, if the debtor wants to keep the assets, the unprotected  value of those assets—the $1000—must be paid into the Chapter 13 in order to meet the Best Interests Test. These payments would go to unsecured creditors, as directed by the Trustee.

Best Case Outcome

This does not mean that every Chapter 13 filing requires a similar payment to creditors. If the hypothetical Chapter 7 calculations result in 0 unproteced (non-exempt) assets, then the debtor’s plan will be approved in Chapter 13 without a payment to unsecured creditors. This is often referred to as a “0% Plan” and it is acceptable under these circumstances.

Talk to an attorney today. Bankruptcy is not meant to be overwhelming. It can be a critical part of your solution and financial stability. An attorney can assist in working through these concerns and providing clear, concise options to help you move forward. Email me HERE or call 704.749.7747 today to talk to me.

I spoke with a law firm in Charlotte today the specializes in representing banks in foreclosure proceedings. I was calling about the property of a client. I was told that my client’s foreclosure had been postponed from January until April. I was also told that Wells Fargo had already postponed over 200 foreclosures today. This is obviously a relief for my client, as it gives her time to plan. If you are given unexpected time like this, there are numerous way to use it.

Prepare For The Worst

While you may attempt to pay your mortgage arrears over the coming months, you should also provide a bankruptcy attorney with all necessary documents in the event you need to file a bankruptcy urgently as the new sale date approaches. It’s much easier to insure a proper filing when the law office has time to review documents thoroughly with you, and a proper filing is what you need.

Take A Step Back

This is a great time to take a step back. If you were previously considering filing a bankruptcy to stop a foreclosure, perhaps you were making an emotional decision. There are times when it makes sense to walk away from a home rather than do everything possible to save it. The market may have turned and now the home is worth less. Or perhaps your payments went up and you can’t refinance. Take a breath and ask yourself whether the home is still a good investment for you. And don’t forget there are other ways to invest your money outside of a mortgage payment.

Take Action Today

With this new breathing room, the temptation is to put of the inevitable decision-making that a deadline forces on us. Instead, take out a pad of paper and strategize about ways to significantly reduce your monthly burdens over the coming months prior to the foreclosure and/or bankruptcy filing. For example, if you can lower your car payment by getting into a different vehicle, doing it before the bankruptcy is much easier than during or after.

Listen To Your Attorney

Let your Charlotte Bankruptcy lawyer help you make a smart decision that will work for you not only this month or the next few months, but for years to come. This may involve keeping the home, it may involve a strategy that utilizes income and credit in a way you had not anticipated. The point is, the attorney is in a unique place to give guidance. An attorney who cares about your needs over his own will walk you through options that may not involve bankruptcy, so make sure to ask about those.

If you’d like to speak with an attorney please call me at 704.749.7747. You can also email me HERE. I’d be happy to discuss your situation and offer guidance.

If you’ve received a Notice of Hearing Prior to Foreclosure in the mail, your rights are about to be affected. This notice means that the bank holding a mortgage on your home is moving forward with the foreclosure process and forgiveness of debt bills that come along with it. There is still time.

Your Hearing

The notice tells you when the hearing is and that you have a right to appear before the court to show cause as to why the foreclosure should not take place. Unless you can show the bank does not have a valid deed of trust, or that they have not followed the required process for foreclosure, there is little chance of success in putting off the foreclosure. But you do have options.

Structured Repayment

You are behind in your mortgage payments, so a Chapter 7 bankruptcy is not available if you desire to keep the house. However, a Chapter 13 bankruptcy is an option. In a Chapter 13 bankruptcy, you repay the arrears on the mortgage over the course of the next five years. Additionally, you will pay back some debt to other creditors. Lastly, you’ll be forgiven the remainder of your unsecured debt (Credit cards, medical bills, etc).

Monthly Payments

The exact amount of your monthly payment in a Chapter 13 depends upon your income, your debt, and how your creditors would theoretically fare in a Chapter 7. The monthly payment will also include an amount to the bankruptcy trustee and the bankruptcy attorney if you have not already paid the attorney in full. It may sound complicated, but the bankruptcy attorney can help you make sense of it.

Automatic Stay

By filing a Chapter 13 bankruptcy petition, you put a ‘freeze’ or an automatic stay on the foreclosure process. Your Charlotte bankruptcy lawyer can assist you with this process. The stay will take affect so long as the petition is filed 10 days after the sale date or before. During the automatic stay, you and your attorney will propose a repayment plan in Chapter 13 which will provide you significant relief from credit card and other unsecured debt, and will allow you to get current with your mortgage and preserve home ownership.

