When should a husband and wife jointly file a bankruptcy? This question often comes up in bankruptcy forum websites and is a very legitimate concern for married people facing bankruptcy. Continue reading
There are over 300,000 federal and state criminal laws in the United States, and there is an uncountable number of federal and state civil laws. Bankruptcy law falls in both the federal and state civil and criminal law status. When it comes to bankruptcy law, there should really be no wonder there are gray areas within all of these civil and criminal laws. Add a complicated type of bankruptcy, like a chapter 13 bankruptcy, to the mix, and you have a major recipe for gray areas within bankruptcy law. Continue reading
Lets face it. When most people finally face the reality they are bankrupt, they are at the place where it can be very hard for them to pay for the help they need to get out of their financial predicament. Most bankruptcy attorneys understand their financial condition, and are willing to provide a free consultation in order to determine whether or not they are in a position to help the debtor. This article is about what some of you may need to know before you embark in free consults with bankruptcy attorneys.
In bankruptcy law, bifurcation is the splitting up of the responsibility to pay debts to your creditors. This can happen when there is a divorce during the time a married couple has filed a bankruptcy jointly. Normally, a divorce will effect a chapter 13 bankruptcy more than it will a chapter 7 bankruptcy if a bifurcation is the result. Continue reading
A chapter 13 bankruptcy, called the wage earner’s bankruptcy, is a reorganization plan for individuals to pay back a part or all of their unsecured debts over either a 3 or five year plan. If you are in a 100% payback plan, you can conceivably borrow money back from your 401 (k) retirement plan to pay your bankruptcy plan off early. Why rob Peter to pay Paul? Continue reading
Since bankruptcy laws allow a bankruptcy court to have a certain amount of latitude in interpreting the laws, how a bankruptcy court handles the reporting of an income change increase in a Chapter 13 bankruptcy can deviate from one district bankruptcy court to the next. Continue reading
From time to time, questions from debtors worried about losing their job because they are being forced to file for bankruptcy protection will pop up on bankruptcy forum websites. One such debtor recently posted this question about her husband’s job: “We are preparing to file Chapter 13, and the one question I have revolves around the fact my husband works for a large retail corporation, and one of the credit cards that will be discharged ($2,800) was issued from his company. My question is can my husband be fired for being in default of this particular card? We are considering selling off personal items to pay for this particular bill before we file, but our bankruptcy attorney advised against this.”
First of all, the bankruptcy attorney was wise in advising the client not to sell items and pay off the credit card. This kind of move can be considered preferential treatment, and because the husband works for the company that provides the credit, this particular preferential treatment can be considered insider preference.
A bankruptcy court trustee would surely go after the funds if such an arrangement was ever made by the debtor. Under certain circumstances, the preferential payments could even cause the bankruptcy to be dismissed.
As to the question about her husband being fired for being in default for that particular card, an employer cannot discriminate against you for filing bankruptcy. It is against the law.
Bankruptcy law under Title 11 USC 525 (b) states: No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;
(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or
(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
In the illustration provided above, the employer would be risking a wrongful termination suit if they fired the husband. They may find other reasons for firing the husband, but but blatantly firing him for filing bankruptcy to discharge the credit debt could easily be proven as wrongful termination in a court of law. Firing him for any other reason during the time frame of the bankruptcy filing process could possibly be construed as wrongful termination, so it might not be wise for a large corporation to do.
No one can positively say what would happen in a particular case, but in order for a debtor to protect themselves against such wrongful termination by an employer during a bankruptcy, it might be wise to consider retaining a lawyer with that type of experience.
- Bankruptcy and the Ride Through Agreement (betterbankruptcy.com)
This week is July 4th week here in the United States. It means we Americans celebrate our heritage by remembering our roots and the price many paid for our freedom. I cannot speak for the rest of the world, but celebrating our freedom here in the United States is one of the great experiences I love celebrating each year. I get to reflect on the significance of going where I want to, doing what I want to, and when I want to without fear of any state authority breathing down my back. That is true freedom. Not everyone around the world gets to experience that type of freedom.
There are others in the United States who will be experiencing in a deeper sense the meaning of true freedom when they celebrate their discharge from bankruptcy in addition to their nation’s freedom. In this case, they will be experiencing financial freedom for the first time in a long time. So in effect for those special people this week who have been discharged from bankruptcy, they will be celebrating freedom for their nation, their self and bankruptcy.
