Federal Bankruptcy Exemptions Increased for 2019 to Help Protect more of your Property when filing Bankruptcy in Philadelphia, Pennsylvania The Judicial Conference of the United States has just published the revised dollar amounts for Title 11 and Title 28 of the United States Code in the Federal Register. All dollar figures within the code have been adjusted by approximately.06% to account for cost of living increases. For families and small businesses filing bankruptcy, this change means thousands of dollars in additional assets will be protected as of April 1st, 2019. This update is particularly important for personal retirement savings, which will see an exemption increase of nearly $80,000. Updated Federal Bankruptcy Personal Exemptions to help you Effective 1 April 2019 522(d)(1) Interest in a Personal Residence: Increased from $23,675 to $25,150. 522(d)(2) Interest in a Motor Vehicle: Increased from $3,775 to $4,000. 522(d)(3) Household goods, including furniture, appliances, and art: Increased from $600 per item and not more than $12,625 to $625 per item and not more than $13,400. 522(d)(4) Jewelry: Increased from $1,600 to $1,700. 522(d)(5) Aggregate Interest in Other Property: Increased from $1,250 and up to $11,850 of any unused 522(d)(1) exemption to $1,325 and $12,575. 522(d)(6) Interest in tools, books, or other professional implements: Increased from $2,375 to $2,575. 522(d)(8) Interest in life insurance, inherited estates, or unmatured life insurance: Increased from $12,625 to $13,400 522(d)(11)(D) Compensation for bodily injury, not including pain and suffering or pecuniary damages: Increased from $23,675 to $25,150. 522(n) Retirement Accounts: Increased from $1,283,025 to $1,362,800 This is a summary of important changes. The complete notice can be found in the Federal Register (84 FR 3488, pp. 3488-3489 ) or viewed online through the Government Publishing Office. Exemptions Which are Raised to Reflect the Consumer Price Index Federal Legislation passed in 1994 stipulates that Title 11 US Code (better known as the Bankruptcy Code) be adjusted every three years starting from 1 April 1998 to reflect the Department of Labor’s Consumer Price Index. Per federal regulations, exact inflation adjustments are rounded to a multiple of $25. Benefit from the New 2019 Exemptions with Attorney David M. Offen If you are in the Philadelphia area, call the Law Offices of David M. Offen at (215) 625-9600 to schedule a free consultation. With over 20 years of practice in Bankruptcy law, Mr. Offen has helped over 10,000 clients navigate bankruptcy.   He has filed thousands of Chapter 7 cases as well as Chapter 13 cases and has discharged over $100,000,000 in debt. He can answer your questions and help you find the best path to get free of debt. Call today to get the right answers to your financial questions. He will advise you if Bankruptcy is best for you or if it is not your best move. Remember that knowledge is power. The more you know how to protect yourself from creditors, the better off you will be able to get your financial situation under control. The post US Bankruptcy Code: New 2019 Exemption Amounts appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

  Filing personal bankruptcy will be on public record but there is more you should know before making such an important decision. The prospect of filing for bankruptcy can often feel overwhelming and isolating. The Law Offices of David M. Offen help you to navigate these trying times and provide the services you need for a fresh start.     Though personal bankruptcy filings will be on public record, there is some good news: not everyone will easily be able to access your bankruptcy filing. Just because they are public does not grant the public full and easy access to your bankruptcy filings. In order to obtain information specific to your filings, a person would need to access a system known as PACER. The PACER program requires a person to register with the system and then charges a fee for each page obtained by the user. Because it can be relatively costly, the general public typically does not register for an account and therefore does not have easy access to your filing.   PACER is used most often by bankruptcy professionals, lenders, and anyone else who may have a specific need to see the details of prior bankruptcy cases. Who Will Know If I’ve Filed For Bankruptcy? As previously mentioned, bankruptcy professionals will usually be the only ones actively looking for bankruptcy information. However, there are a few instances where others may discover that you have filed. Obviously, creditors and co-debtors will receive direct notice when you have filed. In addition to creditors, anyone running a credit check will also be able to see if you have filed for bankruptcy. This means if you are applying for a job, trying to rent an apartment, or applying for credit, the people looking at your credit report will be able to see that you have filed for bankruptcy. An ex-spouse that receives child support will also be notified about your bankruptcy. During the time of notification, they may also be given instructions for how to proceed should you fail to continue to pay child support, as that is not a dischargeable debt.    