Lawyers don’t like paperwork.  If we had a choice, we’d have a paper-free office.  But in our jobs, we need to be ready to show the right papers to the right people to be effective. The Bankruptcy code says we have to give the trustee – the person overseeing a bankruptcy case – documents.  We ask for these papers because we can’t give a proper financial story without proof.  Paystubs to show a pay cut.  Tax returns to show a change in income from year to year.  Bank statements to prove that there were no unusual transfers or purchases before bankruptcy.  They let us do our job to tell your story. We successfully represented our clients Jack and Janet in a Chapter 7 bankruptcy.  As part of the process, we had to ask for bank statements, mortgage documents, car titles, pay stubs, and tax returns.  The US Trustee, the government body that oversees bankruptcies, had a question about our client’s income situation.  They asked for more bank statements, pay stubs, and the most recent tax returns.  We gave them to the office and they determined we were right – our clients deserved a Chapter 7 discharge.  They got it. Finding and keeping track of paperwork can be annoying.  But it may mean the difference between a bankruptcy being successful and being a nightmare.  Lakelaw will help go over your paperwork with you and work to make your bankruptcy successful.   Call 847-249-9100 or 262-694-7300 in Wisconsin, or e-mail us to see what we can do to make sure you have all the financial documents you need for a successful bankruptcy filing.

City Violations City violations in Chicago, incurred after filing for bankruptcy in Chicago are not eliminated. One such example is where someone who surrenders a home in foreclosure yet owes city violations and then files chapter 7, the debt to the city is not wiped out. You would think that once you give up a+ Read MoreThe post What Happens To City Violations After Filing For Bankruptcy In Chicago? appeared first on David M. Siegel.

Before she came to talk to me about bankruptcy, Ana was scammed out of $200 by Recovery Services. “Recovery Services” called Ana from 855-633-3603 in January and told her she was in trouble for non-payment of a “check” in connection with a pay day loan.  The sheriff would bring her papers day after tomorrow unless […]The post Recovery Services at 855-633-3603 Scams Ana appeared first on Robert Weed.

Homeowners very often wind up filing for bankruptcy. Before filing, homeowners wonder whether or not they will be able to keep their house through the bankruptcy process. For most homeowners, there is not sufficient equity in the property which would cause them to lose the property. In other words, the property has no administrative value+ Read MoreThe post Filing Bankruptcy And Protecting Your Home appeared first on David M. Siegel.

The Bankruptcy Law Office of Robert Weed led all attorneys in Virginia Chapter 7 bankruptcy case filings in 2013. That fact was announced just recently by 722 Redemption Funding, a company that finances cars for people in or just out of chapter 7 bankruptcy.   You can see their full report here. For most people […]The post Virginia Chapter 7 Bankruptcy appeared first on Robert Weed.

There are several requirements that must be satisfied prior to filing a Chapter 7 bankruptcy petition.  The transcription and video below explain what is needed in great detail. Jesse Barrientes: What are the requirements for filing a Chapter 7, the pre-filing requirements? David Siegel: Yeah, before a case can be filed, the individual has to+ Read MoreThe post What Are The Requirements For Filing A Chapter 7? appeared first on David M. Siegel.