If you’d like to speak to an attorney about filing a Chapter 7 or a Chapter 13, please call me at 704.749.7747 to discuss your situation. A call today could lead to a positive change tomorrow.

Family loans, pending lawsuits, recent payments, and transfers of ownership… the list goes on. All of these and more need to be disclosed to your bankruptcy attorney. My first job as a Charlotte bankruptcy attorney is to convince my clients that disclosure is in their best interest. I often tell them that in exchange for their honesty and full disclosure, the bankruptcy court offers very powerful relief from financial burdens and the stress they produce.

What’s So Important About Disclosure?

The bankruptcy court is a court of equity. While there are rules, there is also discretion to be exercised by the trustee. The bankruptcy petition gives the client every opportunity to disclose any items which could be construed as assets or income. Together with her bankruptcy attorney, hopefully the client can manage the disclosed income and assets in such a way that the client still qualifies. However, if an issue is not disclosed and the trustee discovers it at the face to face meeting with the client, the client will most likely pay a price for the failure to disclose.

What Happens Next?

If the trustee discovers during the 341 Meeting that there was a failure to disclose, you can count on the trustee heavily scrutinizing all other assets and information on the petition and schedules. This may trigger a request for information related to the client’s financial affairs that goes back further than the typical inquiry the court makes.

Additionally, the client may lose the right to include an item in their bankruptcy estate if it’s not disclosed. For example, if a client has the right to file a lawsuit but fails to disclose that right as a potential asset during the bankruptcy, the client may lose some or all funds they recover in the lawsuit if they are successful, even if the lawsuit is filed after the bankruptcy has concluded (after discharge of debts).

How Will I Know What To Disclose?

My job as a bankruptcy attorney is to educate my clients, and to ask the right questions. I will help you think about ‘income’ in ways which include money given by family to help you through a tough time. I’ll help you to generate a complete list of all items the bankruptcy court may consider to be assets, even though you and I may not traditionally think of them that way: potential money from a lawsuit, a pending tax refund, recent debt forgiveness, etc.

Bankruptcy Rules Are Reasonable

Bankruptcy is about giving individuals a fresh start. You’ll find the process is smooth and the rules are reasonable. Your job is to disclose, disclose, disclose. My job is to make sure I have all the relevant information and then assist you in successfully filing and leaving the burden of financial stress behind.

Financial stress can be overwhelming. I’m here to help. Call 704.749.7747 to discuss your options. The call is free and confidential. If you’re wondering if you qualify, take a few minutes to submit an online Bankruptcy Evaluation and we will call you with the results.

The things you do today affect a future bankruptcy filing. The right time to talk to an attorney about bankruptcy is now, even if you think you may not file for a few months. Here are a few great reasons to talk to a bankruptcy lawyer today, instead of waiting until the eve of filing.

The Conversation Is Free

Most bankruptcy lawyers are willing to have a conversation about bankruptcy for free. This includes a discussion about the specifics of filing, but you’re also allowed to ask questions about your finances and how to manage them today, in case you do file in the future. Don’t feel obligated to commit to filing. The lawyer’s office is there to help you make a decision, but the decision is yours.

Today’s Transfers Affect Your Future Filing

Transferring property affects a bankruptcy filing for a minimum of six months and sometimes up to two years. This includes title to vehicles, money in bank accounts, interests in life insurance and title to property conveyed by deed. If you talk to an attorney today, the lawyer can assist you in achieving your goals with the transfer, without upsetting your ability to file a bankruptcy if you need to down the road.

Knowing Your Options Brings Peace Of Mind

In my experience, understanding my options is a big part of feeling comfortable about what the future holds. While you may find a way out of this financial bind, at least you know what to do if things get too much to bear. And, you’ve established a relationship with an attorney which is always much better to do when you’re not rushed to make a decision.

Filing Bankruptcy Costs Money

As much as I wish it weren’t true, it costs money to file a bankruptcy. When you’re considering a situation that involves inability to pay existing bills, it makes sense that some planning may be required to have the money available when it’s time to file. A bankruptcy attorney will be glad to help you strategize about how to obtain the money needed to file. This may include budgeting for the use of a tax return in the coming months. Again, this is an example of where knowing your options helps you prepare. While you can borrow money from friends and family or from a 401k to file, you can’t put the fees on your credit cards.