Will My Employer Know If I’ve Filed For Bankruptcy?   Most employers will have no reason to obtain information about your decision to file. However, if your wages are being garnished by a creditor, your employer’s payroll department will be notified of your bankruptcy filing so that the garnishment can be immediately stopped. Your Lawyer will ask you to provide the name and contact information of the person in your payroll department so that creditors will no longer be able to garnish the wages from your payroll. Will My Bankruptcy Be Published In The Newspaper? It is possible for your bankruptcy filings to make it into the local paper. This will depend on the court where you will be filing and the local publishing practices in your area. Though news of your bankruptcy isn’t something a friend or family member could easily stumble upon, some courts do publish bankruptcy filings online. In addition, smaller jurisdictions in small cities sometimes publish bankruptcy filings in the local newspaper. If fear of publication is keeping you from moving forward, you may want to speak with someone from our office to discuss the best course of action and local publishing practices in your area. How Long Will Bankruptcy Stay on My Credit Report?   Typically, bankruptcy filings will stay on your credit report for an average of seven to ten years. This depends on whether you have filed Chapter 7 or Chapter 13. If you have filed Chapter 7, it will take about ten years before it is erased from your report. Typically it takes longer than Chapter 13 because the debt was not repaid over time. If you have filed Chapter 13 it will take about seven years.to ten years The shorter timeframe is due to the partial debt that you paid over the three to five-year payback period. You do not need to do anything specific to remove bankruptcy from your credit score. It will be deleted automatically based on the chapter you have filed for. Are There Any Benefits When Filing for Bankruptcy? Some people mistakenly believe that declaring bankruptcy is one of the worst things you can do to your finances. But in truth, if you’re unable to pay your debts, your credit is probably already in bad shape. Declaring bankruptcy may help set you back on the right path and, over time, it may even reestablish your credit score and put you in much better shape than you were prior to filing Bankruptcy. This applies to both types of Bankruptcies – whether you filed a Chapter 7 Bankruptcy to seek a quick discharge of your debts or whether you filed for Bankruptcy relief under Chapter 13 Bankruptcy and made payments to a Chapter 13 Trustee. How Quickly Will My Credit Score Rise After Bankruptcy? As mentioned previously, many people will notice their credit scores plunge in the months leading up to filing bankruptcy. While discharging your debts will help give you a fresh start, you shouldn’t expect to see much of a credit increase until your bankruptcy is completed. For those that file Chapter 7, this could be within six months of your completed filing. For those filing Chapter 13, it could be longer. Again, Chapter 13 usually includes a three to five-year repayment plan so it could take longer to see an increase in your score.  On the other hand, sometimes there are benefits to filing that cannot be achieved by filing for Chapter 7. Should I File Bankruptcy? If you can no longer meet your obligations to creditors and lenders, you do have the ability to relieve all or part of your debts. Filing for bankruptcy will discharge many of your debts meaning the debts are forgiven and you are no longer responsible for paying them. If you are thinking of filing for bankruptcy it is important to talk with a local bankruptcy and debt attorney who can walk you through the process and your options before filing. The Law Offices of David M. Offen located in Philadelphia can help you find solutions to your financial problems and get you back on track.    For a free consultation on how to quickly get your financial situation under control Call The Law Offices of David M. Offen at 215-625-9600. They are located in Center City Philadelphia – and are very easy to reach from Philadelphia and the suburbs. The post Are Personal Bankruptcy Filings Public Information? appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