Our Founding Fathers were common men who felt the suppression of being ruled over by elitists who governed them without their being represented in the governing process. It was not uncommon for the state authorities to breath down the backs of common people and demand their laws be upheld whether they were fair or not.
Most of the suppression of the public came in the form of financial suppression. England taxed the colonists without representation, often making it impossible to financially survive. When the colonists could not pay their taxing share, they were often put into debtors prison where more than one eventually died from the harsh conditions.
Often a ruthless financial merry-go-round, the colonists got fed up with the tyranny and revolted. The rest is history, and we celebrate every July 4th the emancipation from authoritarian rule we felt was anything but fair.
Many of the same Founding Fathers were also debtors, and some spent time in the debtors prisons at one time or the other. They understood the necessity of a financial fresh start just as much as a fresh start for the new nation. That is why they incorporated into the Constitution of the United States that Congress was to have the power to legislate bankruptcy law.
Today, bankruptcy laws have involved into a fair system where any United States citizen experiencing financial ruin through debt can get financial relief and begin a fresh new financial start. Unlike in times past, being in debt is no longer a crime, and it is your Constitutional right to begin financially over again.
They don’t put you in prison any longer for being in debt. Instead, you can file for bankruptcy protection, and the federal bankruptcy laws will help you and creditors eliminate any bad financial situation you find yourselves.
As citizens of the United States, Americans can certainly be proud today of celebrating freedom for their nation, their self, and bankruptcy.
- Personal Bankruptcy and Now City Bankruptcy (betterbankruptcy.com)
According to news reports released this past week, Patricia Smith, a former bookkeeper for an auto dealership in Pennsylvania, was convicted of embezzling $10 million from her former boss. She squandered most of the money on luxurious living, but court documents indicate there is over $1 million that may be recoverable. What would happen if Smith filed for bankruptcy to protect those ill-gotten assets?
Since most of the time there is some type of extenuating circumstances that influence the outcome of any legal decision, it might be best to take a closer look at the facts of the Smith case before any question about the remaining assets is answered.
Smith’s crimes took place over a seven year time span. She systematically spent an average of $4,000 a day of money that clearly belonged to the auto dealership. Making only $50,000 a year, Smith spent money that included: traveling by private jet where she spent an estimated $1.8 million; special trips to the theater; buying expensive clothes; purchasing six club level super bowl tickets to take her family to the Super Bowl in Dallas; spending $32,500 for a luncheon for six people; taking a trip to the Vatican that included a VIP tour of the Vatican museum and Sistine Chapel; spending over $600,000 for lodging; taking numerous cruises while traveling first class; spending an additional $715,000 on commercial airline flights; making special VIP trips to the opera; paying high dollars per plate for dinning with various movie stars; and too many other perks too numerous to mention.
News reports shared that Smith explained her sudden wealth by telling family and friends she had gained the money investing in the stock market. Smith now faces 78 months in prison and has to pay restitution of $10,349,569 back to the auto dealership.
If Smith, now approaching retirement age, filed for bankruptcy protection, would the restitution be forgiven and would she be able to keep a portion of her ill-gotten gains? According to court records, she had stashed a certain portion of the $1 million recoverable into various bank accounts.
Under title 11 US Code 523, Exceptions to Discharge in bankruptcy, sub paragraphs (a)(2)(A) states: A discharge of this title does not discharge an individual debtor from any debt for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor’s or an insider’s financial condition.
At the conclusion of the Smith case, the Attorney General was quoted as saying, “[Smith] devised, and intended to devise, a scheme and artifice to defraud and for obtaining money and property by means of material false and fraudulent pretenses, representations, and promises, well knowing at the time that the pretenses and promises were false and fraudulent when made.”
The words of the Attorney General makes the answer to the question originally raised in this article as “NO.” Since Smith was convicted of gaining the money by false pretenses and fraudulent means, filing bankruptcy would not allow her to have the restitution discharged or be allowed to keep any of the ill-gotten assets. These types of gains cannot be protected by filing bankruptcy.
- Common Sense Answers to Bankruptcy Questions (betterbankruptcy.com)