Robin Williams is known for making people laugh. Whether in his stand-up comedy routine or many of his acting roles, comedy has been a staple of Williams’ career. But Williams does not consider his finances a laughing matter, especially since he is having to downsize in order to avoid filing bankruptcy.
Personal Bankruptcy Story
I just read on a bankruptcy forum website a very interesting personal bankruptcy story as told by a male whom has experienced a recent divorce but still shared a mortgage with his ex-wife and one with his daughter.
Here are some excerpts from his story: “I had a nasty end to a relationship last year, which is what led to completely bankrupting me. We owned a house together, and that person is living in the house and making the mortgage payments, which are current. I don’t want to lose the house…I am not sure if my bankruptcy will effect her credit or anything else. Do you? The equity in it is about $70k. If I understand everything correctly, I am allowed $60k in house equity, which my half in this house is $35k, so it should be exempt from the Chapter 7, correct?
My daughter was fortunate enough to buy a little townhouse about 6 years ago. My ex, daughter, and myself all are on the mortgage because my daughter did not have the credit to buy the townhouse. I have never made a payment and my daughter and roommates have always kept the mortgage payments current. There is about $20k equity in the house. Is my daughter in jeopardy if I file bankruptcy?”
Divorce and Bankruptcy
Federal bankruptcy courts are filled with people who are there because of financial difficulties that often result in a divorce. According to some statistics, it is most often the men that file bankruptcy after a divorce. Child and spousal support usually follow the men as well, and it is not uncommon for the male to move from the home, leaving the spouse and children with the shelter. Depending on the divorce decree, the male may have been mandated to pay support for sheltering his ex-wife and children. Divorce decrees before a bankruptcy can often muck up the whole bankruptcy process.
Not only does a male in this situation have to provide support for his ex-wife and children, he now has to provide for himself as well. In today’s society, many households are made up of two or more wage earners in order to survive. Therefore, a male who finds himself in the situation of a divorce can quickly find himself unable to make ends meet with his current job. Instead of moving up on the financial ladder of success, many times those who divorce, especially with children, move down the financial ladder. Debts come and job histories often turn sour.
Filing Bankruptcy May or May Not Be the Answer
In answer to the male’s questions in our illustration above, state or federal exemption laws will play a large role in determining whether or not his former homestead and the townhouse will stay in tact as is.
In this particular illustration, there is the potential for both homestead and townhouse being liquidated in a Chapter 7 bankruptcy. If this happens, the ex-wife’s credit and his daughter’s credit will be affected by both the bankruptcy and any foreclosure following, despite the fact both have been making their mortgage payments on time.
Depending on what bankruptcy court the male files will also play an important part in determining whether or not one or both housing units remain in tact. The best advice any layman can give a male in such a situation is to seek the legal advice of an experienced bankruptcy lawyer familiar with the Bankruptcy District in which you will file.
- Bankruptcy Discharged and Foreclosure Follows (betterbankruptcy.com)
- Community Property and Bankruptcy Laws (betterbankruptcy.com)
- In Debt, Filing Bankruptcy May Not Do These 4 Things For You (betterbankruptcy.com)
- A Quit Claim Deed and How Filing a Bankruptcy Might be Affected (betterbankruptcy.com)
Many of you who are considering filing bankruptcy separately from your spouse are often confused as to what belongs to you and what belongs to your spouse. In all bankruptcy filings, you have to list your assets owned and all your expenses when you make your application to file.
Depending on whether or not you live in a community property state will determine how you divide up your assets when filing bankruptcy separately from your spouse, but when filing bankruptcy jointly with your spouse, there is really no need to divide up your assets. Filing bankruptcy jointly would require you to list all your current assets regardless of how and when you acquired them.
Importance of Knowing State Property Laws
When you are filing bankruptcy, it is important to know whether or not you live in a community property state. If you do, you are required to abide by the community property laws when you file bankruptcy. There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Alaska is an opt-in community property state that gives both parties the option to make their property community property.
