Why You Should (Sometimes) Before Bankruptcy Ask for Arbitration The fine print in your credit card agreement likely gives you–and the credit card company–the right to ask for arbitration.  You can guess that the fine print isn’t in there to help the consumer, but sometimes before bankruptcy you can use arbitration for your benefit. How […] The post Why You Should (Sometimes) Ask for Arbitration by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.

  In Whaley v. Guillen (In re Guillen), 2020 U.S. App. LEXIS 26980, Case #17-13899 (11th Cir. Aug 25, 2020) the appellate court followed the majority rule in finding that a debtor does not have to show a change of circumstances to modify a confirmed chapter 13 plan to reduce the payment to unsecured creditors.   The case involved a plan that had been confirmed with a $20,172 dividend to unsecured creditors, but after confirmation counsel for Debtor filed a fee application for his fees in voiding a 2nd mortgage on the home (for failure to perfect the mortgage) increasing the total fees from $4,900 to $8,295 and correspondingly decreasing the dividend to unsecured creditors.  Debtor filed a new plan post-confirmation reflecting these changes, and the chapter 13 trustee objected asserting that the confirmed plan was res judicata under §1327(a) and In re Tennyson, 611 F.3d 873, 875 (11th Cir. 2010) (the provisions of a confirmed plan bind the debtor and each creditor, whether or or not such creditor has objected to, has accepted, or has rejected the plan).  The bankruptcy court confirmed the modified plan, and the trustee appealed.  The 11th Circuit recognized the effect of §1327(a), but noted an exception to the rule requiring a change of circumstances in §1329 of the code.  §1329 permits modification of confirmed plans to, among other things, increase or decrease the dividend to a class of creditors.  There is no requirement in §1329 to show a change of circumstances, and the courts should not read in a requirement not contained in the code.   The court also found this interpretation was consistent with the statutory scheme of Title 11, noting numerous situations where Congress was clear that it was imposing a 'circumstances' requirement.  The court also found this result to be consistent with its prior decision in In re Hoggle, 12 F.3d 1008, 1011-12 (11th Cir. 1994) which found §1322(b)(5) did not bar debtors from modifying confirmed plans under §1329 to cure post-confirmation defaults.   While Hoggle noted Congressional intent to permit modification of a plan due to changed circumstances not foreseen as of confirmation,  but also noted that the modification provision is flexible.  Such change of circumstances was shown in Hoggle to be a sufficient basis to support a modification, but was not set as a necessary condition for any modifications.Michael BarnettLaw Office of Larry Heinkel, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com

Do you need an IRS tax lawyer in Philadelphia? Contact Philadelphia tax attorney David M. Offen and put his more than 20 years’ experience as a bankruptcy and tax settlement lawyer to work for you. Mr. Offen knows how to negotiate with the IRS to settle tax debt and has helped hundreds of people resolve their past-due tax situation and get free of debt. If you are looking for a highly qualified, professionally-trained and trusted Philadelphia IRS back taxes lawyer, call or email us to schedule your free consultation. We have the experience and knowledge to help you, today! Experienced Philadelphia IRS Back Tax Lawyer As a professional firm dealing with back taxes through our legal services, we are familiar with the complicated procedures of the Internal Revenue Service in tax debt negotiation. Our country’s tax system and structure can be overwhelming for many people, but that’s where we step in to help. We will help you through the entire process so that you won’t need to worry about things the way you are now. And, our law firm provides much more than just IRS tax negotiation. We also solve people’s other debt problems, such as: Foreclosures – learn how you can keep your family home! Intervening with debt collection lawsuits on your behalf Stopping wage garnishments and bank levies Fighting repossession of automobiles Contact a Highly Qualified Philadelphia Tax Debt Lawyer Today! We offer you a complimentary consultation during which together we determine whether IRS negotiation, bankruptcy, or some other legal avenue is the most appropriate and effective path to take. We have successfully helped thousands of clients deal with a wide variety of legal and debt issues including IRS debt and past-due State of Pennsylvania taxes and City of Philadelphia taxes. Our experience and our track record of success will speak for itself, and we’re confident that our firm will provide you with the most trusted Philadelphia IRS back tax lawyer in the Philadelphia area. Contact us today to schedule your free consultation and