   A common procedure in consumer bankruptcy cases is to avoid a lien on a homestead created by a judgment against the debtor by an otherwise unsecured creditor.  11 U.S.C. 522(f) provides for avoiding judgment liens on exempt property.  In In re Jones, 2019 Bankr. LEXIS 1613, Case #05-55697 (Bankr. E.D. Ky. 28 May 2019) the debtor had filed a chapter 7 bankruptcy in 2005, and in that case obtained an order avoiding the judgment lien of Capital One on their homestead.      Approximately 13 years following the bankruptcy, the debtors inherited 1/3 interest in another parcel of real estate in the same count, and when they attempted to sell such property, the closing was delayed because the creditor had not released the judgment lien.  Debtors then filed to reopen the bankruptcy case, and filed a contempt motion against Capital One.   Under Kentucky law judgment liens are enforceable for 15 years.  The discovery of the judgment lien both delayed closing on the property and resulted in a reduction in the sale price of the property by $5,000 for delay in closing on January 18, 2019 and by another $7,500 for delay on closing scheduled for February 15, 2019.  The delays also caused significant strain on her family relationships.  Capital One did not make an appearance in the contempt proceeding.  In an initial hearing on 14 February 2019 the Court entered a release order, directing Capital One to forthwith release it's lien, and authorizing the debtor to present the order to the recording office if Capital One does not do so within 30 days.   In the order following the contempt hearing in March 2019 the Court initially found that Capital One violated the discharge injunction of 11 U.S.C. 524(a)(2), which provides in part that the discharge operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor.   As of the petition date, Capital One held an in personam claim against the debtor for the obligation itself, as well as an in rem claim against real estate the debtor owned in the county.  The in personam claim was extinguished upon the entry of the discharge order in the bankruptcy case.  The in rem claim was extinguished upon entry of the order avoiding lien.  Thus, upon elimination of both claims Capital One had no claim against the debtor, and the §542(a)(2) discharge injunction prohibited the creditor from taking any future collection action against the debtor or her property.  Yet Capital One allowed the judgment to remain of record, thereby impending the Debtors' fresh start.  In order to find a creditor in contempt the court must find that the creditor's act was willful1Willfulness can be shown be establishing by clear and convincing evidence that the creditor 1) violated the discharge injunction, and 2) did so with actual knowledge of the injunction.2The court noted there was no evidence that the avoidance order was served on the creditor prior to the contempt motion, but found that the contempt motion provided the creditor actual knowledge of the injunction in January 2019.  Debtors' counsel certified that he served the contempt motion in compliance with Bankruptcy Rule 7004(h) specifying special service on insured depository institutions.  Finding a willful violation, the court may award actual damages based on its inherent contempt power, and may also award mild non-compensatory punitive damages as necessary to enforce the Bankruptcy Code under 11 U.S.C. 105.3  The Court found sanctions warranted by the fact that the judgment has been a cloud on the title for over 13 years, and that the creditor had knowledge of this since at least 23 January 2019.  The creditor chose to neither remedy the ongoing violation, nor to make written and oral arguments before the Court.  Such failure demonstrates Capital One's abject disregard for the Court's Discharge, Avoidance, and Release orders.    The Court awarded $2,500 for the delay, stress, and embarrassment caused by having her family find out about the bankruptcy filing and the friction caused by the lien's delay in closing on the property.  The court also found the attorneys fees reasonable, and awarded $5,995 in such fees,  Finally, the court awarded mild non-compensatory damages of $7,500.   The Court also awarded additional coercive sanction of $100/day  until the lien is released commencing after Debtors file a notice that it has not been released, such notice to be filed no earlier than 14 days after service of the order.  The court acknowledged Debtor's argument that the Debtor's presentation of the court's avoidance and release order to the designated recording officer may not be a valid lien release under Kentucky law.1 Gunter v. Kevin O'Brien & Assocs., LPA (In re Gunter), 389 B.R. 67, 75 (Bankr. S.D. Ohio 2008); Kanipe v. First Tenn. Bank (In re Kanipe), 293 B.R. 750, 756 (Bankr. E.D. Tenn. 2002)).↩2 In re Campbell, No. 10-22561, 2014 WL 32161, at *6 (Bankr. E.D. Ky. Jan. 6, 2014).↩3  In re Joseph, 584 B.R. 696, 705 (Bankr. E.D. Ky. 2018). ↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703https://hillsboroughbankruptcy.com

Dischargeability of Student Loans The American Bankruptcy Institute recently released their final report on consumer bankruptcy. This report took place from 2017-2019 and analyzed dozens of issues as they relate to Chapter seven and Chapter 13 bankruptcy. The first issue that I would like to address is the non-dischargeability in general of student loans. As+ Read More The post American Bankruptcy Institute’s Recommendation For Student Loans In Bankruptcy appeared first on David M. Siegel.

