tag:blogger.com,1999:blog-56181950875663650742024-02-08T03:36:01.376-08:00Bankruptcy Chapter 7 & 13 MinnesotaUpdates on relevant case law and trends in Chapter 7 and 13 in Minnesota.Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.comBlogger53125tag:blogger.com,1999:blog-5618195087566365074.post-15452383476434644792014-01-26T12:06:00.000-08:002014-01-26T12:06:07.064-08:00Chapter 13 Trustee feesTrustee fees..........<br />
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A lot of people don't realize it but in a chapter 13 case the "standing" trustee who administers the funds in a chapter 13 reorganization does charge a fee for their services. Currently in Minnesota it is 5.3%. By statute it can range as high as 10%. The trustee's fee is set by the Attorney General and it can change from time to time. When we draft chapter 13 plans the fee that the trustee will assess is always one of the things that has to be factored in. The trustee, of course, gets paid before anyone else does....LOL....as they have the luxury of managing the money. In general, the larger amount of cases that are filed the lower the percentage fees as there is some economy of scale.<br />
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There are two standing chapter 13 trustees in Minnesota. One handles the vast majority of cases filed which are not surprisingly in the twin cites and surrounding geographical areas. The second handles the "outstate" cases.<br />
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Why do they charge fees? Well......there is a fairly large support staff. In the Minneapolis office where the majority of the cases that I file are managed that would include two attorneys with paralegal support working directly for the trustee. Include as well a small army of clerical staff to manage all the accounting and disbursement tasks. That requires a fairly sizable investment in office space and up to date technology is involved to manage the thousands of chapter 13 cases that they have going on at any one time well. The funds to do so comes from the debtors engaged in chapter 13. So...for every dollar that is paid in the trustee takes out the allowed percentage to fund their operation. <br />
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When I draft plans I will usually be within a point of two of the current allowed fee when I calculate the trustee's fee. However, there is always a provision included that states that the trustee can take up to the 10% allowed by statute as no one knows whether the fees will go up in the minimum 3 to maximum 5 year duration of a chapter 13 plan. That means the plan must be funded at a high enough level to take care of that contingency should it arise. If during the course of a plan the fee goes up what happens is that some of the money that would have gone to pay on general unsecured creditors claims will be diverted to take care of the necessary trustee fees. Similarly that is what happens when unanticipated attorney fees are generated too or perhaps a priority tax claim came in higher than what the debtor had initially estimated.<br />
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Good news to see the 5.3% number currently. It hovered a just over 7% for quite a while. Frankly, I've been filing chapter 13 cases for over 20 years now and I don't recall a time when it was hit the 10% mark.<br />
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If you've got questions about either chapter 7 or chapter 13 bankruptcy cases we'd be happy to speak with you.<br />
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Connect with David Kingsbury at the Kingsbury Law Offices located in Apple Valley and Rochester, Minnesota. Visit our website <a href="http://www.bankruptcylawofficemn.com/">www.bankruptcylawofficemn.com</a> Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com3tag:blogger.com,1999:blog-5618195087566365074.post-6274910297200548582013-02-27T15:26:00.002-08:002013-02-27T15:26:18.221-08:00Financing mortgages after a bankruptcy filing<span style="font-size: large;">Many of my clients are curious/an<span style="font-size: large;">xious about acquiring a mortgage after they file a ba<span style="font-size: large;">nkruptcy case. Can I get one? Will I g<span style="font-size: large;">et one? W<span style="font-size: large;">HEN can I <span style="font-size: large;">get one? </span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">The answer to that I guess is....all in good time my friends. </span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">First off..<span style="font-size: large;">..."Can" <span style="font-size: large;">or "Will" I</span> get a new mortgage after I file bankruptcy<span style="font-size: large;">?</span> The answer to that is "sure"<span style="font-size: large;"> that's an affirmative. <span style="font-size: large;">There is </span></span>nothing in the bankr<span style="font-size: large;">uptcy code<span style="font-size: large;"> stating that mortgage lenders can't give you a <span style="font-size: large;">loan if they want to. Of course, <span style="font-size: large;">e<span style="font-size: large;">ach lender has it<span style="font-size: large;">'s own protocols in terms of how they assess credit<span style="font-size: large;">worthiness and whe<span style="font-size: large;">ther or not they make any<span style="font-size: large;"> particular person <span style="font-size: large;">a</span></span> loan is going to depend on quite a number of factors. A non-exclusi<span style="font-size: large;">ve list of those f<span style="font-size: large;">actors would be s<span style="font-size: large;">ome major items </span>like</span></span></span></span></span></span></span></span></span></span></span> </span></span></span></span></span>nature and len<span style="font-size: large;">gth <span style="font-size: large;">(so stability) of your employment, your current <span style="font-size: large;">debt load and your ability to se<span style="font-size: large;">r<span style="font-size: large;">vice that <span style="font-size: large;">debt along with any new debt<span style="font-size: large;"> you<span style="font-size: large;"> contemplating taking on<span style="font-size: large;">, the fair market v<span style="font-size: large;">alue of the property and the amount of the loan you are looking for<span style="font-size: large;">, et<span style="font-size: large;">c., etc.</span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Look....it's not the wild west out there anymore like we had before the housing<span style="font-size: large;">/mortgage mel<span style="font-size: large;">tdown<span style="font-size: large;"> when pretty much anyone could get a loan on just "stated<span style="font-size: large;">" <span style="font-size: large;">income wit<span style="font-size: large;">hout having to <span style="font-size: large;">provide a shred of documentation<span style="font-size: large;">. Lenders are more cautious now...<span style="font-size: large;">...and with good reason. However...t<span style="font-size: large;">hey have money to lend and i<span style="font-size: large;">nterest<span style="font-size: large;"> rates are s<span style="font-size: large;">impl<span style="font-size: large;">y "great"---historical lows and all.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">How<span style="font-size: large;">ever, there are certain underwriting re<span style="font-size: large;">quirements for some very <span style="font-size: large;">popular loan programs when someone has filed a bankruptcy, had a foreclosure or did a short sale. Here's the skinny<span style="font-size: large;"> on the WHEN question for those who have filed <u><b>bankruptcy</b></u> and are looking to refinance or take out a new mortgage loan<span style="font-size: large;">;</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><u><b>FHA</b></u><span style="font-size: large;">............2 years with reestablished credit.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><b><u>VA</u></b>......2 years with reestablished credit.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><u><b>Conventional financing</b></u>....4 years fo<span style="font-size: large;">r a chapter 7 fil<span style="font-size: large;">er unless documented extenuating circumstances and reestablished credit.</span></span> If a chap<span style="font-size: large;">ter 13 case...2 years from the date of discharge or 4 years from any dismissal.</span></span> </span></span> </span></span></span> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">For those with a prior <u><b>foreclosure or short sale</b></u>....</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><u><b>FHA</b></u>......generally <span style="font-size: large;">speaking 3 years with <span style="font-size: large;">an exception for short sales if the borrower w<span style="font-size: large;">as current <span style="font-size: large;">on all debt at the time of the sale..then there is no waiting period.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><u><b>VA</b></u>......2 years with reestablished credit. </span></span></span></span> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><u><b>Conventional financing</b></u>.......on a short sale it would be 2 to 7 years with a reduced loan to value (LTV) and with re<span style="font-size: large;">established credit. In the event of a foreclosure then it would be 7 years. However, it could be 3 years if documented extenuating cir<span style="font-size: large;">cumstances <span style="font-size: large;">with reduced loan to value (LTV--as above) and with reestablished credit.</span></span></span> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">So...as you can see....<span style="font-size: large;">a prior bankruptcy is not the "kiss of death" in terms of getting a new mortgage. When I first started practicing bankruptcy back in 1990<span style="font-size: large;"> it pretty much was. My how things have change<span style="font-size: large;">d. It went from the "wild west" days I mentioned previously when your pet could almost get a loan to the really rough period we went <span style="font-size: large;">through rec<span style="font-size: large;">ently when eve<span style="font-size: large;">n folks with st<span style="font-size: large;">ellar credit had trouble finding a loan. Every<span style="font-size: large;">thing....gi<span style="font-size: large;">ven time...finds it's own le<span style="font-size: large;">vel. Things are on a mor<span style="font-size: large;">e even keel now and <span style="font-size: large;">it's gett<span style="font-size: large;">ing better. Housing values have st<span style="font-size: large;">arted to rise, banks are more <span style="font-size: large;">willing to give loans to qualified buyers and there is a pent up demand of people who want an<span style="font-size: large;">d need housing. As hous<span style="font-size: large;">ing goes so goes our economy. I<span style="font-size: large;">'m not in the mortgage bu<span style="font-size: large;">siness. <span style="font-size: large;">However, if you are looking for a good mortgage lender I can refer you to a couple. Don<span style="font-size: large;">'t be dismayed if you have or need to file bankr<span style="font-size: large;">uptcy or had short sale or foreclos<span style="font-size: large;">ure events. There's hope. The idea is t<span style="font-size: large;">hat if you are experiencing or have had experienced a financial calamity we can help you make as soft a landing as possible. The goal is to prese<span style="font-size: large;">rve your assets, reduce or elimin<span style="font-size: large;">ate the debt and move forward in a positive fas<span style="font-size: large;">hion.