get free of debt! Negotiating with the IRS To Settle Past-Due Income Tax Debt There are two ways we can help you with your tax burden: IRS Offer In Compromise One is to negotiate what is called an “offer in compromise” (OIC). Simply put, it is when the IRS accepts a lump sum from you that is less than what is owed, but that settles your tax liability in full. IRS Installment Agreement The second way we can help you with your tax debt is to negotiate a pay-off over time, called an installment agreement. Depending upon your financial situation and the amount you owe, you might even qualify for a partial payment plan and have the remainder of the debt forgiven when you’ve completed the plan. How to Beat the IRS in Bankruptcy There are situations where the IRS will not compromise with people owing income tax.  If this happens to you, you still have options to get free of debt, but it requires a careful analysis of the nuances of how past-due income tax is handled in bankruptcy. That’s where we come in. What the IRS Doesn’t Want You To Know Everyone’s heard the two certainties of life according to Ben Franklin – death and taxes. While we can’t offer advice to outsmart the grim reaper, old Ben should have spoken to a bankruptcy attorney who can get taxes discharged. As long as you haven’t been caught for tax evasion or fraud, we might be able to get your unpaid taxes discharged in bankruptcy. Keep reading to learn how filing bankruptcy could help you wipe out old tax debt–and what mistakes could leave you stuck with a tax bill. Taxes Are (Not) Forever There is a common misconception that Federal income tax debts cannot be discharged in bankruptcy. It is true that income tax is a priority debt, and that the government makes it difficult to discharge this kind of debt. But a bankruptcy attorney can discharge a variety of unpaid taxes in a strategic bankruptcy. Cheat on Taxes – Get Stuck With A Bill The IRS has developed a reputation as the most relentless  of our federal agencies. Legendary gangster Al Capone evaded police and paid off prohibition agents–but in the end, it was the Internal Revenue Service that brought him down. Every year, high-profile celebrities and sports players get nabbed trying to dodge the tax collector. Not only is tax evasion a crime—-it also makes you ineligible to discharge your tax debts. Don’t let the Internal Revenue Service sabotage your finances. When Can You Discharge a Tax Debt in Bankruptcy? When dealing with the Internal Revenue Service, it’s important that you choose one of the Philadelphia tax debt attorneys that is knowledgeable and experienced in tax debt. The law is very complex and in order to have tax debt discharged during bankruptcy, the tax debt must meet certain conditions. In short, the tax debt: Must be income taxes. Cannot be payroll taxes or fraud penalties. The tax debt is at least three years’ old The tax debt must have been assessed by the IRS at least 240 days before you file for bankruptcy or must not have been assessed yet. More specifically, tax debt must meet the following conditions to be eligible for discharge in bankruptcy. These rules are followed strictly, and even a two or three day grace period will not be permitted. The Three-Year Rule: The taxes you want to discharge must have been due at least three years before the date you filed bankruptcy. For federal income tax, this is on or around April 15th. State and local taxes will differ. Here’s an example: If you don’t pay your taxes due on April 15th, 2019, you could not file to discharge that debt until April 15th, 2022 at the earliest. If your file for a tax extension, three years runs from the date of the extension, not the date that the tax was due. The Two-Year Rule: You must wait two years from the date you filed your taxes to file for a bankruptcy discharge. This grace period allows you to still get a discharge of your taxes three years from when they came due when filing late. The date your taxes are legally counted as filed depends on when and how you send the information to the IRS. If you send tax returns certified mail via the United States Postal Service, and the postmark is on or before April 15th, the taxes will be treated as if they were received on time, even if they arrive at the IRS office after that date. However, if taxes are mailed after April 15th, or are mailed by a private carrier and arrive after April 15th, the date of filing is the actual date the IRS receives your documents, not the date they were posted. This might seem like a trivial detail, but since these deadlines are absolute, just one day’s delay could be the difference between a tax being dischargeable or not. The 240-Day Rule: If your tax debt passes the previous two tests, there is one more condition: The actual date of assessment must be at least 240 days prior to filing bankruptcy. If your tax debt is a case of simply not paying, then the date of assessment should be close to your filing date. But in