  The Fourth Circuit Court decision in Hurlbert v. Black, 2019 U.S. App. LEXIS 15551, case #17-2449 (4th Cir. May 24, 2019) overruled the Circuit's prior decision in Witt v. United Cos. Lending Corp. (In re Witt), 113 F.3d 508 (4th Cir. 1997) which had found that §1322(b)(2) prohibited modification of mortgages even when the final payment on the mortgage came due prior to the final payment under the chapter 13 plan.   The Hurlbert court moved to put the 4th Circuit in line with every other court deciding such issue that §1322(c)(2) provided an exception to §1322(b)(2), not only as to payment of such claims but as to the modification of the claim itself.  The Hurlbert case involved the purchase of a homestead in 2004 with owner financing of the mortgage.  The note provided for a balloon payment in May 2014.  When the loan matured and was not paid, the seller/mortgage holder, Ms. Black, commenced foreclosure proceedings.  Mr. Hurlbert filed for relief under chapter 13 valuing the property at $40,000.    Ms. Black initially filed a claim asserting a $40,000 secured claim and a $91,000 unsecured claim, but filed an amended claim the next day for a total of $180,971.72 not identifying the amount secured or unsecured.  Mr. Blacks chapter 13 plan proposed to pay Ms. Black a $41,132.19 secured claim in full with the balance of the claim treated as unsecured.  Ms. Black filed a timely objection that such provision violated §1322(b)(2)'s anti-modification provision, and on summary judgment the bankruptcy court agreed, which was affirmed by the district court and a panel decision of the 4th Circuit.  The 4th Circuit then granted a request for a rehearing en banc and vacated the panel decision.  The overarching goal of the 1978 Bankruptcy Reform Act was to provide debtors with a 'fresh start.'  The act substantially revamped chapter 13 bankruptcy to facilitate the adjustment of debts through flexible repayment plans.  Section 1325(a)(5) requires a plan provision for treatment of a secured claim to meet three provisions: 1) the creditor accepts the plan, 2) the debtor surrenders the property to the creditor; or 3) the debtor invokes the 'cram down' power.  §1325(a)(5)(B) describes this power as allowing the debtor to retain property over the creditor's objection by allowing the creditor to retain its lien and paying such creditor the present value of the allowed secured claim over the life of the plan.  In turn §506(a)(1) provides that a claim is secured only to the extent of the value of the property on which the lien is fixed.  When the claimed amount exceeds the value of the claim, this section requires the bifurcation of the claim into a secured claim for the value of the collateral, and an unsecured claim for the balance.  This power is limited by §1322(b)(2) which generally prohibits cram down of the rights of holders of secured claims secured only by a security interest in real property which is the debtor's principal residence.  This section also has an exception, as described in §1322(c)(2) which provides:Notwithstanding subsection (b)(2) and applicable nonbankruptcy law . . . in a case in which the last payment on the original payment schedule for a claim secured only by a security interest in real property that is the debtor's principal residence is due before the date on which the final payment under the plan is due, the plan may provide for the payment of the claim as modified pursuant to section 1325(a)(5) of this title.11 U.S.C. 1322(c)(2).   The 4th Circuit's prior Witt ruling found that §1322(c)(2) only applied to the payment of such claim, and that a debtor could not modify the mortgage itself.  Courts universally have criticized Witt's finding of ambiguity in the statute determining that the plan language of the section authorizes chapter 13 plans to modify claims, not simply payment. 