Most people want to pay their debts. Many people think that filing bankruptcy is wrong. Some think that filing a bankruptcy case is dishonorable. And quite a few people think that bankruptcy is immoral. For these people, the hope of debt consolidation sounds like a good alternative. Read here why we think that chapter 13 is the best debt consolidation deal ever.   We agree with Dave Ramsey says: Debt consolidation is nothing more than a “con” because you think you’ve done something about the debt problem. The debt is still there, as are the habits that caused it – you just moved it! You can’t borrow your way out of debt. You can’t get out of a hole by digging out the bottom. True debt help is not quick or easy. Read what Dave Ramsey says about Debt Consolidation here   We agree with Illinois Attorney General Lisa Madigan who says this about Debt Settlement Firms: These companies are unfairly luring financially strapped consumers with misleading claims that they can effectively eliminate consumers’ debt,” Madigan said. “The reality is that, after enrolling in a debt settlement program, consumers too often find themselves in even worse financial straits. It’s time to clean up this industry so that people struggling to pay off their debts aren’t being sold a false bill of goods. Read what Illinois Attorney General Lisa Madigan says about Debt Consolidation here Read what Wisconsin Attorney General J.B. Van Hollen is doing about Debt Settlement Firms in Chicago here   Here is what Lakelaw believes about Debt Consolidation: Most debt consolidation plans or debt consolidation schemes are frauds Most debt consolidation agencies and debt settlement companies will rip you off Credit card companies will accept lump sum cash settlements from you if they are convinced that you can’t collect your debt. If you have some cash or can get some from a friend or relative, the experienced Kenosha bankruptcy lawyers at Lakelaw will help you with this on an hourly basis If you are saving money to pay debts to credit card companies after you are in default under a “debt consolidation program”, interest will grow on your credit card debt at the default rate. In chapter 13 bankruptcy, you can pay your debts over a period up to 5 years without interest in almost every ccase. When credit card companies get judgments against you, they will freeze your bank accounts and take 15% of your wages in Illinois and 25% of your wages in Wisconsin. In chapter 13 bankruptcy, wage garnishment stops. Bank accounts are unfrozen. You make one affordable payment each month to your chapter 13 trustee and have no further worries. If you have some ready cash available, and just a few debts, our experienced Lake County bankruptcy attorneys can help you negotiate a settlement with your credit card companies. We’ve done this successfully in many cases. We do this on an hourly basis, not on a commission like debt settlement firms.   Frequently Asked Questions About Debt Consolidation Isn’t it better to consolidate my debts than to file bankruptcy? If you can afford to pay your debts off over time without filing bankruptcy, yes, it’s better. But if you think you can pay your debts off through a debt consolidation service, think again. You’ll be paying them a hefty fee. Creditors won’t necessarily stop calling you. You’ll actually be in default with creditors you are not paying. Your interest rates will go up a lot. Your credit limits will go down a lot. You’ll have a hard time paying your debts down. Isn’t it true that I can pay my credit card debts off for pennies on a dollar? You are liable for 100% of your credit card debt plus interest unless the credit card company forgives the debt or you get a bankruptcy discharge. If the credit card company forgives some of your debt, it can issue you a tax form called a Form 1099C. The debt which was cancelled is like found money to you – income – and you might have to pay income tax on it. You won’t have to do that in bankruptcy. Can I settle my credit card debts without bankruptcy? Credit card companies insist on knowing that they can’t do any better from you. When your back is to the wall, credit card companies may ask for a lump sum payment from you. However, the amount they will ask for is frequently more than you can pay. Should I pay my credit card debts with money from my IRA or 401k plan? We think this is a terrible idea. Not only are you losing money which you need for retirement, you may have to pay penalties on this for early withdrawal. Even worse, you will have to pay income tax on the money you take out. The banks could never touch your IRA or 401k – it’s exempt from creditors. Keep it that way! What if I get my mom or dad to help me pay the debts? That is very nice of mom or dad. And if there’s not that much involved, credit card companies might be willing to take less than 100% in order to settle. The banks won’t take less than 100% unless they know that there’s no way they will get paid more. What happens to my credit record if I settle my debts for less than I owe? There will be a notation on your credit report that the debts were legally satisfied for less than the full amount. This is considered somewhat derogatory and might make it harder for you to get credit in the future. However, this report is not as derogatory as bankruptcy or charge off? What is Charge Off? Charge off means that the credit card company has given up on collecting from you. It will probably sell your debt to another creditor who may try to collect the debt in the future. Just because the debt is charged off doesn’t mean you’re not still liable for it. The credit card debt is now 6 years old – am I still liable? You are still liable for a 6 year old credit card debt. It can still appear on your credit report. However, nobody can legally collect on it if you raise the defense that it is barred by the Statute of Limitations. After 7 years, the debt can no longer appear on your credit report.

The Typical Co-Debtor Protection In most circumstances, when only one co-debtor files for bankruptcy protection, the non-filing co-debtor usually can maintain the property provided that the co-debtor continues to make timely payments. An interesting situation arose in a recent case. The particular property is a boat. Husband and wife both signed for and are responsible+ Read MoreThe post What Happens When Only One Co-Debtor Files For Bankruptcy? appeared first on David M. Siegel.

My Recent Client I recently had the opportunity to speak with a chapter 13 debtor. This debtor had done a prior chapter 13, where the plan payment was $350 per month. The debtor was unable to make his monthly payment to the trustee and his case was soon dismissed. The debtor then came to my+ Read MoreThe post Chapter 13 Bankruptcy Requires The Debtor To Be Honest appeared first on David M. Siegel.