tax disputes, the IRS can assess additional taxes for several years after the original assessment was made. If you are involved in any tax action, you should notify your bankruptcy lawyer immediately, as this could seriously impact your ability to have these taxes discharged. Your Philadelphia debt relief bankruptcy attorney can determine if your tax debt meets these requirements and is eligible for discharge. In fact, it is common for individuals to have some tax debt that meets the requirements of the IRS and some that does not. If this is the case for you, your Philadelphia IRS tax relief attorney will determine how much of your tax debt can be discharged and how much you must still pay. When Taxes Can’t Be Discharged in Bankruptcy Unfortunately, not all taxes can be discharged in a bankruptcy case, such as the following: Recently missed taxes. You have to wait three years (at least) before you can file to have bankruptcy taxes discharged. Fraudulently filed taxes. Taxes assessed when no return was filed. Substitute returns filed on your behalf by the IRS do not count towards the filing requirement. Can Bankruptcy Help With Tax Liens? Bankruptcy cannot clear tax liens already placed against your assets. What bankruptcy can do is prevent new liens from being filed or other collection actions from being taken against you, like wage garnishment or a levy on your bank account.. Liens survive bankruptcy intact. That means that you do not personally owe the government the value of discharged taxes as a debt, but the government’s claim to your assets still exists. When this happens, the lien will not attach to assets you acquire after the bankruptcy concludes. If the underlying personal liability cannot be discharged, then not only will the lien survive, but it will also attach itself to assets you acquire after bankruptcy and must eventually be paid to avoid future levies. Examples of Discharging IRS Debt in Bankruptcy One recent client owed the IRS over $55,000 in delinquent taxes, We filed a Chapter 13 bankruptcy case for him, which reduced his monthly payment from $1200 to $750.  At the end of 36 months, the remainder of the debt was discharged! The couple owed over $125,000 in taxes to the IRS, the Commonwealth of Pennsylvania, and the City of Philadelphia. We saved them over $100,000 by filing a Chapter 13 case and got that debt discharged! And these are only two of our many, many clients who have gotten free from tax debt. Disclaimer: while these are true stories of clients we helped, we cannot guarantee the same or similar result in any other matter, including yours. Do You Need Help Negotiating or Filing Bankruptcy on Back Taxes? If you need an expert to guide you through the process of determining how best to handle your IRS debt, schedule your free consultation with Philadelphia tax and bankruptcy attorney David M. Offen by calling (215) 625-9600. You will get your questions answered about how negotiation and bankruptcy can help you with taxes owed to the Internal Revenue Service and/or State and Local Governments. Let us help you get your fresh start. The post IRS Negotiation Attorney Philadelphia appeared first on David M. Offen, Attorney at Law.

THE DEMISE OF NUNC PRO TUNC LEASE REJECTION[1] Bankruptcy Code § 365(b) enables trustees and debtors in possession (“Trustees”) to “reject” or terminate pre-petition leases. This leaves the non-debtor lessor without a lessee and with a “rejection” claim for what may be less than the rent reserved under the balance of the lease.[2] Before a lease is rejected, Trustees must pay and remain current on post-petition rent due under leases.[3] Unpaid post-petition rent is an “administration” claim with priority over unsecured claims and sharing estate assets with other administration priority claims, such as the Trustees’ professionals[4]. Trustees sometimes seek to reject leases with the date of rejection being “nunc pro tunc” or retroactive to an earlier date. This retroactive rejection reduces the Trustees’ and debtors’ estates’ obligations and exposure to landlords for post-petition lease obligations.[5] It’s not good for landlords. Obtaining “nunc pro tunc” rejection required Trustees: (1) moving to reject the lease promptly; (2) promptly acting to set the motion for hearing; (3) vacating the premises; and (4) showing the Landlord had an improper motive in opposing rejection of the lease nunc pro tunc. [6] The End of Nunc Pro Tunc Recently, in Roman Catholic Archdiocese of San Juan v. Acevedo Feliciano, ––– U.S. ––––, 140 S. Ct. 696, 206 L.Ed.2d 1 (2020)(“Acevedo”), the United States Supreme Court, rejected the effectiveness of a nunc pro tunc order. It held: “[f]ederal courts may issue nunc pro tunc orders, or ‘now for then’ orders, … to ‘reflect [ ] the reality’ of what has already occurred …. ‘Such a decree presupposes a decree allowed, or ordered, but not entered, through inadvertence of the court.’ … Put colorfully, ‘[n]unc pro tunc orders are not some Orwellian vehicle for revisionist history — creating ‘facts’ that never occurred in fact.”[7] Call For Free 15 Minute Consultation The End of Lease Rejections Nunc Pro Tunc More recently, In re Donghia, Inc.,[8] applied Acevedo to decline making a lease rejection nunc pro tunc. Following Acevedo, that court, “[p]ut plainly, the court cannot make the record what it is not.” Even if Trustees meet the standard for nunc pro tunc lease rejection, bankruptcy courts seem precluded from granting it by invoking “some Orwellian vehicle” to “make the record what it is not.”[9] Retroactive lease rejections, like Orwell’s Winston Smith,[10] may cease to exist. Remember that the next time someone tries one you or your client. References [1]© 2020 Wayne M. Greenwald [2] Rejection claims may not exceed: (A) the rent reserved by the lease, without acceleration, for the greater of one year, or 15%, not to exceed three years, of the remaining term of such lease, following the earlier of: (i) the date of the filing of the petition; and (ii) the date on which such lessor repossessed, or the lessee surrendered, the leased property; plus (B) any unpaid rent due under such lease, without acceleration, on the earlier of such dates; 11 U.S.C. § 502(b)(6). [3] 11 U.S.C. § 365(d)(3) and (5). [4]11 U.S.C. § 503(b) [5] See, 25 No. 6 J. Bankr. L. & Prac. NL Art. 3 Understanding the Commercial Landlord’s Claims in a Tenant Bankruptcy (“Landlords are adversely affected by retroactive lease rejection because of the effect it may have on their entitlement to priority payments.”) [6] See, In re Donghia, Inc., 2020 WL 2465503, at *3–4 (Bankr. D. Conn. May 12, 2020). citing, In re At Home Corp., 392 F.3d 1064, 1072 (9th Cir. 2004), cert. denied sub nom. Pac. Shores Dev., LLC, v. At Home Corp., 546 U.S. 814 (2005). [7] In re Telles, 2020 WL 2121254, at *1 (Bankr. E.D.N.Y. Apr. 30, 2020), citing, Acevedo, 140 S. Ct. at 700-01. [8] 2020 WL 2465503, at *3 [9] Id. [10] The hero in George Orwell’s book “1984.” The post The Demise Of Nunc Pro Tunc Lease Rejection appeared first on Wayne Greenwald, P.C..

https://catalyst.independent.org/2020/08/22/covid-19-small-business-post-pandemic/-----------Will Small Businesses Stay Closed Post-Pandemic?Can the United States stand to lose the four million small businesses Oxxford predicts?By Luka Ladan August 22, 2020 Economy & Jobs| Articlesfacebook sharing buttonlinkedin sharing buttontwitter sharing buttonemail sharing buttonprint sharing buttonsharethis sharing buttonMore than one million. That is how many small businesses have closed in the United States, due, in one way or another, to the COVID-19 pandemic.According to New York-based Oxxford Information Technology, as many as 1.4 million small businesses closed their doors or temporarily suspended operations in the second quarter. By the end of the year, four million small businesses could be lost. This means job loss of epic proportions: In June, the number of people working at companies with fewer than 500 employees (e.g. the “small business” threshold) dropped by nearly 11 percent from its February peak.Millions and millions of previously employed Americans are being affected, to say nothing of those who enter the job market every year, who they are now competing with.Unfortunately, the short-term economic bleeding could be even worse than anticipated. Thousands of small businesses are closing their doors without reporting closure, which Bloomberg’s Madeleine Ngo describes as “silent failures.” In Ngo’s words: “This wave of silent failures goes uncounted in part because real-time data on small business is notoriously scarce, and because owners of small firms often have no debt, and thus no need for bankruptcy court.”While the immediate economic picture is anything but rosy, the stubborn persistence of the coronavirus also raises longer-term questions. Namely, how will a “black swan” event like the COVID-19 pandemic impact entrepreneurship in the years and decades to come?Entrepreneurship is already an uphill battle. One in five small businesses fails within the first year. By the end of their fifth year, roughly 50 percent have been wiped out. Within a decade, only about a third survive.Then, there is generational difference. The Millennial generation was already more risk-averse than its predecessors, with many young professionals choosing a traditional work arrangement over the turbulence of business formation. Interestingly, Millennials do fancy themselves as entrepreneurial, with 60 percent of Millennials considering themselves entrepreneurs and 90 percent recognizing entrepreneurship as a mentality.However, they are not walking the walk: In 2015, the share of people under age 30 who own private businesses reached a 24-year low, plummeting from 10.9 percent in 1989 to just 3.6 percent. More recently, Guidant Financial found that 12 percent of America’s small business owners are Millennials, although they comprise half of the