Many times the reason why people choose a Chapter 13 over a Chapter 7 bankruptcy is because they are behind on their mortgage or auto payments and need time to get caught up. If you are behind on your payments and you are wanting to get caught up then a Chapter 13 would allow you to consolidate your payments or balances into a single monthly payment that you would make to a Trustee of the Court.

If you would like to learn more about how a Chapter 13 or a Chapter 7 bankruptcy could help you contact Jill McDonald at 727-231-4300.

  As with most legal questions you may ask the answer will vary.  I’m sure that’s not what you wanted to hear, but it does depend on the type of civil judgment against you. If the judgment is for a traffic fine or something similar then the answer is NO. Fines for violating the law are not dischargeable through bankruptcy. But if your judgment was a credit card, repossession or one of several other types of civil court judgment then the answer is YES. Those types of judgments can be discharged in a bankruptcy.

 If you want to talk to an experienced bankruptcy attorney about your specific circumstances then give Jill McDonald a call at 727-231-4300 or visit our website at JillMcDonald.com

This is an article that was published in BusinessWeek magazine. We had recently written an article ourselves discussing this topic. If you would like to discuss other options that will eliminate your debt then contact a bankruptcy attorney.

Click here to go to BusinessWeek’s website and read their article.

Not so long ago we had a middle-aged woman visit our office. Her husband recently lost his job and couldn’t find another. They were financially strapped. She was pondering the idea of going out and getting a second job herself so that they could pay their bills, or she wondered if there were another solution.

In talking to some of her friends bankruptcy was brought up as a possible solution but she couldn’t get past the moral or social stigma that it brought with it. They had always paid their bills on time before he was let go. They felt that they were a responsible couple who just were going through a tough time.

She showed up in our office with many concerns about filing a chapter 7 or chapter 13 bankruptcy. Would the records of the bankruptcy be easly accessed? Could this hurt them in finding future employment? What about the social implications? I told her that most employers wouldn’t even ask that kind of information from employment candidates. I answered all of her questions patiently and provided her the information she needed to make an informed decision. I told her about the many famous individuals through history that had filed bankruptcy, including Henry Ford, Donald Trump, Thomas Jefferson, and Walt Disney to name a few. Although she wasn’t ready just yet she was able to go home think things through and talk them over with her husband. Within a couple of days she called our office. She had talked it over with her husband and they were going to file. They had come to grips with the prospect of filing and were now free from fear or worry. They knew that this was going to be a new beginning for them, not a social disaster as they had first thought.

This story isn’t an isolated incident. We have many people who contact our offices and are very concerned about filing bankruptcy. They wonder if it’s morally right. They have always paid their debts and feel guilty to not repay their debtors. Sometimes bankruptcy can be a very emotional decision, that won’t go away. But through research and some conversation there can be clarity brought to the situation. So that an informed decision can be made. Bankruptcy is a tool designed to help people who may be in that tough situation. It can offer a fresh start for those that may be in some sort of financial hardship. Whether that is through credit card debt, medical bills, home foreclosure, etc.

 Yes credit counseling is another option that some may seek. But credit counseling could end up being more damaging to your credit. When you enter credit counseling you are probably already not able to make your monthly payments. With each month that goes by that you don’t make a payment your credit scores go down. Where if you file bankruptcy your debt may be discharged within four months allowing you a new start. With each client, I have found that once I am able to sit down and talk to them, addressing each issue and offering more information, they are able to move forward with a new, educated perspective. If a person meets the right requirements and has become educated about filing bankruptcy they can make an informed decision about it. Leaving the social stigmas behind and making a fresh start.

You wouldn’t go get a haircut without being prepared would you? Just the same you’ll want to make sure that you are prepared to meet your attorney.You will want to make your initial meeting as productive as possible. A bit of preparation on your part could save your attorney some time and yourself some money, if it helps get your case filed sooner.

Your attorney will want know about you. How to get in contact with you and a bit about your background. There will also be lots of questions about your current financial situation and also some historical questions as well. Be sure to tell your lawyer everything and to be completely honest and upfront. If you could jot down some notes beforehand of your finances that may be helpful. You will be asked to fill out a complete packet later on so this would help you out as well.