By Tara Siegel BernardSix months after his wife learned that she had a rare vascular disease of the brain,Frank, now 66, lost his job as director of sales of a telecommunications company.His wife, to whom he had been married for 36 years, died just two months later.He was still grieving when he learned that he had kidney cancer. The tumorwas operable, but the exam brought to light a long list of other serious problems,including a pulmonary embolism and a heart-rhythm disorder.That was in 2009, in the depths of the recession, and finding a new job wasdifficult. Two years later, after struggling to pay medical bills not covered byinsurance and other debts, Frank filed for bankruptcy. But that did not erase thegiant pile of federal Parent Plus loans that he had taken out to help put his threechildren through college. Since he could no longer work, Sallie Mae, the loanservicer, ultimately suggested applying for a disability discharge, which wouldcancel the debts.He qualified, and last July, his loans, which had ballooned to $150,000 inforbearance, were wiped away. “I felt like a Buick had been lifted off myshoulders,” said Frank, who lives in upstate New York.But much to his surprise, he received another bill. In January, the InternalRevenue Service sent him a tax form, known as a 1099-C, which said that the loanamount had to be treated as income. According to his calculations on TurboTax,his tax bill for this year is about $59,000.“If I am not capable to work due to a medical disability to pay the studentloan, how am I supposed to work to pay the taxes?” said Frank, who agreed to discuss his situation only if his full name was not published. “Now I am somewhatpanicked.”After much criticism, the Department of Education has made it easier inrecent years for disabled borrowers to have their federal student loans discharged.But now, as more people are qualifying for loan forgiveness, many of them arerunning into an unexpected consequence: They are often shocked to learn thatthey basically exchanged one debt for another, according to consumer advocatesand tax and credit specialists.While millions of debts — including credit cards and mortgages — arecanceled each year, the group of borrowers whose loans have been dischargedbecause of a “total and permanent disability” has grown sharply to more than115,700 in 2013, from nearly 61,600 in 2011 and fewer than 15,000 in 2008,according to the Department of Education. But under current tax law, the amountof debt forgiven is generally taxable, so some disabled borrowers end up with taxbills they cannot afford.Borrowers who can prove they were insolvent may be able to ease the taxburden, but may not be able to eliminate it. And many people do not even knowthis exception exists. The insolvency calculation is notoriously complex,particularly for people who are dealing with medical problems or the death of achild, consumer advocates said, which is another instance in which student loandebts may be discharged.“The government gives with one hand, while taking back with the other,” saidMark Kantrowitz, a senior vice president and publisher of Edvisors, aninformational website about paying for college. “Morally, if debt is canceledbecause of the borrower’s inability to pay due to disability, the corresponding taxdebt should also be forgiven.”The tax debt is generally a small fraction of the overall debt, but it can presenta great burden because it is due in one lump sum instead of being spread overtime, he added.“Many borrowers don’t even realize it’s going to be a taxable event,” saidPersis Yu, a lawyer at the National Consumer Law Center who works on theStudent Loan Borrower Assistance Project. “The collateral damage definitely haspotential broad impact. There is the issue of finding affordable housing if they dohave to sell assets to pay for this liability. One of our other concerns is because some people will have this included in their adjusted gross income, they could losepublic benefits.”In some instances canceled debts are not taxable, including debts canceled inbankruptcy. And student loans may not be taxable for borrowers who work for aspecific period in certain professions, for example.Insolvency is another exception. Borrowers who can illustrate that they wereinsolvent — that is, their total liabilities exceeded the value of their assets — couldpotentially lessen or even eliminate the tax burden. The amount of taxable incomecan be reduced, but only to the extent of the insolvency.In other words, if a borrower’s debts exceed assets by $25,000, but a $50,000loan is forgiven, tax would still be owed on $25,000. “Insolvency is insufficient toprotect many vulnerable borrowers,” Ms. Yu said.In Frank’s case, when he factors his insolvency in that calculation, he said hewould still owe nearly $25,000 in federal and state taxes. He needed the help of atax lawyer to arrive at that reduced figure, which he said the I.R.S. may or may notaccept.Canceled debts are treated as income “to prevent people from using this as aloophole: lend someone money, they buy something of value, then cancel the debtand they don’t have to report that money as income,” explained Gerri Detweiler, acredit specialist with Credit.com. “But unfortunately very vulnerable borrowers arebeing swept up in this. They find themselves suffering from a variety of illnesses,unable to work, and having to deal with the I.R.S.”The consequences of not paying are serious. The I.R.S. has the authority togarnish wages, bank accounts and other property, such as automobiles orretirement savings accounts. The agency can also garnish Social Security andpension payments, and can file a federal tax lien, which is attached to all propertyan individual may own, specialists said. The I.R.S. will also add penalties andinterest to the bill.If a taxpayer does not pay the amount owed, the I.R.S. will send a bill, whichis the start of the automated collections process. If the borrower cannot worksomething out through that process and does not pay, the borrower will receive afinal notice, which says the agency intends to collect what is owed and gives 30days to comply, said Daniel J. Pilla, a tax litigation consultant and the author of“How to Eliminate Taxes on Debt Forgiveness,” (Winning Publications, 2013). The letter also notifies individuals of their right to appeal, he added, a process thatstops the collections process.A few other options are available for people who cannot afford to pay the bill.If the amount owed is less than $50,000, they can apply for a monthly paymentplan online, according to the I.R.S., or request a plan by filing Form 9465 (peoplewho owe more than $50,000 must file that form ). Some taxpayers may alsoqualify for an “offer in compromise,” where the I.R.S. agrees to settle the tax billfor less than the full amount.Mr. Pilla said taxpayers could also try to prove that their monthly income wasconsumed by necessary living expenses, which may cause the I.R.S. to deem thedebt “currently not collectible.” “That means they will press the hold button on thecollection machine,” he added.Some organizations, including the National Council of Higher EducationResources, a trade group representing student loan servicers and otherorganizations, have brought the tax issue to the attention of members of Congress,but it has not yet gained traction, said Tim Fitzgibbon, vice president for debtmanagement services at the group.For now, people who find themselves with large tax obligations have to figureout how to best navigate the process on their own or with professional help, whichcan be hard to find. The I.R.S.’s free tax preparation service for low- andmoderate-income people is not equipped to handle the complexities.Frank said the tax lawyer he hired to help him negotiate with the I.R.S. wasgoing to cost him $3,000 to $5,000, and he is making plans to sell his home. “Ihave to go through this process,” he said, “which is going to be laborious and expensive."Copyright 2014 The New York Times Company.  All rights reserved.