1  The phrase 'as modified' in §1322(c)(2) is most naturally read as permitting modification of claims rather than just payments.  The prefatory phrase 'notwithstanding subsection (b)(2)' signals the drafter's intention that the section override conflicting provisions of any other section.  Finally, §1322(b)(5) provides that a chapter 13 plan 'may provide for the payment of the claim as modified pursuant to Section 1325(a)(5) of this title'  11 U.S.C. 1322(c)(2).  The essence of §1325(a)(5) is the cramdown of a secured claim to the value of the collateral.    Rather than being a procedural provision as to timing and scheduling of payments, §1325(a)(5)(B) sets forth the substantive criteria a plan must satisfy in order to be confirmed.  It, rather than §506(a)(1), is the section that authorizes cramdowns in chapter 13 bankruptcy.Michael BarnettMichael Barnett, P.A.506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com1 See Nat'l Bankr. Rev. Comm'n, Report of the National Bankruptcy Review Commission 237 (1997) ("[S]ection 1322(c)(2) authorizes a stripdown of an undersecured residential mortgage if final payment would become due during the course of the Chapter 13 plan."); 8 Collier on Bankr. (MB) ¶ 1322.17 (2018) (opining that "the plain language of [§ 1322(c)(2)] permits the modification of a claim on [a qualifying] home mortgage through the bifurcation of that claim into secured and unsecured components, with the unsecured component crammed down pursuant to section 1325(a)(5)," and characterizing Witt as a "strained reading of the language" that runs "contrary to accepted canons of statutory construction, as well as the great weight of authority, and inconsistent with other language in the subsection that specifically referred to section 1325(a)(5)").  Hurlburt at *13.↩

Wage garnishment is the most common type of garnishment. In Arizona, the wage garnishment process usually starts when a creditor files a writ of garnishment of earnings, therefore, initiating a civil lawsuit against a debtor, who has defaulted on payments. If the judge rules for the creditor, the Court grants a money judgment in favor of the creditor and against the person owing the money. The judge issues a court order to the creditor. If the debtor does not pay, then the creditor can use the money judgment to file for a wage garnishment. The creditor serves the wage garnishment documentation on the debtor’s employer, and it requires the employer to withhold (garnish) a specified amount from the debtor’s paycheck each pay period. If your employer has been served with this court order, they cannot refuse to garnish your wages without severe repercussions. The court order requires your employer to send the funds to the person or organization that you owe money until the debt is paid off unless other payment arrangements are made with the Court or creditor. The post An Overview of Wage Garnishment in Arizona appeared first on Tucson Bankruptcy Attorney.

Bankruptcy, a legal process, provides individuals, couples, and businesses with a fresh financial start by temporarily or permanently preventing creditors from collecting on certain types of debts. It helps people who can no longer pay bills. When the legal procedure for bankruptcy is complete, it provides a discharge, a court order, that confirms to creditors that individuals, couples, or businesses, who are granted the discharge, do not have to repay certain types of debts. When the discharge is permanent for the full amount of debt owed a creditor, it disallows that creditor from trying to collect on that debt. The post Common Bankruptcy Questions appeared first on Tucson Bankruptcy Attorney.