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">If <span style="font-size: large;">you need help please give us a call.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">David D. Kingsbury</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Bankr<span style="font-size: large;">uptcy Lawyer</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">(952) 432-4388</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Offices in Apple V<span style="font-size: large;">all<span style="font-size: large;">ey and Roc<span style="font-size: large;">hester, MN</span></span></span> </span> </span> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: x-small;">*Be advised that the advice given regarding qualifying for mortgages after certain events is deemed reliable and not guaranteed as they are subject to change at any time. </span> </span></span></span></span></span></span></span></span></span></span></span></span></span>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com2tag:blogger.com,1999:blog-5618195087566365074.post-36001020036761098992013-02-20T16:51:00.000-08:002013-02-20T16:51:26.450-08:00Saturday bankruptcy chatterI am scheduled to be a guest expert on bankruptcy matters on your AM 1500 ESPN dial this coming Saturday morning at 8 am. Todd Rooker, a financial planner and noted problem solver, hosts the "Cover Your Assets" radio program. The topics will be lien stripping in Chapter 13 bankruptcy for wholly unsecured 2nd mortgages, the extension of the Mortgage Forgiveness Debt Relief Act which appears to have been extended once again (good thing)....with maybe a little other tax/bankruptcy advice thrown into the mix.<br />
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Both lien stripping and the Mortgage Forgiveness Debt Relief Act warrant attention in these times of low home valuations as either may benefit a distressed homeowner. Join us in discussing these topics.<br />
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David D. Kingsbury<br />
Attorney at Law<br />
(952) 432-4388<br />
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Offices in Apple Valley and Rochester, MNDave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-41407016036863713962013-02-18T11:02:00.000-08:002013-02-18T11:02:12.448-08:00Tax time...what can bankruptcy do for me if I owe?This time of year many people get an unpleasant surprise when they do their returns....what to do if they've been underwithholding and now have a tax liability? Often it is due to the fact that they've experienced some financial distress and took distributions from IRA's, 401Ks or other pension. Maybe there was some unemployment and they neglected to do withholding from that income source. Perhaps there are multiple years worth of tax liabilities and now the IRS or the state tax authority is threatening wage garnishment, bank levy or liens against business or personal property.<br />
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What to do?<br />
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If one can work out a manageable payment plan with the tax authorities...of course that is one way to handle it. Offers in compromise are often brought up in conversations like these but my experience has been that while many people would like them...they are as hard to find as hen's teeth.<br />
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Bankruptcy can offer a solution. Some tax debts are discharged in chapter 7 depending on their nature, age and the status of the filed returns.<br />
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The general rule is that to be discharged in bankruptcy the taxes have to be at least 3 years old and the returns have to have been on file (and filed by the debtor) for at least 2 years. <br />
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There are exceptions to that rule. They have to be income taxes (so sales tax, employee withholding or anything else which would fall under the "trust tax definition will never be eligible for discharge). They can't have been assessed within the past 240 days. Plus....there are events which can "toll" the 3 year aging...such as prior bankruptcy filings or other such situations that prevents the taxing authorities from acting in a collection mode if they chose....like the aforementioned "offers in compromise" or an appeal from an assessment, etc. It is important to note as well that where there has been fraudulent returns filed those taxes will not be eligible for a discharge either.<br />
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If there are liens filed...then they are not dischargeable even if they were old enough and the tax returns had been filed on time as they are now considered a SECURED debt and secured debts are not discharged in bankruptcy. However, often as there is no equity in any of th debtor's property the liens are essentially unenforceable and so the taxing authority may choose to release them on that basis. <br />
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In Chapter 13 even if they are not dischargeable they can be paid as a priority debt in the chapter 13 plan of reorganization. One of the requisites for confirmation of a chapter 13 plan is that it provides for full repayment of any priority tax debt (which would be the non dischargeable tax debts...see the standard recited above for what can be discharged and what can't be). A significant benefit of paying the priority debt through a chapter 13 case is that as of the date of the case filing no more interest or penalty will accrue on the balance. In chapter 13 you have up to 5 years to pay the debt as that is the maximum length allowed for a chapter 13 under the bankruptcy code.<br />
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In summary....there may be something you can do in terms of filing a bankruptcy for relief from your debt problems. Many tax professionals, interestingly, are not aware of the advantages that the bankruptcy can provided overburdened tax payers. <br />
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If you are a Minnesota resident and get a jaw-dropping surprise from your CPA or tax preparer give us a call and we can find some workable solutions for you.<br />
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David D. Kingsbury<br />
Attorney at Law<br />
(952) 432- 4388<br />
<br />
Offices in Apple Valley and Rochester, MN.<br />
Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com1tag:blogger.com,1999:blog-5618195087566365074.post-74161714817241497882013-02-15T09:02:00.000-08:002013-02-15T09:02:29.329-08:00Homeowners association dues still owed after filing a bankruptcy<span style="font-size: large;">Much to some bankruptcy filer's chagrin there is some residual liability for association dues <span style="font-size: large;">that accrue after the ban<span style="font-size: large;">krup<span style="font-size: large;">tcy case has been filed and/or discharged e<span style="font-size: large;">ven for properties tha<span style="font-size: large;">t the debtor is surrende<span style="font-size: large;">ring t<span style="font-size: large;">o the mortgage company in their bankruptcy case. </span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Under 11 USC 523(a)(16) of the <span style="font-size: large;">United States Bankruptcy Code th<span style="font-size: large;">ere is an exception to discharge for any fee <u><span style="font-size: large;">or assessment</span></u><span style="font-size: large;"> that comes due and payable af<span style="font-size: large;">ter the case is fi<span style="font-size: large;">led. Any that were due prior to the case being filed <span style="font-size: large;">are</span> dis<span style="font-size: large;">charged but any that rack up later the debtor is responsible f<span style="font-size: large;">or <u>as long as he or she remains on title</u>. <span style="font-size: large;">I</span>n Minne<span style="font-size: large;">sota that means as long as it takes for the mortgage holders to foreclose and for the redem<span style="font-size: large;">ption period to expire which generally speaking can tak<span style="font-size: large;">e up to 8 months <span style="font-size: large;">from the dat<span style="font-size: large;">e they start it. <span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Some mortgage compan<span style="font-size: large;">ies though <span style="font-size: large;">are notorious in neglect<span style="font-size: large;">ing</span> to fore<span style="font-size: large;">close for long <span style="font-size: large;">period<span style="font-size: large;">s of time....years eve<span style="font-size: large;">n. I have one client who quit making payments on his townhome and moved out in 2009. He filed bankruptcy in May <span style="font-size: large;">o</span>f 2<span style="font-size: large;">011. Now his townhome association is asking the bankruptcy court to let them out of the bankruptcy so they can sue him for the acc<span style="font-size: large;">rued fees and assessments. I underscored assessments above for a reason. I had another client in an unrelated case but with similar circumstances. <span style="font-size: large;"> They had been out of it for at least a year and a half and their bankruptcy petition and <span style="font-size: large;">Chapter 13 plan </span>stated that they were surrende<span style="font-size: large;">ring the real es<span style="font-size: large;">tate. Time went on...no foreclos<span style="font-size: large;">ure. At some point a <span style="font-size: large;">w</span></span></span></span><span style="font-size: large;">ater pipe burst. $10K in repairs as it leaked through is unit into common areas, etc. <span style="font-size: large;"> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Interestingly