Community Property States
A community property state presumes both spouses equally own all marital property and it will be split 50-50 in a divorce. For filing bankruptcy purposes in a community property state, unless your spouse owns property you can prove has never been owned jointly, you will have to list 50% of the value of the property as part of your assets. If you can prove certain property owned by your spouse has never been owned jointly, you do not have to list the property as one of your assets when filing a bankruptcy.
Non-community Property States
In non-community property states, you need only to prove your share of ownership in order to list the asset when filing bankruptcy separately. When filing bankruptcy jointly, there is no need to prove what share of the assets you own.
The IRS can help you decide how community property is determined for a bankruptcy.
IRS publication 555 defines community property as:
that which you, your spouse, or both acquire during your marriage while you and your spouse are domiciled in a community property state
- that which you and your spouse agreed to convert from separate to community property
- that which cannot be identified as separate property
IRS guidance is also given regarding what is considered separate property:
- property you or your spouse owned separately before your marriage
- money earned while domiciled in a non-community property state
- property you or your spouse received separately as a gift or inheritance during your marriage
- property you or your spouse bought with separate funds, or acquired in exchange for separate property, during your marriage
- property you and your spouse converted from community property to separate property through an agreement valid under state law
- the part of property bought with separate funds, if part was bought with community funds and part with separate funds
As you can see, filing bankruptcy separately or jointly can be a complicated process that may require the experience of a bankruptcy lawyer.
- Community Property and Bankruptcy Laws (betterbankruptcy.com)
- Chapter 7 Questions and Potential Answers (betterbankruptcy.com)
- Can Filing Bankruptcy Settle an IRS Debt and Allow You to Start Over? (betterbankruptcy.com)
- Can Filing Bankruptcy Affect a Co-owner of Your Home? (betterbankruptcy.com)
Two of the leading causes for bankruptcy are losing a spouse’s income through a divorce and losing your own job. Many divorces do not end up financially equitable. The eventual separation comes with a large price. For whatever reason, pride or downright vindictiveness, couples who divorce often split the sheets, and their lawyers end up with most of their financial resources. Women, despite common perceptions otherwise, often take the largest financial hit in a divorce. They normally end up with the children to take care of after the divorce, and because many did not work during the marital relationship outside the home, they often don’t have the skills to enter the work force with an adequate paying job once divorced. Too, the child support historically comes at first, but many divorced fathers who don’t end up with the children will stop making child support payments at some point and time, which can be financially devastating to women without work skills. Combine all these facts with a woman who loses a decent job, and you have a recipe for bankruptcy.
This personal bankruptcy story was posted on the internet in January of 2011 as comments in a bankruptcy discussion: “I divorced about 5 years ago and moved with my work. I am a single mom. I lost my job 2 years ago, used up all my savings. I also accumulated a lot of credit card debt. I work and make just enough to pay the basics. I am being sued by [a credit card company] and know I need to answer in 20 days. I would like to ask for an extension to find a good bankruptcy attorney. How do I do this?”
The female debtor in this personal bankruptcy illustration is a single mom, divorced, unskilled, has lost her job and replaced it with a lower paying job, is in credit card debt, and is being sued by her credit card company. She wants to know how to buy time from the lawsuit in order to have enough time to find a bankruptcy lawyer. At least, she is most likely on the right track.
The moment you file a bankruptcy, a judge will order all collecting actions to cease, an important feature called the automatic stay. The automatic stay, applicable to all types of bankruptcy filings, means that the mere request for bankruptcy protection automatically stops and brings to a cessation certain lawsuits, foreclosures, utility shut-offs, evictions, repossessions, garnishments, attachments, and debt collection harassment. That means all creditors will have to go through a US Bankruptcy Court trustee in order to deal with their debtors.
So, in the case of our female debtor in the illustration, the answer to her question is to not worry so much about the lawsuit and go ahead and look for that bankruptcy attorney. When she successfully files for bankruptcy protection, the US Bankruptcy Court can shut down any unfinished lawsuits through the automatic stay, and a discharge of the bankruptcy will allow the female debtor to remove any judgments against her by filing the proper documents in the proper courts.