Workers’ compensation, also known as workers’ comp or workmans’ comp, is a form of relief that compensates employees who become ill or injured due to occupational-related events. Here, Maryland workers’ compensation attorney Jeffrey Scholnick of The Law Offices of Jeffrey Scholnick provides an overview of workers’ compensation law. Workers’ Compensation Basics Workers’ compensation is beneficial because it provides security for medical treatment and recovery of lost wages as well as compensation for a permanent disability. While states vary in workers’ compensation rules and regulations, some programs provide additional benefits to injured or disabled employees such as programs in place to help workers return to the workplace—in the state of Maryland, vocational rehabilitation is available for disabled, covered employees who need assistance returning to the workforce. Also, in the state of Maryland, the families of workers who die of a work-related event can receive monetary aid. Click here for more information pertaining to Maryland workers’ compensation law. Workers’ Compensation Insurance The majority of states, including Maryland, require employers to carry workers’ compensation insurance, a commercial insurance required for injured employees to sustain benefits. Typically, employers can receive workers’ compensation by purchasing a policy through a commercial insurance carrier, meeting the criteria to be self-insured, or paying into a state-run workers’ compensation insurance program. In the state of Maryland, you can purchase workers’ compensation insurance either publicly or privately; in other words, insurance can be purchased from any licensed, private insurance agency as well as through a state-wide fund. Workers’ Compensation Benefits There are various forms of temporary and permanent relief that are covered under workers’ compensation. Benefits may include medical and vocational benefits as well as recovery of lost wages: Medical Benefits If an employee is injured on the job, they can receive medical treatment at no cost to them; the care will be covered by workers’ compensation. Types of medical treatment include physical therapy, doctor’s appointments, pharmaceutical prescriptions and even surgical procedures. Vocational Benefits Those who were injured on the job, and who have received all necessary medical procedures, have the opportunity to be a candidate for vocational benefits such as those offered under the Maryland Workers’ Compensation Commission (WCC) Vocational Rehabilitation. Lost Wage Recovery If your work-related injury or illness inhibits you from entering the workforce for a temporary period of time, workers’ compensation can allow you to receive compensation of your wages. This compensation is usually a percentage of your normal wages. Discuss Your Workers’ Compensation Case with Jeffrey Scholnick, P.A. You can never anticipate what will happen in the workplace, which is why it is important to have an experienced workers’ compensation attorney on your side in case of a work-related accident or injury. That is why workers’ compensation attorney Jeffrey Scholnick of The Law Offices of Jeffrey Scholnick has over 35 years of experience providing legal counsel for those in need of workers’ compensation benefits. If you would like to speak to a dedicated workers’ compensation attorney regarding workers’ compensation and what it may mean for you, contact The Law Offices of Jeffrey Scholnick today.The post An Overview of Worker’s Compensation Law first appeared on Scholnick Law.