enough, a strict reading of the bankruptcy co<span style="font-size: large;">de <span style="font-size: large;">indicates that th<span style="font-size: large;">e</span> excepti<span style="font-size: large;">on to discharge does not apply in Chapter 13. So you'd <span style="font-size: large;">assume then there would be no liabil<span style="font-size: large;">ity. </span></span>I was <span style="font-size: large;">at a<span style="font-size: large;"> <span style="font-size: large;">National Association of Chapter 13 Trustee's convention a cou<span style="font-size: large;">ple of year<span style="font-size: large;">s ago in Ana<span style="font-size: large;">heim, <span style="font-size: large;">CA. One <span style="font-size: large;">of the judges on the panel mentioned this<span style="font-size: large;"> and I took not<span style="font-size: large;">e o<span style="font-size: large;">f it as I thou<span style="font-size: large;">ght it was inter<span style="font-size: large;">esting<span style="font-size: large;"> and perhaps us<span style="font-size: large;">eful. To date I have now had two cases in chapter 13 where the townhome associat<span style="font-size: large;">ions have pursued my clients for these <span style="font-size: large;">fees/ass<span style="font-size: large;">essments in C<span style="font-size: large;">hapter 13. <span style="font-size: large;">My</span> answer to the creditor's attorney<span style="font-size: large;">s the first time this ca<span style="font-size: large;">me up </span>was <span style="font-size: large;">"tough luck"...the exception to discharge you refer to has no application in Chapter 13. <span style="font-size: large;">He<span style="font-size: large;"> bought it and went away<span style="font-size: large;"> because I either convinced him I was right or they simply didn<span style="font-size: large;">'t w<span style="font-size: large;">ant to <span style="font-size: large;">litigate it. Either way...they haven't bothered my client since<span style="font-size: large;"> as far as I know. </span></span></span></span>The second which was just recent press<span style="font-size: large;">ed </span>it. So I planned to defend my client in court to stop the creditor action which would ultimately lead to collection against my client for a debt I assumed w<span style="font-size: large;">as dischargeable. Like a lot <span style="font-size: large;">of things....all is not as simple as it seems. <span style="font-size: large;"> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Do<span style="font-size: large;">ing my due diligence in terms of legal re<span style="font-size: large;">search I read the<span style="font-size: large;"> cases my opposing counsel relied on<span style="font-size: large;"> plus</span> I did my own research and found other cases wh<span style="font-size: large;">ich supported my position. <span style="font-size: large;">Unfor<span style="font-size: large;">tunately there was nothing quite on <span style="font-size: large;">point in my jurisdiction. However, after a careful reading of the cases I did find that had a<span style="font-size: large;">t least some relevance </span>it became clear wha<span style="font-size: large;">t the judges dec<span style="font-size: large;">ision would be if he/she relied on prece<span style="font-size: large;">dent from other related cases dealing with <span style="font-size: large;">these</span> issues. My re<span style="font-size: large;">search and analysis boiled down to this; </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">While the statu<span style="font-size: large;">te has no application in chapter 13 the case law de<span style="font-size: large;">termining the n<span style="font-size: large;">ature of the obligation to pay these fees and assessments turne<span style="font-size: large;">d on whether the debt was an obligat<span style="font-size: large;">ion that had aris<span style="font-size: large;">en prior to the bankruptcy case being filed and not whether the exce<span style="font-size: large;">ption to discharge I <span style="font-size: large;">cited in th<span style="font-size: large;">is post applied. </span></span></span>It actually turned on <span style="font-size: large;">interpretat<span style="font-size: large;">i<span style="font-size: large;">on of what seem<span style="font-size: large;">ed to be at the ti<span style="font-size: large;">me an unrelated issue...wh<span style="font-size: large;">ich would be the nature of the claim. If, according to the cases I read..the obligation <span style="font-size: large;">to pay these post petition fees/assessments were determined to be </span></span></span></span></span></span></span>a contractual obligation there was a good argument that the debt would be incl<span style="font-size: large;">uded in<span style="font-size: large;"> the bankruptcy as obligations to pay under the t<span style="font-size: large;">erms of the contract </span> was incurred pre-filing. Then actually the <span style="font-size: large;">exception to discharge issue was relevant. But.....<span style="font-size: large;">a</span></span>lternatively, if it was a<span style="font-size: large;">n obligation that <span style="font-size: large;"><span style="font-size: large;">occurred</span> due to <u>covenants</u> running with the land...then it was a post-petiti<span style="font-size: large;">on debt. <span style="font-size: large;">If a post <span style="font-size: large;">filing obli<span style="font-size: large;">gation under the covenant theory then whether o<span style="font-size: large;">r not it is dischargeable is not an issue <span style="font-size: large;">as one cannot discharge debts w<span style="font-size: large;">hich arise post-petiti<span style="font-size: large;">on. </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span>The state court decision I consulted which appe<span style="font-size: large;">ars to me to contro<span style="font-size: large;">l here </span></span>turned on the court looking to and interpreting the Declarations published by the association<span style="font-size: large;"> as the basis for the judge's dec<span style="font-size: large;">is<span style="font-size: large;">ion. I consulted the Declaration for the to<span style="font-size: large;">w<span style="font-size: large;">nhome associat<span style="font-size: large;">ion relative </span></span></span>in my cl<span style="font-size: large;">i<span style="font-size: large;">ent's case and indeed the obligation to pay the <span style="font-size: large;">fees and assessment was </span> state as a convenant. <span style="font-size: large;">T</span>herefore, I reluctantly informed my <span style="font-size: large;">client that it appeared to me that he would be liable and would <span style="font-size: large;">continue to be so until his name c<span style="font-size: large;">omes </span>off title. <span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"></span></span></span></span>Unfortunately<span style="font-size: large;"> for my client when that will ha<span style="font-size: large;">ppen is only a guess</span> <span style="font-size: large;">the mortgage comp<span style="font-size: large;">any still shows no inter<span style="font-size: large;">est in foreclosing on this p<span style="font-size: large;">ro<span style="font-size: large;">perty. Obviously the mortgage ind<span style="font-size: large;">ustry<span style="font-size: large;">/</span>housing mel<span style="font-size: large;">tdown has led to this poor result. Because <span style="font-size: large;">this</span> propert<span style="font-size: large;">y had <span style="font-size: large;">no </span>equity or was not <span style="font-size: large;">anywhere close in <span style="font-size: large;">terms of value to l<span style="font-size: large;">oan balance they have not foreclose<span style="font-size: large;">d</span> and how long they will wait to do so no one <span style="font-size: large;">knows. Until then my client is responsible for those fees and assessments.</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">*</span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;">Note that thi<span style="font-size: large;">s</span> is my personal analysis interpreting how the law would apply to this issue in Minnesota. If you live in another state <span style="font-size: large;">the result with the same facts/circumstances could be completely <span style="font-size: large;">the o<span style="font-size: large;">pposite depending on <span style="font-size: large;">how these issues have been <span style="font-size: large;">reso<span style="font-size: large;">lved</span></span> by the courts in your jurisdiction. </span></span></span></span></span></span></span></span></span></span></span></span></span><span style="font-size: large;"><span style="font-size: large;"></span> </span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span></span><br />
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<span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"><span style="font-size: large;"> </span></span></span></span></span></span></span></span></span></span></span></span></span></span>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-30198668239580753262012-02-15T08:49:00.000-08:002012-02-15T08:59:01.592-08:00What should I tell my creditors???I get this a lot...potential clients come in...we have a chat...they leave...then they contact me once they've decided to file a bankruptcy case and they are wondering what they should tell those collectors that are constantly calling them. Here's the answer....<br /><br /><br /><br />As far as what info to give to creditors....once you've retained us you can let them know you are filing a bankruptcy case and that you've retained an attorney and then give them my name and tel. no. and that is really all you have to tell them. Legally they don't have to stop trying to collect from you because you've hired an attorney. However, if they call here and we verify you've hired us to file a case for you they will leave you alone as long as the case gets filed within a reasonable period of time. Once the case is actually filed then that provision of the bankruptcy code known as the automatic stay arises and then they "legally" have to stop any collection activity or face sanctions from the court. The cite to that provision would be 11 USC 362 of the United States Bankruptcy Code.