There May Be Another Way Out

Some of my best conversations with clients end with the client deciding on a plan of action that doesn’t involve bankruptcy. If the client can accomplish her goals without filing, and if I can assist in helping the client discover this, I consider it a great conversation. My job as an attorney is not to convince you to file. Instead, my job is to assist you in getting your goals met.

Bankruptcy attorneys are easy to talk to and they are generous with their time. Call me today with any questions you may have about a foreclosure notice, a Writ of Execution, or questions about whether your family will find out if you file. They are all valid questions, and there are answers. You can reach me at 704.749.7747 or email me here.

We know you have a lot to manage right now. Providing paperwork for bankruptcy can seem tedious. That’s why we offer an easy electronic option for completing a bankruptcy questionnaire, and also accept and deliver documents electronically if that is your preference. The goal is to obtain the required information from you, while making the process as easy as possible for you.

Most Charlotte bankruptcy clients of mine are relieved to find out that once they have completed the bankruptcy questionnaire they are done with 80% of the work. All that remains is turning over monthly statements for accounts and attending the short meeting with the bankruptcy trustee. Here is a list of paperwork required for bankruptcy.

Last Six Months of Statements

Whether you’re filing a Chapter 7 or a Chapter 13, you’ll need to provide your attorney with copies of the last six months of statements for all credit cards and bank statements. You’ll also need to provide up to date statements for medical bills, vehicles and other loans.

Last Two Years of Taxes

You’ll need to provide your bankruptcy attorney with copies of the last two years of tax returns. These are used to verify income. If you’re expecting a tax refund on a return that has been filed, these documents will also show that, and be used by your attorney and the bankruptcy trustee to determine if you can keep your return. Most of my clients expecting a return are allowed to keep it.

Retirement Account Statements

You’ll need to provide the last six months of statements for retirement accounts. Usually this means two quarterly statements. These are typically available online and easily saved as PDF for delivery to the law office.

Other Account Info

If you have other accounts, whether they are loans, debts or assets, you’ll need to provide an updated statement of these accounts. Remember, bankruptcy is about disclosure. In exchange for your honesty and openness with the bankruptcy court, you get tremendous and powerful relief from the burden of your debts.

Our goal is to make this process seamless and easy. From the day you decide to file with us you should feel relief. Reach out to us today to talk about your options and get started. Call 704.749.7747 for a free phone consultation with a bankruptcy attorney today. Or, while you’re online, take a few moments to fill out our online Bankruptcy Evaluation and we will get back to you ASAP.

Question: Can I transfer my assets right before a bankruptcy and still file?
Short Answer: No. But you can keep your property.

Most of my posts come on the heels of conversations with clients. The reason for this is that when I speak with someone on the phone I am reminded of the common questions clients have.

A recent phone conversation with a client centered around two transfers she had made. First, about six months ago she transferred $10,000 from an account in both her and her husband’s name, into an account in just his name. Second, a creditor obtained a judgment against her recently and she transferred her vehicle from her name only, to her husband’s name only.

Married, Filing Solely

This particular client was inquiring about filing bankruptcy just in her name. Her husband has income, she has very little. They share expenses. He has good credit, she does not. She has a lot of credit card debt in her name only. Filing a Chapter 7 just in her name makes sense to discharge debt which is just in her name and to protect his credit.

Look-Back Period For Transfers

Generally, the rules of bankruptcy have a one year look-back period for transfers. While the trustee has some discretion as to the nature or purpose of the transfer, the trustee is looking for a ‘fraudulent conveyance,’ or one which was done specifically to protect money or assets from creditors.

Consequences of Fraudulent Transfers

If the trustee determines the transfer was done to protect assets from creditors, he can bring the asset or funds back into the estate of the debtor, and make it available to creditors. In the case described above, part or all of the $10,000 could be pulled into the estate and the vehicle as well. Additionally, the exemptions available to debtors in bankruptcy will be lost in this scenario.

For a vehicle, North Carolina allows a $3,500 exemption per individual. There is also a wild card exemption of $5,000. That allows a total of $8,500 of equity in a vehicle which can be protected from creditors seeking to collect on a judgment, or creditors in bankruptcy. If the client had not transferred the vehicle, she could have used those exemptions to protect her car. Essentially, the transfer was unnecessary and limited her options.

What Do You Advise?

Call an attorney before you make a transfer. The attorney may advise the transfer given the larger picture, but what feels like the right thing to do in the moment may trigger some long-term consequences or may limit your options as to the timing of a filing for bankruptcy. A Charlotte bankruptcy attorney can quickly help you decide.

I’m available to help. Call me at 704.749.7747 to discuss your situation. I am honestly eager to hear from you.