What Does Filing for Bankruptcy Mean for Your Tax Refund? Filing for bankruptcy can help you get out from under the weight of overwhelming debt. Depending on your circumstances, you can either qualify to have your unsecured debt discharged, such as credit card and medical bills, or you could have your debt consolidated under one repayment plan. The repayment plan can also reduce your overall amount owed, depending on your income and other circumstances. However, if you are thinking of filing for bankruptcy, you may be worried about how it will affect your assets. You may be worried about losing things like your car, your house, or your savings accounts. If you are expecting a tax refund, you may be worried that it will be taken. Unfortunately, there’s no one answer to this question. Whether your tax refund will be taken in your bankruptcy depends on a number of factors, including the type of bankruptcy you file. Chapter 13 Bankruptcy In a Chapter 13 bankruptcy, the trustee determines what disposable income you have available to pay off your debts. That information is used to determine how much you will repay each month and whether you can pay the full amount of your debts. If you have recently received a tax refund or are expected to get one soon, that money will be included in your disposable income and will be applied to your debts. If you get any tax refund over the course of your repayment plan, which is usually three to five years, that will be considered additional income and will be applied to your debts. You may be able to keep your tax refund if you can show that you have experienced a change in financial circumstances and are unable to meet our basic needs. You could show that you need the refund to pay things like your rent or your electric bill. Otherwise, be prepared to hand over your refund. Chapter 7 Bankruptcy In a Chapter 7 bankruptcy, you are allowed to keep certain assets that are under a certain value. A tax refund is considered an asset, so depending on how much it is, you may be able to keep it. If the refund is not exempt, it can be taken to pay off your creditors. Any recently distributed tax refund or refund expected to come in the near future can be confiscated. If you are expecting refunds from previous tax years, those can also be taken. It’s possible to keep your tax refund in a Chapter 7 bankruptcy if it is not considered exempt. For example, you could get your tax refund and spend it before you file for bankruptcy. Just make sure that you spend it on your basic living expenses and not on a luxury item like a new TV or jewelry. You could also use your refund to pay for your bankruptcy attorney or the legal fees associated with filing for bankruptcy. If you spend it on anything extraneous, you could be accused of bankruptcy fraud. Always work with an experienced bankruptcy attorney to determine how to best handle your tax refund if you are considering filing for bankruptcy. There may be way to keep your tax refund, but you’ll want to make sure you are acting within the confines of the law. Otherwise, you could put your bankruptcy filing at risk or potentially face other consequences. Your bankruptcy lawyer can counsel you on the rules as they apply to your circumstances and what you can do to maximize your use of your assets as well as the debt relief you get under bankruptcy. If you are thinking of filing for bankruptcy, contact My AZ Lawyers. Our bankruptcy lawyers can help you determine the right debt relief strategy for you, based on your personal financial circumstances and your goals. With one of our bankruptcy lawyers on your side, you can get approved for maximum debt relief so that you can get the second chance you need. You can start to reclaim your finances and build a more positive future. Contact us in Arizona today to talk with a bankruptcy attorney and learn how this legal benefit can help you take back your finances.   Published By: My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 399-4222 The post What Does Filing for Bankruptcy Mean for Your Tax Refund? appeared first on My AZ Lawyers.

By Kevin CareyThe Department of Education on Tuesday released a trove of information that shows the average amount of debt incurred by graduates of different academic programs at each college and university in America. This focus on discrete programs, rather than institutions as a whole, is gaining favor among political leaders and could have far-reaching effects. With anxiety about student debt soaring — the billionaire Robert F. Smith made headlines last weekend with his surprise promise to pay off the debts of Morehouse College’s 2019 graduating class — the program-level information has the potential to alter how colleges are funded, regulated and understood by consumers in the marketplace.Everyone knows that different majors have different economic payoffs. Social workers earn less than chemical engineers. But federal laws that regulate college success don’t account for that. Instead, they average results across the university. People don’t have a good way of seeing how big those differences are within a particular university, let alone comparing programs across universities.The new, more detailed debt information was created in response to an executive order issued in March by President Trump. Other lawmakers have called for similar approaches. In February, Senator Lamar Alexander of Tennessee, chairman of the Senate Education Committee and a former university president, gave a speech outlining his plans to revise the federal Higher Education Act. Currently the federal government measures the percentage of borrowers at a given college who pay their loans back. If too many students fail to repay, colleges are barred from receiving federal funds.Mr. Alexander proposed a “new accountability system” based on loan repayment rates for individual programs within