<br /><br /><br />If you have questions about Chapter 13 or Chapter 7 bankrutpcy for either personal or business we can help you find the answers you need at the Kingsbury Law Office. Bankruptcy cases are all that we do. <br /><br />Visit us at <a href="http://www.bankrutpcylawofficemn.com/">www.bankrutpcylawofficemn.com</a>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com3tag:blogger.com,1999:blog-5618195087566365074.post-90443363981413259972011-11-29T20:37:00.000-08:002011-11-29T21:15:57.895-08:00Engaged in business for the purposes of the Statement of Financial Affairs/other formsIn every bankruptcy petition the debtor must complete a "Statement of Financial Affairs". Part of which is directed to those debtors who have been "engaged in a business". If so, then questions 19 - 25 must be answered. The requirement to furnish this info is if you have are currently or have been in the past 6 years a director, officer, partner, sole proprietor, self employed, are or were a managing executive or have had an ownership interest of more than 5% of the voting or equity securities of a corporation.<br /><br />In my experience many clients often don't consider what they may have been doing as being engage in a business to a level sufficient for the requirement to report to kick in. For example...an adult with a paper route, someone selling handmade jewelry on ebay or craft shows, someone with a rental property collecting rents, etc., etc. All of these examples are considered businesses in the eyes of the bankruptcy court. In both Chapter 7 & Chapter 13 bankruptcy cases the interest in the business (if active) should be scheduled as a property interest (valuation for these purposes is another topic). The income or expense relative to the business should be noted on schedules I & J (the income and expense schedules). Plus the information regarding the business entered into the Statement of Financial Affairs (whether an on-going/active business or not). For the statement of financial affairs the interest should be identified as to the structure of the business...be it a corporation, LLC, partnership or sole proprietor. The tax id will be required (or the last 4 digits of the debtor's social security number). I plug in what the extent of the ownership interest is and who the other owners might be, if any. Plus a general description of what the business activity was....real estate development, remodeling, paper route, jewelry sales...what have you. Lastly, the starting and finishing dates if it is a business no longer operating and/or a start date for an on-going enterprise. There are also questions as to whether there have been any recent financial statements, who has keep the books, who is in possession of the business records, etc. Most of the time this is all fairly simple but it is important info to disclose and the trustee will make inquiries about the business at the creditor's meeting for sure. Basically they want to know if there are any assets there or have been transfers of assets to business creditors or other involved persons in order to determine if there is something there that the bankruptcy estate would be entitled to administer for the benefit of creditors.<br /><br />Also, the local rules where I practice in Minnesota state that in chapter 13 cases any debtor with a business which generates $200 or more revenues is required to submit a "Business income and expense" form. This form indicates what the revenues were for the past 12 calendar months, what the expected monthly income will be going forward and what the anticipated expenses will be on a monthly basis. The expenses need to be broken down with particularity in terms of how much per month for what category of expense. I generally don't do a breakdown for this in chapter 7 although the trustee or U.S. Trustee could certainly request this information if desired.<br /><br />So, at a minimum...if someone is generating at least $200 a month doing whatever it is they do and it isn't for wages (comissioned people are often running a business..anyone who is 1099'd is running a business) the we fill out these forms...and most often even if it is less. Best practice is to disclose all the information rather than to leave it out which could raise issues of bad faith due to the failure to disclose.<br /><br />If you've got questions regarding personal or small business bankruptcy matters we'd be glad to help.<br /><br />David D. Kingsbury, Atty.<br />Kingsbury Law Office<br />(952) 432-4388<br /><br /><a href="http://www.kingsburylawoffice.com/">http://www.kingsburylawoffice.com/</a>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-64359731502353202332011-11-14T07:15:00.000-08:002011-11-14T07:23:31.089-08:00When can one modify a chapter 13 bankruptcy plan?<span class="Apple-style-span" >I recently had a chapter 13 client connect with me. They've been in their chapter 13 for awhile...6 or so. Their plan is confirmed. They've just been thrown a curve ball. His wife is a school teacher. She, in a year's time, will be taking a leave from work for a whole year....apparently unpaid. Obviously this will have an impact on their ability to continue making their plan payments so he's being proactive in contacting me to see how that will affect their bankruptcy case. </span><div><br /></div><div>And the answer is....<span class="Apple-style-span" style="font-family: 'Times New Roman', Times, serif; font-size: 19px; ">If in a chapter 13 case there is a change in income we can sometimes modify the chapter 13 plan to reduce the payments. That means drafting and filing a new plan, drafting and filing new income and expense schedules plus drafting, filing and scheduling a motion for the court to consider the modified plan based on the change in circumstances. That we do often enough...but, of course, there has to be enough income there to still fund a plan at minimum levels in order to meet statutory requisites and that can vary from one person's situation to the next depending on what they've got going on. If it doesn't work (not enough income)...then one can consider a chapter 7 case to see if that relief is available. The trustee cannot acquiesce to "hiatus" of payments for any duration be it long or short as the confirmed plan is set per court order and the trustee does not have that kind of authority...only the judge does. The thing to do is if there is a change that will impact your ability to make payments is connect with me when that event does occur or is certain in the relatively near future. At that point we can discuss your options to determine what the best way to handle that change in income will be..either a modified chapter 13 plan with an adjustment in the payment if possible or we'd also take a look at converting the case to that of chapter 7 if that makes more sense.</span></div><div><span class="Apple-style-span" style="font-family: 'Times New Roman', Times, serif; font-size: 19px; "><br /></span></div><div><span class="Apple-style-span" style="font-family: 'Times New Roman', Times, serif; " ><b><p align="justify" style="color: rgb(51, 51, 51); background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; margin-top: 0px; margin-bottom: 0px; ">If you've got questions about chapter 7 or chapter 13 bankruptcy we'll be glad to help.</p><p align="justify" style="color: rgb(51, 51, 51); background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; margin-top: 0px; margin-bottom: 0px; "><br /></p><p align="justify" style="color: rgb(51, 51, 51); background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; margin-top: 0px; margin-bottom: 0px; ">Attorney David D. <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Kingsbury</span></p><p align="justify" style="color: rgb(51, 51, 51); background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; margin-top: 0px; margin-bottom: 0px; "><br /></p><p align="justify" style="color: rgb(51, 51, 51); background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; margin-top: 0px; margin-bottom: 0px; ">www.kingsburylawoffice.com</p></b></span></div>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-92156038680507579222011-11-08T20:05:00.000-08:002011-11-08T20:33:54.200-08:00Individual or joint bankruptcy filing?I have a lot of people who come in for consults with me and they are wondering if they have to file together or can one or the other file an individual bankruptcy case. If a joint case is filed there are actually two bankruptcy estates. Under 11 USC 302(a) an individual and his or her spouse may file a joint petition under Chapter 7. From a technical standpoint there are two separate bankruptcy cases/estates created. However, in almost every case the estates are consolidated under Bankruptcy Rule 1015(b) and administered as one case. The debtors will have their creditor's meeting scheduled for the same time and the same trustee will be appointed to administer both estates. <br /><br />It usually makes sense to file a joint case when there are joint obligations on a significant portion of the debt. I've had some people fairly surprised to learn that they can't get rid of debt for their spouse if they file a bankruptcy on a creditor. Doesn't work that way...if the spouse has signed on the dotted line..then they are liable too and one person who is liable on an account is not going to get rid of the debt for the other because they've filed a bankruptcy case. On the other hand, if one spouse owes the lion's share of the debt and the other spouse is fairly debt free (meaning they haven't obligated themselves to pay on the debt)....then filing an individual case makes all kinds of sense. The court will always, as discussed in other posts, take the non-filing spouse's income into consideration when determining if the person that does file the bankruptcy case is eligible to file from an income standpoint. That's because the debtor and the non-filing spouse are seen by the court as an "economic unit". I usually get a "that's not fair", especially from people who may have just gotten married recently and where one has brought a lot of debt as baggage into the relationship. Whats "fair" hasn't got much to do with it. However, if the non-filing spouse has debt service of his or her own though that can be and should be factored in to the calculation so not all the income of the non-debtor always counts in an "ability to pay" analysis.<br /><br />Only married persons can file a joint case. So boyfriend/girlfriend...even though it may feel like your married and you've got kids in common, have joint bank accounts or hold title to real estate together..plus any other trappings of a serious and permanent relationship without that marriage certificate you'd be looking at two separate bankruptcy filings as individuals...two filing fees, two attorney fees, two hearings and two separate discharge orders. <br /><br />If you've got questions about chapter 7 or chapter 13 bankruptcy for personal or small business we've got the answers.