Divorce and loss of income are not the only factors that cause you to go bankrupt. Becoming bankrupt can happen for a variety of reasons including but not limited to a divorce, loss of income, foreclosure on personal or business property, failure to pay bills on time, health problems, poor business decisions, bad timing, bad advice, or a poor economy. According to the Bankruptcy Institute, the latest statistics show bankruptcies are still on the rise for 2011 increasing by 11% in February.
Maybe like so many other Americans, you have felt you have had to use your credit in order to make ends meet and until times get better. Maybe you are paying only the minimum payments in the form of interest on those cards. If this is case, you might be in financial trouble to the point of being bankrupt. As a general rule of thumb, you are legally financially bankrupt if your current sustainable income will not pay all of your living expenses, pay interest on outstanding loans, and reduce some of your principal on those loans while paying on them for five years. If you are bankrupt, common sense indicates you will need a bankruptcy lawyer in order to properly understand how complex bankruptcy laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt and you live in or around the metropolitan area of Baltimore, Maryland, contact us today. We will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
Many of you may remember Sylvia Browne, an American author and famous self proclaimed psychic guru. At 73 years old, she recently made the New York Times bestselling list with the release of her autobiography entitled Psychic: My Life in Two Worlds. Whether you believe in psychic paranormal activities is a matter of faith, but what you can believe in is the fact Browne claimed in her autobiography that failed marriages from abusive relationships are what led to her having to file for bankruptcy. Browne is not the first famous person that has filed for a bankruptcy and came back to a more financially rewarding life. United States history is littered with famous people who have gone bankrupt only to later recover.
This fact shouldn’t be a surprise to anyone living in the United States. Bankruptcy laws were made because of an amendment to the US Constitution mandating that Congress create such laws to protect its citizens against ruthless practices of creditors in the Old World. The days of sending debtors to prison for life are rightly gone. Instead, the bankruptcy laws have been designed to protect both creditors and debtors from unfair economic practices and to allow honest people to work their way out of a bad financial situation. Today, bankruptcy laws are covered primarily under federal laws, but state bankruptcy laws are made to supplement the details of the law. When a person files for bankruptcy, they do so in a federal bankruptcy court.
Regardless of how good your intentions are, bankruptcy is no respecter of persons. You can be famous, infamous, rich, or poor and bankruptcy can still find you. What is interesting about the Browne case is, with her claiming psychic powers, you would think she would have been given a heads up for events that would cause her to become bankrupt. Nevertheless, there is no shame going bankrupt because it can literally happen to anyone, at anytime and evidently, including psychics.
Having to file or being forced to file for bankruptcy is not a sign of weakness, laziness, immorality, or dishonesty. Becoming bankrupt can happen for a variety of reasons including but not limited to a divorce, foreclosure on personal property, failure to pay bills on time, loss of income, health problems, poor business decisions, bad timing, or just bad advice. Since our bankruptcy laws were designed to help an honest individual work their way out of an unfortunate but honest financial dilemma, there is really no reason to view a bankruptcy as anything other than a tool used by our society to potentially help alleviate a bad financial situation between two parties.
Sometimes, filing for bankruptcy is not a choice you make, but others make it for you. There are basically two kinds of bankruptcies- voluntary and involuntary. Although rare, an involuntary bankruptcy occurs when a creditor legally forces bankruptcy proceedings onto a debtor. The greatest majority of bankruptcy legal proceedings are of the voluntary variety.
Maybe, like Browne, you have experienced a failed marriage from an abusive relationship, and you have found yourself in financial straits after losing that other source of your income. If you have found yourself in a situation where you cannot get out of debt within a five year period, you may be a candidate for filing a bankruptcy, but choosing the appropriate bankruptcy to file can be a complicated and tricky process. Common sense indicates you will need a bankruptcy lawyer in order to properly understand how complex bankruptcy laws may apply in your situation. If you determine you are in need of relief from the stress associated with debt, contact us today and we will help you find a bankruptcy attorney in your area that will help you with any questions you may have on bankruptcy law.