colleges. This, said Mr. Alexander, “should provide colleges with an incentive to lower tuition and help their students finish their degrees and find jobs so they can repay their loans.”Both Mr. Trump and Mr. Alexander, despite their strong criticism of President Obama on education, are following in the footsteps of his regulatory crackdown on for-profit colleges and short-term certificate programs. Rather than evaluate sprawling educational conglomerates based on the average results of hundreds of programs, the Obama rules disqualified specific programs whose graduates didn’t earn enough money to pay back their loans.Mr. Alexander wants to extend scrutiny and accountability to all colleges, but using different measures. The Trump administration wants to replace the Obama rules and penalties with simple transparency of outcomes by program.In addition, a bipartisan congressional coalition that includes Senators Joni Ernst and Elizabeth Warren has sponsored the College Transparency Act, which would create more comprehensive program-level data.The debt information released by the Department of Education is still preliminary, so students should be cautious when using it to choose programs and colleges. But there are other examples of how program-level data could change how we look at higher education. The University of Virginia, for instance, is the one of the most prestigious and selective public universities in the nation, with an average freshman SAT score around 1400 and barely a quarter of applicants admitted. But data published by the state’s higher education coordinating body reveals large differences within the university. Some University of Virginia majors earn more than $70,000 or $80,000 three years after graduating, while others are in the $35,000 to $50,000 range. University of Virginia systems engineers, for example, make almost double what environmental science majors earn.George Mason University, in Fairfax, Va., is less prestigious. A former commuter school, it has a typical freshman SAT score under 1200 and accepts about 80 percent of applicants. On average, George Mason graduates earn less than University of Virginia graduates. But as with Virginia, there are large differences between majors within George Mason, to the point that earnings results at the two universities greatly overlap.Accountants and civil engineers who graduate from George Mason earn over $60,000 per year. Psychology and architecture majors who graduate from Virginia earn less than $45,000.Mark Schneider, a higher education scholar, helped the state of Virginia gather earnings information for each university program. He is now the director of the federal Department of Education’s institute of education sciences, guiding collection of the program-level data called for in Mr. Trump’s executive order. The key insight, Mr. Schneider says, is that there is usually more variation in earnings results between programs within colleges than between colleges.If Congress adopts Mr. Alexander’s plan, colleges will need to give much closer scrutiny to programs where students borrow large amounts of money and then struggle to land well-paying jobs. Such programs are often overlooked, as Harvard discovered when its graduate theater program ran afoul of the Obama regulations. This could be a sea change in campus administrative culture, which is typically so hands-off that the University of North Carolina at Chapel Hill had no idea (this is the most charitable explanation) that one of its departments ran a huge academic fraud operation for 18 years.The shift to programs could also begin to change the dynamics of the higher education market, which is currently dominated by institutional reputations, to the point that wealthy families are willing to pay enormous bribes for admission on the strength of brand names alone.There are still many disagreements and details to resolve. The Trump approach relies on the idea that if students have better information, choices in the higher education market will be enough to ensure quality. But there is little evidence to support this view. Even with program data, students will still be vulnerable to the deceptive marketing and aggressive sales tactics that remain widespread in the for-profit college industry.The measures matter, too. Mr. Alexander’s plan is to evaluate programs based on loan repayment rates. But it isn’t known whether those rates are a good measure of program quality. The Obama method of comparing debt levels to student earnings, by contrast, was so accurate that many colleges pre-emptively shut down their low-performing programs before the sanctions were even applied. Education Secretary Betsy DeVos is now working to repeal those regulations.Policymakers will have to guard against institutional gamesmanship. Poorly performing programs could simply be relabeled. At-risk students could be pushed to not declare a major at all. Program-level regulations probably work best if accompanied by standards that apply to the college as a whole.Time frames are also important. It makes sense to judge a nine-month-long medical assisting program on whether graduates find jobs as medical assistants. The payoff for bachelor’s degrees, particularly in the liberal arts and humanities, can take longer to manifest. And, of course, higher learning isn’t just a way to get a job. It should guide people toward more enlightened, fulfilling lives.But while college is about more than money, it can be paid for only with money. With student debt at a record high and with one million people defaulting on their college loans every year, it’s not surprising that politicians across the political spectrum want to give students and parents more information about how different programs pay off. When that happens, higher education may never be quite the same.Copyright 2019 The New York Times Company.  All rights reserved.