<br /><br />Kingsbury Law Office<br /><br /><a href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com2tag:blogger.com,1999:blog-5618195087566365074.post-75227108067220129612011-11-06T09:29:00.000-08:002011-11-06T09:38:18.867-08:00Income for non filing spouse's count in BankruptcyI've had many, many clients come in for consults who aren't married but intend on filing an individual case. Perhaps they've been married for decades...maybe they just got married a couple of days ago. Sad news is...the spouse's income counts. That goes for no matter how long you've been married be it long or short...or even if all the debts are separate. "Whoa" they say...that's unfair...none of that debt is even his (or her's).....that's "not fair". Fairness my friends often has very little to do with how the law works.<br /><br />Moral of the story...if you're single and thinking about getting married...and lots people determine they need to file a bankruptcy case so they aren't dragging a bunch of old debt into the relationship...talk to your bankruptcy attorney before you do anything about "tying the knot". Once you're married...then the income counts...no matter what. <br /><br />If you've got questions about consumer or small business chapter 7 & chapter 13 bankruptcy we can help.<br /><br />Kingsbury Law Office--Apple Valley and Rochester, MN<br /><a href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a><br />(952) 432-4388Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-5271053987241396462011-11-02T13:19:00.000-07:002011-11-02T13:45:03.124-07:00Prohibited discriminatory treatment because of a bankruptcy filingI got a message from a financial planner who often refers me clients. He had been speaking with someone who insisted he couldn't file a bankruptcy case because he had it (on "good" authority) that he would lose his state issued contractor's license. Sadly...another case of taking legal advice off of street corners...or worse, taking advice from an attorney poorly versed in the law.<div><br /></div><div>11 U.S.C. 525 of the United States Bankruptcy Code which is entitled "Protection against discriminatory treatment" provides that a governmental unit may not deny, revoke, suspend, or refuse to renew a license, permit, charter, franchise or other similar grant to, condition such a grant to, discriminate with respect to such a grant against, deny employment to, terminate the employment of, or discriminate in respect to to employment against, a person that is or has been a debtor in bankruptcy. It provides the same protection if you are just related to someone who has filed bankruptcy....apparently a concern that the drafters of the statute wanted to address.</div><div><br /></div><div>Another subsection of that provision also protects against discriminatory treatment in regard to student loans....any entity that grants student loans can't discriminate against someone because they've filed a bankruptcy or are related to someone that has done so. They could for some other legitimate reason, of course, but not because of a bankruptcy filing. That would go for the situation with the contractor who is worried about his license too. However...if everything else is good...then a bankruptcy won't be a detriment and the worry about losing his license (or a person worried about not getting a student loan) should not be a bona fide concern.</div><div><br /></div><div>If you've got questions about chapter 7 or chapter 13 bankruptcy for consumers or small businesses we'd be glad to help.</div><div><br /></div><div>www.kingsburylawoffice.com </div>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-20094141079543320932011-11-01T16:45:00.000-07:002011-11-01T17:08:01.109-07:00Exceptions to the general rule for what property comprises a bankruptcy estate<p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; ">For the most part property that a debtor acquires (or becomes entitled to acquire) after filing for bankruptcy is not something that is considered part of the bankruptcy estate administered by the trustee.</p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; "><br /></p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; ">There are some exceptions though. Here's the deal....if the debtor receives or even has a right to receive property of a certain type within 180 days after filing for bankruptcy you must let your attorney know to make the assessment to determine if it can be exempted (protected) for you. Failing to do so could result in a revocation of discharge based on bad faith and non-disclosure of the asset. Not a good result for anyone. In pretty much every creditor's meeting I've ever attended (many thousands) the trustee will make an inquiry as to the potential for the debtor to acquire certain types of property within 180 days of filing their case and will also inform them that if they do...they need to let them know (the trustee assigned to the case) and also their attorney.</p><ul style="text-align: -webkit-auto; background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; "><li>an inheritance (applies if the person dies during the 180 days...as you have the right to inherit at that point...you don't actually have to have received the inheritance within the 180 days...could be years later.</li><li>Life insurance proceeds.</li><li>property received from a marital settlement agreement or divorce decree.</li></ul><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; ">It's rare that these things crop up in an average case...but it does happen...it's happened in some of my cases over the years. It is more likely that the most or all of the types of assets listed above could be exempted in your bankruptcy depending on the value. Your attorney needs to make that analysis for you.</p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; "><br /></p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; ">If you've got questions about chapter 7 or chapter 13 bankruptcy we'll be glad to help.</p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; "><br /></p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; ">Attorney David D. <span class="blsp-spelling-error" id="SPELLING_ERROR_0">Kingsbury</span></p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; "><br /></p><p align="justify" style="background-color: rgb(255, 255, 255); line-height: 16px; font-family: Candara, Arial, Georgia, Tahoma; font-size: 14px; margin-top: 0px; margin-bottom: 0px; ">www.kingsburylawoffice.com</p>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-23937740160030326492011-10-31T11:51:00.000-07:002011-10-31T12:18:09.132-07:00Failure to foreclose on real estate<div><br />I was just at a National Association of Consumer Bankruptcy Attorneys seminar in Colorado Springs this weekend. One of the conversations I had repeatedly over the course of the seminar was that bankruptcy attorneys all over the country are experiencing the same phenomenon…...lenders are taking forever to foreclose. </div><div> </div><div>In a situation with homeowner association dues continuing to accrue that the debtor is still liable for that can be a real problem. Besides that problem specific to townhomes/condos there is also the issue of utility bills still in the homeowners name, issues with liability if someone was injured on the property, etc. <br /><br />There can be a plus side…namely living there with no payment (with the exception of homeowners association dues) if a person is still living there and waiting out the foreclosure. That can be a good option but for those that want to move on in short order the reluctance of a lender to foreclose can be a real problem. <br /><br />I was speaking with a bright attorney in Indiana who is now bringing suit against mortgage lenders for failure to foreclose...the theory being that the debtors are being denied the benefit of their bankruptcy discharge considering that they are saddled with what once was an asset but is now a liability and they can’t get rid of it even though they filed their bankruptcy and were issued a discharge because the lender refuses to cooperate. Novel argument…makes a lot of sense. I see enough of these situations in my practice from time to time that I will be contemplating the same type of suit for my clients caught in that predicament. </div><div> </div><div>If you've got bankruptcy questions or need to file chapter 13 or chapter 7 for yourself or for your business we can help. Find us on the web at </div><div> </div><div><a href="http://www.kingsburylawoffice.com">www.kingsburylawoffice.com</a><br /><br /></div>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-63934947350859061022011-05-11T09:59:00.000-07:002011-05-11T10:11:50.492-07:00HSBC to maintain its freeze on foreclosures in some areas for nowThe nation's 12th largest mortgage servicer and 9th largest bank informed investors last Weds. that the moratorium on foreclosures that has been in place since sometime last autumn will continue for at least a number of months before it resumes foreclosing on defaulted loans. The moratorium came about due to government probes into illegal and faulty loan practices...such as "robo-signing" as it is popularly called when their employees would blindly sign many, many documents without checking the accuracy of the alleged defaults on the loans and other deceptive practices. In April it was one of 14 mortgage companies sanctioned by the Federal Reserve Bank and the Office of Comptroller of the Currency due to their erroneous and illegal procedures. More than 43 thousand home foreclosures were initiated in 2009 -2010. Considering the state of the economy and the housing market 2011 will be yet another banner year for this lender as well as others. The Obama administration and some state authorities are pushing for fines nearing the $30 billion mark in reaction to the past abuses to delinquent borrowers by HSBC and other lenders.Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com1tag:blogger.com,1999:blog-5618195087566365074.post-59800961888639114842011-03-23T14:08:00.000-07:002011-03-23T14:36:03.365-07:00Exempting proceeds from personal injury settlements in Chapter 7 or Chapter 13 bankuptcy casesMidland Credit Management vs. Chatman, MN Court of Appeals filed 3/22/2011 is a case that reaffirms earlier decisions regarding the ability to exempt (protect) proceeds from personal injury settlements as distinguished from being able to exempt the "right of action" in personal injury matters as it pertains to bankruptcy filings.