A chapter 13 bankruptcy lasts for about 5 years and a lot can change in a relationship during that time. It should be surprising to see that many people go through a divorce in during this time, but in reality, it is not surprising. Many Debtors go through a divorce because of the financial hardship; they just can’t take it any more. When you decide to go this route when you are in a Chapter 13 bankruptcy, you must consult your bankruptcy attorney before proceeding with anything. Many Debtors hire a divorce attorney, but many times, the divorce attorney requires you to go back through your bankruptcy attorney.
The process that must be taken when you are in a Chapter 13 bankruptcy is a motion to the lift the automatic stay. Since filing your Chapter 13 bankruptcy, a stay has been put into place and now it must be lifted in order for a divorce to proceed. As a Debtor, you must contact your bankruptcy attorney to find out what fees they charge for filing this motion. Your bankruptcy attorney may have different fees if it is uncontested or contested, so make sure the other Debtor in the case is willing to move forward, it will save you both a lot of money, time and grief. Once the stay has been lifted, you can now move forward in filing for divorce. Please contact your bankruptcy attorney as soon as you know you have to go this route, to ensure enough time is allowed to permit the motion to lift the automatic stay to permit the divorce.
For further research you may visit the following site related to bankruptcy:
When you file for a Chapter 13 bankruptcy, some people will include their child support arrears through the Chapter 13 plan. There is some confusion as it relates to the child support and the >Chapter 13 plan. As a Debtor you can only include the amount that you are past due, you can not include the whole amount you plan to pay for child support. Throughout the Chapter 13 plan you must stay current with you post-petition child support obligations. The Chapter 13 trustee requires an affidavit to be signed under penalty and perjury stating that you are making your payments for the child support payments since the filing of you
For further research you may visit the following site related to bankruptcy:
One of the main reasons people have to file a Chapter 7 or Chapter 13 Bankruptcy is because of a divorce. Many times with divorce also comes the additional expense of child support. Filing bankruptcy will not help get you out of having to pay your child support or to help lower your child support payment.
If a Debtor files a Chapter 13 Bankruptcy and owes back child support, the back child support must get paid through the Plan. A Debtor must also start making his regular child support payments and stay current. If a Debtor does not make his child support payments after he has filed a Chapter 13 Bankruptcy, the case will not be confirmed and will get dismissed.
If a Debtor pays his child support up until the point the case gets confirmed and then stops, the Attorney General can file a motion to either dismiss the case or to deny discharge. Sometimes we can get an agreement with the Attorney General to allow the Debtor to pay the amount due post-petition in the bankruptcy, but the Debtor must then start making payments and stay current.
The new bankruptcy law does a lot to protect children and make sure Debtors are paying child support if it is owed.
If you are interested in filing bankruptcy in one of the below cities, please click on the link for additional information:
When you and your spouse decided to cut ties and go your separate ways you thought it would be easy and you would be able to get this divorce behind you quickly and with little pain and move forward in life. When you go to your divorce attorney and they tell you that because you are in bankruptcy, there is a motion that has to be filed in order for you to proceed. The divorce attorney tells you that you need to consult with your bankruptcy attorney to have them file this motion, and depending on which bankruptcy attorney you are using, they will or they won’t file it. If you are with our office you are in luck and we are willing to file the motion, but there are attorney fees involved with filing the motion. If it is an agreed divorce then it is cheaper than one that is not agreed upon. The purpose of this motion is to allow the protection that you afforded under the bankruptcy laws to be lifted for the specific purpose of a divorce to be filed and final. Once the bankruptcy Judge signs the order lifting that protection you are now free to finalize your divorce. If it is going smoothly for you and it is an agreed divorce, then deciding what you are going to do with the bankruptcy will be an easy decision to make. For your sake I hope it is that easy and you will now see the beginning of the end.