If you’re in a foreclosure proceeding be sure to bring copies of anything you have pertaining to that. Any correspondence that you’ve had with creditors will be helpful. If you have upcoming pre-trial or trial dates you should also know those.

Questions to ask your potential lawyer

There is no silly question, keep in mind that this is your financial situation that you are discussing. You should ensure that you completely understand everything that the attorney is telling you. Prepare a list of questions to take with you to your first meeting. Some questions you might ask a bankruptcy lawyer would include:

• Should you file bankruptcy?
• What might your other options be?
• How many bankruptcy cases has he or she handled?
• What percentage of his or her practice is in the area of expertise that you need?
• Does the lawyer usually represent debtors or creditors?
• What problems does the lawyer foresee with your case?
• How would the lawyer go about handling your situation? What is the process?
• How long will it take to bring the matter to a conclusion?
• How would the lawyer charge for his or her services?
• Would the lawyer handle the case personally or would it be passed on to some other lawyer or support staff in the firm? If other lawyers or staff may do some of the work, could you meet them?

Along with these questions you might want to ask about their charges and how they charge. Do they charge hourly, is it a flat fee and if so what is the fee for their services. Before you settle on the attorney if you haven’t seen it yet ask them for a copy of their retainer agreement and have it explained to you before you hire them.

Keep in mind that in the end the Attorney you hire is working for you. If the attorney doesn’t understand this relationship, then you may want to keep looking.

There are a couple of options for an individual that owes the IRS.

• Payment Agreement – Installment Agreement / Payment Plan
• Settlement – Offer a compromise on payment
• Discharge - File Bankruptcy
• Expiration – Let the Statute of Limitations expire
• Abatement – Adjust the amount owed

Bankruptcy is the process that affords relief to taxpayers who are unable to alleviate their liability through other means. Many income tax types that are subject to severe constraints otherwise, are fully dischargeable in a bankruptcy proceeding. In a Chapter 7 Bankruptcy you would liquidate or wipe out your obligations (non-dischargeable types only). The majority of chapter 7 cases are without assets because the debtors are able to protect their assets. However, if there exist non-exempt assets, a chapter 7 bankruptcy will result in non-exempt assets being liquidated for the benefit of the IRS or other creditors.

Chapter 13 Bankruptcy is a reorganization whereby taxpayers can restructure their debts and protect their assets. Often, debtors use Chapter 13 Bankruptcy to save their homes from foreclosure and their cars from repossession. Chapter 13 repayment plans are typically 3 to 5 years. Often a Chapter 13 Bankruptcy will stop interest and penalties from accruing throughout the repayment period.

In order for a tax liability to qualify for discharge under Chapter 7 of the Bankruptcy code, all of the following criteria must be met:

1. Tax is for a year for which a tax return is due more than 3 years prior to the bankruptcy filing;

2. Tax returns were filed more than two years prior to the bankruptcy filing;

3. The tax liability was assessed more than 240 days prior to filing of the bankruptcy petition;

4. The liability is not due on Trust Fund Tax;

5. The taxpayer did not attempt to evade or defeat the tax, nor was the tax liability due to a fraudulent tax return;

6. The tax was not assessable at the time of the filing of the bankruptcy petition; and

7. The tax was unsecured.

If you would like to learn more about your options then contact Jill at The Law Offices of Jill McDonald.

We refer our clients to the following websites for the Pre / Post discharge education.

Pre-filing education can be done at http://personalfinanceeducation.com

For post bankruptcy filing education see  http://www.nationalpersonalfinance.com or http://www.getbankruptcycertificate.com

If you would rather take the course via the phone rather than online then another option is to use MyBKnow.com or 1-877-692-5669. They are on Pacific time and they offer phone courses between 8am – 8pm PST. Be sure to use coupon code 7386GGBK and get a discounted price of $35 per course.

Of course there are MANY other companies that offer this education in my opinion these offer the best courses for the lowest amount. Have you used another that you liked better? Tell us about it in the comments section.

If you need to speak to someone about filing bankruptcy then call The Law Offices of Jill McDonald for your FREE consultation.