<br /><br />The court followed earlier court decisions wherein they took a "plain meaning" interpretation of the statutory language and also looked at other exemption statutes that sought to exempt proceeds and payments traceable to exempt sources. Those other statutes (as opposed to one under review here which was Minn Stat. Section 550.37, subd. 22) specifically stated that for example "all money <strong><em>arising </em></strong>from any claim on account of the destruction of, or damage to, exempt property", or in another section under the statutes providing for exemptions that the "right to receive present or future payments, or <strong><em>payments received by the debtor</em></strong>" would be exempt. (Minn Stats. Sections 550.37, subd. 9 and 550.37, subd. 25). So there...the language is inclusive and is plain on it's face. The court determined that had the legislature wanted to provide the same treatment for payments received on account of personal injury that it could have provided the same or similar language in the pertinent statute. Since the legislature could have but didn't include that language the court decided that the intent was not to protect the actual payments received on account of personal injury types of funds/payments to give them exempt status and therefore, they are not exempt.<br /><br />Lesson to take from this decision...and which has also been my practice for many years is that all the circumstances have to be taken into account when contemplating a bankruptcy. Exemptions are one important part of the analysis. When a client has a personal injury matter and it is of a level whereas the potential damage award is higher than what we can protect under the federal exemptions found in the Bankruptcy Code then we will most likely consider filing under the state exemptions....but <strong>ONLY IF</strong> it is an unsettled claim at the point of filing. If not...then we have to reassess as this court of appeals decision confirms the prior cases which have held that only the claim or the right to the action is exempt and not the proceeds themselves. The question I always ask is....where is this at? Has it been settled? Has pen been put to paper yet? If not, then all things being equal and we don't have other types of concerns with other assets and the way we need to exempt those to weigh in...then we are good to go. If there has been a settlement...then the funds need to be spent down or converted to exempt assets within the limitations allowed by law.<br /><br />Be advised that this analysis is pertinent to Minnesota bankruptcy cases and none other. If you are in another state other rules or case law may apply.<br /><br />If you've got questions and need some answers regarding issues involved in a chapter 7 or chapter 13 bankruptcy filings for either personal or small business bankruptcy cases we'd be glad to help. Please feel free to connect with my office at your convenience.<br /><br />David D. Kingsbury Attorney at Law<br />-Bankruptcy Lawyer Kingsbury Law Office<br />14827 Energy Way Apple Valley, MN 55124<br />Tel. (952) 432-4388 Fax. (952) 432-4969<br /><br /><a title="http://www.kingsburylawoffice.com/" href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com1tag:blogger.com,1999:blog-5618195087566365074.post-15721549203724966022011-03-08T12:08:00.000-08:002011-03-08T12:24:50.496-08:00Judgment removalJust got off the telephone with a client of mine from 2002. She had just done a credit check and surprised to find a judgment on her record for a debt that was included in her bankruptcy filing. She called my office all bent out of shape and yelled at my receptionist telling her that this was something we should have taken care of for her. I touched on this topic in an earlier post but will take some time to go over it now. As for the problem....we'll take care of it. I pointed out to her that we informed her in writing at the time she hired us that judgments are not removed from the record or credit reports because someone files a bankruptcy case. Of course, she didn't remember that...but that is why we lawyers hang on to every scrap of paper that is generated in a case. She has decided to hire us to perform a judgment removal for her.<br /><br />First off, a person has to understand that bankruptcy takes care of debts. Judgments are simply not debts. They may seem like debts to the lay person but rather they are a legal artifice that helps judgment creditors collect their money. <span id="SPELLING_ERROR_0" class="blsp-spelling-corrected">Typically</span> you need a judgment to do a bank levy, wage garnishment or any of the other less commonly used methods to execute on assets in order to satisfy a judgment. Judgments then, are court orders that state that the court has made a finding after a hearing on the matter and agrees that you owe someone some money. However, and as discussed above...in and of themselves they are not in the nature of debt. Since bankruptcy removes debts and not court orders a discharge of the debt in a bankruptcy case does not serve to remove the record of the judgment.<br /><br /><strong>After </strong>the bankruptcy order has been issued and the debt has been discharged in Federal court (2 different court systems here) we can then file an action in state/district court where the order on the judgment was issued and request an order removing the record of the judgment. The argument is based on the fact that the underlying debt that supported the issuance of the order for judgment is now discharged. A certified copy of the bankruptcy discharge is attached to the application for judgment removal so there are a few steps to take in terms of paperwork, serving the appropriate parties in a timely manner and noticing them regarding a hearing on the matter. In the majority of cases there is no problem getting the judgment removed without any great difficulty.<br /><br />If you have debt issues or questions about bankruptcy filing in regard to either Chapter 7 or Chapter 13 bankruptcy for either individuals or small business do not hesitate to contact us. <br /><br />Offices Located in Apple Valley and Rochester, MN<br /><br />Direct email for Dave <span id="SPELLING_ERROR_1" class="blsp-spelling-error">Kingsbury</span> is <a href="mailto:kingsdav@aol.com">kingsdav@aol.com</a><br /><br />Visit our web site at <a href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a> for information to common questions regarding filing bankruptcy or to download our document package if you'd like to schedule a <span id="SPELLING_ERROR_2" class="blsp-spelling-corrected">consultation</span><br /><br />David <span id="SPELLING_ERROR_3" class="blsp-spelling-error">Kingsbury</span>, attorney<br />14827 Energy Way<br />Apple Valley, MN 55124<br />(952) 432-4388<br />(507) 281-5255Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com1tag:blogger.com,1999:blog-5618195087566365074.post-38277939989097096242011-02-22T15:08:00.001-08:002011-02-22T15:25:57.746-08:00Denny Hecker Bankruptcy FraudIn federal court <span id="SPELLING_ERROR_0" class="blsp-spelling-corrected">Minneapolis</span>, MN Denny <span id="SPELLING_ERROR_1" class="blsp-spelling-error">Hecker</span>, a one-time mover/shaker and auto dealer empire <span id="SPELLING_ERROR_2" class="blsp-spelling-corrected">Mogul</span> in the twin cities was sentenced to 10 years in prison on 2/11/11 for bankruptcy fraud and conspiracy to commit wire fraud. The sentencing judge threw the book at him sentencing him to the maximum called for under the guidelines telling <span id="SPELLING_ERROR_3" class="blsp-spelling-error">Hecker</span> that he did not deserve a break and called him a scoundrel. Harsh words and a harsh sentence. Bad for <span id="SPELLING_ERROR_4" class="blsp-spelling-error">Hecker</span> no doubt but others can benefit from his experience. I'm hoping that his outcome will serve as a <span id="SPELLING_ERROR_5" class="blsp-spelling-corrected">deterrent</span> for anybody coming into the bankruptcy process with less than a full <span id="SPELLING_ERROR_6" class="blsp-spelling-corrected">commitment</span> to total disclosure and candor with the court as well as with their attorney. Lately <span id="SPELLING_ERROR_7" class="blsp-spelling-corrected">whenever</span> I've got someone consulting with me about a <span id="SPELLING_ERROR_8" class="blsp-spelling-corrected">bankruptcy</span> case and they either outright come out and ask me how to "game" the system or I get the sense that they aren't being totally candid with me I've pulled out the example of Mr. <span id="SPELLING_ERROR_9" class="blsp-spelling-error">Hecker</span> as good reason for being "honor bright" and truthful with all things in regard to their bankruptcy filing. It isn't worth it to try and hoodwink the court. You can lose your discharge as Mr. <span id="SPELLING_ERROR_10" class="blsp-spelling-error">Hecker</span> did...plus he still has to pay all the debt and he's spending the next decade in federal prison. That's not a typical result but he's an example that people can and actually do go to jail for bankruptcy fraud. It appears that he was his own worst enemy as he couldn't process the fact that he wasn't fooling anyone anymore. That failure and his continued contempt for the bankruptcy process led to the harshness of his sentence. Word to the wise...full disclosure and play by the rules. There are many benefits in bankruptcy for debtors but some stiff penalties for dishonest debtors. For my own practice...if I get the sense that someone isn't coming completely clean with me about their circumstances I give them a pass. I don't want their case and I won't be involved in it. There are too many other honest people out there who need my help.<br /><br />If you've got questions about the bankruptcy process in Chapter 7 or Chapter 13 for individuals or small business we'd be glad to help. Connect with us at <a href="http://www.kingburylawoffice.com/">www.kingburylawoffice.com</a><br /><br />Dave <span id="SPELLING_ERROR_11" class="blsp-spelling-error">Kingsbury</span>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-39099385457835295822010-12-02T08:28:00.000-08:002010-12-02T08:53:05.197-08:00Debt buyers on a suing spreeI talk with a lot of people who presume that when a lender/bank/credit card company has informed them that the debt they owe has been "charged off" that they no longer owe the money and they, therefore, have nothing to worry about. Nothing could be further from the truth as there are collection firms that buy old debt for pennies on the dollar and hire outside counsel to collect and to sue on the debt. That practice has <span id="SPELLING_ERROR_0" class="blsp-spelling-corrected">soared</span> in the past 3 years as there has been a spate of bad loans and unpaid credit card accounts...which makes the debt for those accounts cheaper and cheaper to buy for those who specialize in this kind of market. It's estimated that outstanding debt on credit cards alone is in the neighborhood of $1.9 TRILLION dollars for 2007...back in the 90's it was in <span id="SPELLING_ERROR_1" class="blsp-spelling-corrected">the</span> neighborhood of $475 billion. Not an insubstantial figure in the 90's but an explosion of debt in most recent years. A consequence of the bad economy no doubt has lead to a plethora of loans and accounts gone bad. It's estimated that $3.2 trillion in consumer debt of all types has been written off since 9/07. For the debt buyers and debt collectors opportunity knocks! Most of the collection lawsuits are small claims or conciliation court matters where most defendants don't show and lose by default. Sometimes they aren't even aware of the lawsuit and many of the affidavits filed by the collectors aren't property verified as required by law.<br /><br />The good news.......even if you've been sued and there are judgments against you is that if the debt was a debt that was dischargeable in nature in bankruptcy prior to acquiring judgment status we can still get rid of that debt for you in a bankruptcy case. There is a bit more to do after the bankruptcy case is discharged in order to remove the record of the judgment from the judgment roll in the court of record that had docketed the judgment. That's advisable because even if the debt is discharged the record of the judgment still survives and often appears on a person's credit report although the debt is now gone and truly uncollectible. Unfortunately anyone looking at your credit later will still see the judgment listed and can only assume it is left unpaid or unsatisfied. That, of course, is an impediment to acquiring new credit at reasonable rates, if at all. Most bankruptcy clients will hire us to perform the judgment removal service for them as well. Best case scenario is, of course, to come and see us before judgments are entered against you to avoid the additional expense and time involved in that process.<br /><br />If you've got debt issues and think you may need to file a bankruptcy we've got answers.<br /><br />David D. <span id="SPELLING_ERROR_2" class="blsp-spelling-error">Kingsbury</span> Attorney at Law-Bankruptcy Lawyer<br /><span id="SPELLING_ERROR_3" class="blsp-spelling-error">Kingsbury</span> Law Office<br />14827 Energy Way Apple Valley, MN 55124<br />Tel. (952) 432-4388 Fax. (952) 432-4969<br /><br /><a title="http://www.kingsburylawoffice.com/" href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-11995323631433026222010-09-28T12:20:00.000-07:002010-09-28T12:23:12.336-07:00Credit CounselingA lot of people can benefit from credit counseling services. Hopefully you can ferret out which one is a good one from the vast array of credit counseling companies who purport they are there to help you but in reality are interested really in lining their own pockets. I found a good article on line on some questions you should ask when considering using one of these companies to help you.<br /><br /><a href="http://www.foxbusiness.com/personal-finance/2010/09/28/questions-help-right-credit-counselor/?cmpid=partner_aol">http://www.foxbusiness.com/personal-finance/2010/09/28/questions-help-right-credit-counselor/?cmpid=partner_aol</a><br /><br />Good luck and remember....if you have questions or a need for an experienced bankruptcy lawyer we are here to help.<br /><br /><a href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a>Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-55825948659736630482010-08-19T14:29:00.000-07:002010-08-19T14:36:37.777-07:00Consumer bankruptcy filings up...AgainRecent statistics reflect that consumer bankruptcy filings in the first 6 months of 2010 totaled 770,117. That is a 14 % increase over last year for the same period and as a matter of fact is the highest total since the Bankruptcy Abuse Prevention and Consumer Protection Act (so-called) was passed in 2005 in an attempt to decrease the amount of bankruptcy filings. Typical government reaction to a problem....try to put a <span id="SPELLING_ERROR_0" class="blsp-spelling-error">bandaid</span> on something to make it look good instead of making real attempts to resolve the problems that push people into bankruptcy like high unemployment, high medical costs and low rates of insurance, predatory lenders and credit card issuers, etc. Since then we've had some efforts at reigning in the mortgage companies and the credit card issuers.....hopefully it will help. Unfortunately the housing market collapse and the <span id="SPELLING_ERROR_1" class="blsp-spelling-corrected">attendant</span> high unemployment are factors that will be around and impacting the <span id="SPELLING_ERROR_2" class="blsp-spelling-error">American</span> economy for some time to come.<br /><br />For information on consumer and small business bankruptcy in Minnesota please connect with us at <a href="http://www.kingsburylawoffice/">www.<span id="SPELLING_ERROR_3" class="blsp-spelling-error">kingsburylawoffice</span></a>.comDave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-87996163592453776852010-07-22T11:51:00.000-07:002010-07-22T12:33:13.763-07:00Debt settlement vs BankruptcyI <strong>must</strong> have some spare time on my hands....been reading a few articles in various newspapers. A timely issue is that of debt settlement companies and are they really providing a <span id="SPELLING_ERROR_0" class="blsp-spelling-error">bonafide</span> benefit/service for a reasonable fee. Frankly....not so much. Let's face it...the economy is in the tank...people are in financial turmoil/stress...perfect environment for the vultures to come out to take advantage.<br /><br />The debt settlement industry has gotten <strong>HUGE</strong>....everywhere you turn in print, TV, <span id="SPELLING_ERROR_1" class="blsp-spelling-error">internet</span>, radio....you name it...someone is hawking a debt settlement or debt "management" program. I actually had a guy connect with me a couple of months ago...personal referral from a lawyer I've done business with. He sent me an email saying that I could make "Tens of thousands of dollars a month for only an hour a day of my time"----I sent him an email back saying it sounded a hell of a lot like a late night television infomercial for flipping houses with a real estate scheme used to before the housing market blew up. He apparently was insulted....cried foul to the guy that referred him to me and that lawyer says he won't refer me bankruptcy cases anymore. Tell you what...if the price of doing business with that guy is acting in concert with his "buddy" to defraud and victimize people like my clients I don't want anything to do with him anyway. My sense was he was going to get a piece of whatever potential business was generated by the referral and he didn't like the fact that I turned his pal down.<br /><br />Back the the article. Says the the Better Business Bureau of Minnesota and North <span id="SPELLING_ERROR_2" class="blsp-spelling-error">Dakota</span> is warning people about misleading debt settlement companies that claim to have a program that can easily either eliminate or reduce credit card debt. Since the recession started...which would be what...late 07' I guess...over 3,500 hundred complaints. 3,500...that's a big number and that is just in 2 states. Plus quite a number of state's attorney generals offices (including Minnesota's) have gone after numerous places like Credit Solutions, Debt Rx USA, Financial Freedom of America, Debt Settlement America, Clear Your Debt and Swift Rock Financial Solutions (never heard of that last one).<br /><br />Most complaints to the Better Business Bureau allege that instead of having the debt settled as promised the debtors were often sued by their creditors and driven deeper in debt all the while thinking that whatever company they had hired where going to be "fixing" everything for them. Some of them ended up having their wages garnished.... WHILE they were in a program of debt settlement.<br /><br />First off....it is never an easy or a quick process that comes without any pain. Don't care how they advertise it...it just ain't so. Plus...there is the significant impact on the debtor's credit score. The creditors don't always stop reporting late payments/missed payments to the credit bureaus...hardly...I think they usually do...debt management program or not. Plus, one thing that I've notice in my practice. They never tell people that if they settle a debt for less than what was owed that the debtor will be issued a 1099 at the end of the year. So guess what? It is an income earning event as far as the IRS is concerned and you have to pay taxes on that "income" at your regular tax rate. Why do they rarely tell people about this? Because 99% of the people looking into it would decide there is a small benefit to be had if they also have to pay taxes on any forgiven debt. Conveniently not part of the conversation I guess.<br /><br />Frankly....I'm a bankruptcy attorney. If you've been reading my posts you know this already. Do I have any faith in debt management/settlement programs. Not much really. I read an article a number of years ago. The IRS had investigated something over 40 of these companies and decided to revoke the non-profit status of a number of them. How many? If you guessed ALL OF THEM---you'd be correct. Interesting eh? I think that sums it up right there. Considering the hit you take on your credit, the exposure to lawsuits, wage garnishments and bank account levy<span id="SPELLING_ERROR_3" class="blsp-spelling-corrected">'s</span> (<span id="SPELLING_ERROR_4" class="blsp-spelling-error">levys</span> they can do w/o warning by the way...nothing like getting a notice from your bank telling you that a creditor cleaned out your account and now your checks are bouncing all over town) I'd suggest that bankruptcy....once you've gotten to that point makes a hell of a lot more sense. It's faster. It's cheaper. It protects you from lawsuits, <span id="SPELLING_ERROR_5" class="blsp-spelling-error">levys</span> and garnishments and discharges the debt giving you the relief you need to get a "fresh start" envisioned by the bankruptcy code and lets you move on with your life and start rebuilding your credit not weighted down by all that old debt. Honestly...by the time people come to me it is one of two things. Either their credit is bad...or it's real good but it's going to be really bad real soon. So---the things that have an adverse effect on your credit have already been set in motion long ago. I mention all of this because people often ask me how badly a bankruptcy filing is going to "hurt" their credit. Honestly it generally helps a heck of a lot more than it hurts. It's not the black kiss of death and it doesn't mean you'll never get credit again. It is scored as another event of your credit report and given a certain "weight"....just like a missed payment or something would be treated similarly. The real "penalty" for filing is that the cost of money goes up...probably for a year or two. Which means you'll pay higher interest for awhile. Most people...or a lot of them anyway are in that boat when they come to see me regardless. The difference is that the <span id="SPELLING_ERROR_6" class="blsp-spelling-corrected">bankruptcy</span> filing is a watershed event. Once it is filed you're no longer taking steps backward...you're actually going forward. Lots of variables work into a credit score. <span id="SPELLING_ERROR_7" class="blsp-spelling-corrected">Longevity</span> and stability of employment, income levels, current debt loads, regular payments, etc. Over the course of time the credit score generally goes up and as more time passes the bankruptcy filing itself isn't such a significant item....creditors you are wooing to give you a loan are more interested in how you are doing now, what kind of debt load you're carrying relative to your income and whether or not you've got some disposable income available to service new debt.