If a creditor attempts collection efforts on a discharged debt, the debtor can file a motion with the court, reporting the action and asking that the case be reopened to address the matter. The bankruptcy court will often do so to ensure that the discharge is not violated. The discharge constitutes a permanent statutory injunction prohibiting creditors from taking any action, including the filing of a lawsuit, designed to collect a discharged debt. A creditor can be sanctioned by the court for violating the discharge injunction. The normal sanction for violating the discharge injunction is civil contempt, which is often punishable by a fine.

Excerpted from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

We can help stop those calls. Give us a call at the Law Offices of Jill McDonald.

Not all debts are discharged. The debts discharged vary under each chapter of the Bankruptcy Code excepts various categories of debts from the discharge granted to individual debtors. Therefore, the debtor must still repay those debts after bankruptcy. Congress has determined that these types of debts are not dischargeable for public policy reasons (based either on the nature of the debt or the fact that the debts were incurred due to improper behavior of the debtor, such as the debtor’s drunken driving).

There are 19 categories of debt excepted from discharge under chapters 7, 11, and 12. A more limited list of exceptions applies to cases under chapter 13.

Generally speaking, the exceptions to discharge apply automatically if the language prescribed by section 523(a) applies. The most common types of nondischargeable debts are certain types of tax claims, debts not set forth by the debtor on the lists and schedules the debtor must file with the court, debts for spousal or child support or alimony, debts for willful and malicious injuries to person or property, debts to governmental units for fines and penalties, debts for most government funded or guaranteed educational loans or benefit overpayments, debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated, debts owed to certain tax-advantaged retirement plans, and debts for certain condominium or cooperative housing fees.

The types of debts described in sections 523(a)(2), (4) and(6) (obligations affected by fraud or maliciousness) are not automatically excepted from discharge. Creditors must ask the court to determine that these debts are excepted from discharge. In the absence of an affirmative request by the creditor and the granting of the request by the court, the types of debts set out in sections 523(a)(2), (4) and (6) will be discharged.

A slightly broader discharge of debts is available to a debtor in a chapter 13 case than in a chapter 7 case. Debts dischargeable in a chapter 13, but not in chapter 7, include debts for willful and malicious injury to property, debts incurred to pay non-dischargeable tax obligations, and debts arising from property settlements in divorce or separation proceedings. Although a chapter 13 debtor generally receives a discharge only after completing all payments required by the court-approved (i.e., “confirmed”) repayment plan, there are some limited circumstances under which the debtor may request the court to grant a “hardship discharge” even though the debtor has failed to complete plan payments. Such a discharge is available only to a debtor whose failure to complete plan payments is due to circumstances beyond the debtor’s control. The scope of a chapter 13 “hardship discharge” is similar to that in a chapter 7 case with regard to the types of debts that are excepted from the discharge. A hardship discharge also is available in chapter 12 if the failure to complete plan payments is due to “circumstances for which the debtor should not justly be held accountable.”

Excerpted from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov

The timing of the discharge varies, depending on the chapter under which the case is filed. In a chapter 7 (liquidation) case, for example, the court usually grants the discharge promptly on expiration of the time fixed for filing a complaint objecting to discharge and the time fixed for filing a motion to dismiss the case for substantial abuse (60 days following the first date set for the 341 meeting). Typically, this occurs about four months after the date the debtor files the petition with the clerk of the bankruptcy court. In a chapter 13 (adjustment of debts of an individual with regular income), the court generally grants the discharge as soon as practicable after the debtor completes all payments under the plan. Since a chapter 13 plan may provide for payments to be made over three to five years, the discharge typically occurs about four years after the date of filing. The court may deny an individual debtor’s discharge in a chapter 13 case if the debtor fails to complete “an instructional course concerning financial management.” The Bankruptcy Code provides limited exceptions to the “financial management” requirement if the U.S. trustee or bankruptcy administrator determines there are inadequate educational programs available, or if the debtor is disabled or incapacitated or on active military duty in a combat zone.

Excerpt paraphrased from ‘The Discharge in Bankruptcy” electronically published at http://www.uscourts.gov