<br /><br />If you've got questions about bankruptcy we've got answers. Give me a call at 9952) 432-4388 or visit us at <a href="http://www.kingsburylawoffice.com/">http://www.kingsburylawoffice.com/</a>.<br /><br />Dave <span id="SPELLING_ERROR_8" class="blsp-spelling-error">Kingsbury</span><br />Bankruptcy Lawyer/AttorneyDave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com6tag:blogger.com,1999:blog-5618195087566365074.post-31968678024978636302010-07-21T17:02:00.000-07:002010-07-21T17:14:10.792-07:00Credit card debt--the true cost of paying the minimumI was reading an article in the Dallas Morning News last week while there on a seminar for Chapter 13 Bankruptcy Trustees. It was sobering. Many personal stories of people trapped in a cycle of debt they are having a hard time escaping. One of the many points of the story was regarding how long it really takes you to get out of debt by just paying the minimum balance. Hypothetical situation was $10,000 in debt presuming a 14% interest rate (national average...many of my client's cards are much higher). Payment was set at interest due plus 1% of the balance to determine the minimum payment which apparently is standard as well. At that rate it takes 27 YEARS AND 9 MONTHS to pay off the $10K balance. That is phenomenal. The total payout is $21,166.00 which is more than 2<span id="SPELLING_ERROR_0" class="blsp-spelling-error">x's</span> the initial balance. Friends....obviously this is a good deal only for the bank. Do what you can to lower your interest rates and pay off your cards pronto!<br /><br />If you've done what you can and still can't make it work consider bankruptcy as a viable option. A chapter 7 bankruptcy case can discharge or wipe out unsecured debt like this and if not available to you due to high income, too many non exempt assets, etc., a chapter 13 bankruptcy case will pay off all or part of the debt over a maximum 60 month period. A plan can often provide for payment of just pennies on the dollar for this kind of debt. Even if it was a full repayment plan due to the income available the interest stops dead as of the date of filing for credit card and other unsecured debt. There is hope and a way to manage all of this.<br /><br />If you've got questions about bankruptcy we've got answers. Call us at 9952) 432-4388 or visit us on the web at <a href="http://www.kingsburylawoffice.com/">http://www.kingsburylawoffice.com/</a>.<br /><br />Dave <span id="SPELLING_ERROR_1" class="blsp-spelling-error">Kingsbury</span><br />Bankruptcy AttorneyDave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com1tag:blogger.com,1999:blog-5618195087566365074.post-74195099360581793192010-07-21T17:00:00.000-07:002010-07-21T17:02:45.329-07:00A penny saved may cost you a bundle! Bargain basement bankruptcy attorneys means poor results.I was in court earlier this week. Witnessed a hearing where an inexperienced attorney was representing a chapter 7 client. First the trustee admonished the attorney for using the property tax id number instead of the legal description of the property as the documents call for. Had not the trustee brought this to his attention (he didn't have to) the net result of that would have been an issue clearing title to the property in a subsequent refinance or sale. Some lawyer would have had to bring a motion to re-open the bankruptcy case in order to properly amend the schedules to reflect the correct legal description so the Schedule C could then be filed against the property records. That cost of the motion and the subsequent amendment alone would have cost probably $1,500.00. <br /><br />Besides that it appeared that the client was a realtor. New attorney didn't know enough to ask him about potential commissions from listings the client may have had at the time his chapter 7 case was filed. Sounds like he cost his client $5,000.00 for the value of the commission that could have been avoided had he known enough to ask about it and some pre-bankruptcy planning been implemented.<br /><br />Long story short....maybe the client saved a few hundred bucks hiring this kid. Turned out it cost him thousands and could have cost him even more had not the trustee been gracious enough to clue him in on the legal description problems. Do you REALLY want to hire an attorney with little or no experience....even if they say they are highly rated (easy to get your friends and relatives with a computer to do ratings for you). Think about it. What you pay for an experienced attorney who charges reasonable fees commensurate with their experience is an investment in your bankruptcy case and your future. Look for the bargain basement attorneys and as the Chinese say....."be careful what you wish for"...........you'll get bargain basement results.<br /><br />For help from experienced counsel in all manner of chapter 7 and chapter 13 bankruptcy issues please call my office at (952) 432-4388 and/or visit our website at <a href="http://www.kingburylawoffice.com/">www.kingburylawoffice.com</a>.Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com0tag:blogger.com,1999:blog-5618195087566365074.post-64521134514760717592010-07-12T11:04:00.000-07:002010-07-12T11:20:23.775-07:00Possible relief for Student Loan debtsBack in 2005 when the Bankruptcy Code was amended it more broadly defined what was considered a non-<span id="SPELLING_ERROR_0" class="blsp-spelling-error">dischargeable</span> student loan debt. Going back even further....I can remember when student loans of all kinds were <span id="SPELLING_ERROR_1" class="blsp-spelling-error">dischargeable</span> in bankruptcy albeit they had to be of a certain age. That changed with a rider to the Higher Education bill of 1998 if my memory serves me correctly. (Note that there has always been an "undue hardship" exception and student loans could and can still always be discharged under that provision...but unfortunately proving that a debtor meets that high standard for that is nearly impossible to prove without some sort of severe disability factoring into the picture). <br /><br />At any rate.....memory lane may be a tad bit interesting to those who track bankruptcy legislation but not much use for those who are wondering what is going on in the here and the now. Under the proposed legislation borrowers would still be stuck with the traditional federal loans which would be Perkins and Stafford loans but possibly could get some relief for private lender loans. Even Sallie Mae has indicated a willingness for lightening up on the standards for discharging student loan debt provided there has been a good faith effort to repay over a 5 - 7 year period. Under the old standard it was simply the ticking of the clock...7 years from the date they were first due in repayment or the date they were consolidated into a new loan and they were subject to discharge. Exactly what kind of good faith effort Sallie Mae is talking about here I'm not sure...that would get fleshed out if the legislation that Senator <span id="SPELLING_ERROR_2" class="blsp-spelling-error">Durbin</span> and Congressman Cohen if it gains a foothold and moves through the legislative process if indeed it would become part of the bill at all.<br /><br />So....perhaps there is a little ray of hope. Quite a few of my clients have student loan debt issues and the relief I can offer them is small at this point. We can plug them into a chapter 13 repayment plan to keep their creditors off their backs for up to 5 years and hope that there are rosier financial days ahead where they can then manage them...or maybe we'll get lucky and some new legislation will render those kinds of debts <span id="SPELLING_ERROR_3" class="blsp-spelling-error">dischargeable</span>.<br /><br />If we can help with any questions regarding chapter 7 or chapter 13 bankruptcy cases please feel free to visit our web site at <a href="http://www.kingsburylawoffice.com/">www.kingsburylawoffice.com</a>.Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com1tag:blogger.com,1999:blog-5618195087566365074.post-30243790892474651962010-07-01T08:59:00.000-07:002010-07-01T14:53:10.434-07:00Minnesota Bankruptcy ExemptionsNew exemption limits have come into effect in the state of Minnesota effective July 1, 2010. These will apply in bankruptcy cases where the debtor elects to use the state exemptions rather than the ones found in the Federal Bankruptcy Code (which were also raised this past April 1, 21010). Which exemption scheme to use will be determined by your attorney as that which gives you the most benefit depending on your individual circumstances. Usually we will chose the state exemptions over the Federal ones where there is a great deal of homestead equity as the Federal exemption is only $21,625 or $43,250 in a joint case. However considering the state of the real estate market these days it is a problem we don't see too much any longer. Other issues might be a potential personal injury claim which can be protected under the state exemptions to a much larger degree, etc.<br /><br />Homestead is now $360,000.00 (unless primarily used for agricultural purposes then it is $900K.)<br /><br />Motor vehicles are exempt in value up to $4,400.00<br />Wedding Rings are exempt to the tune of $2,695.00---before last year they weren't exempt at all!<br />Personal goods (home furnishings, clothing, etc.) is now at $9,900.00 per person.<br /><br />There have been raises in others as well but these are the ones of most common concern.<br /><br />For more information on how bankruptcy either chapter 7 or chapter 13 can impact your property please visit our website which is located at <a href="http://www.kingsburylawoffice.com/">http://www.kingsburylawoffice.com/</a> or feel free to call our office at (952) 432-4388.Dave Kingsbury Bankruptcy Attorneyhttp://www.blogger.com/profile/04348214514444783992noreply@blogger.com2