U.S. workforce.Of course, the Millennial generation’s risk-aversion is not one-dimensional. From student loan debt to an inability to gain market share, there are many explanations for slumping start-up rates, and some are certainly valid. At a time when “cash on hand” is more valuable than ever, entrepreneurship may simply be a bridge too far.Which brings us back to the COVID-19 pandemic: Where does entrepreneurship go from here? More likely than not, an already risk-averse generation will take in a “black swan” event and decide to mitigate risk even further. The sudden vulnerability of America’s labor market will be reason enough, for Millennials and many other Americans, to opt for the “sure thing” of traditional employment, rather than the great unknown of entrepreneurship.Look at it this way: In 2001, only 24 percent of Americans then aged 25-to-34 claimed that fear of failure was keeping them from starting a business. By 2014, 40 percent of the same demographic reported that fear—a 16 percent increase between generations. The COVID-19 pandemic is unlikely to diminish those anxieties, when business failure has become so mainstream.None of these trends bode well for U.S. economy, one dependent on the growth potential of human innovation. There will always be exceptions to the rule (see: Mark Zuckerberg), but would a younger Mark Zuckerberg decide to become an entrepreneur in today’s business climate? Perhaps not.One thing is clear: A large-scale shift away from entrepreneurship is sure to undermine America’s long-term gross domestic product, job creation, poverty, and other economic indicators. Without the entrepreneur, America’s once-extraordinary economic experiment begins looking like the rest.

   The 11th Circuit affirmed a decision coming out of Alabama sanctioning Law Solutions of Chicago (Upright Law) and local counsel $150,000 and disgorgement of fees in 3 cases and barred Upright Law from filing cases in the Northern District of Alabama for 18 months for violation of Rule 9011, §707, and  §526 for filing 3 cases with Rule 2016 disclosures that did not comply with a prior settlement agreement requiring Upright Law to perform certain bankruptcy services such as dischargeability proceedings, stay motions, redemptions, lien avoidances, contested exemptions, reaffirmations, and continued 341 meetings; without charge that had previously been excluded from the list of services performed as part of bankruptcy representation.  This despite no evidence that any charges were actually made, or services in that category actually performed.  The Upright Law firm is a large legal firm based in Chicago that solicits clients through the internet and refers them to 'partner' attorneys who practice in the locality where the clients reside.  While designated as partners, the attorney in this case had never attended a partnership meetings, did not receive year end draws or distributions, and did not know the names of other attorneys in the firm.  The case results for a prior settlement agreement in two cases in 2016 in the Northern District of Alabama concerning Upright's involvement in a car repossession scheme involving referral to companies controlled by an associate of the firm of clients that had cars they wished to surrender, who would then take possession of the vehicle, pay the attorneys fees and filing fee for the bankruptcy, tow the vehicle to another state, and notify the creditor that they had just a few days to pay large fees for the loading, towing, and storing expenses.  As part of the settlement in that case after mediation Upright agreed to $50,000 paid to the estates,  barred the firm from filing new cases in the district for 6 months, and required any cases for clients that had hired them during such bar period filed after such bar to provide the above noted 'excluded services' for free.  About seven months after the approval of the compromise the bankruptcy administrator discovered three cases for clients covered by the settlement where the Rule 2016 disclosure indicated Upright would charge for those excluded services and filed a motion to examine .the transactions and determine whether such disclosures violated the settlement agreement.  Prior to any court action Upright amended the disclosures in accordance with the settlement agreement.    Following an evidentiary hearing the bankruptcy court determined that Upright violated §707 and §526, and that the conduct warranted the sanctions ordered.  The court found that Upright would not have allowed the error to occur had they been operating in good faith.  The bankruptcy court's order also cited at length the prior complaints regarding the repossession scheme.  After the district court affirmed the ruling, Upright appealed to the 11th Circuit.  The 11th Circuit initially found authority for the bankruptcy court to issues sanctions, and found such authority in the debt relief agency provision of §526(a)(2) by the misleading disclosure that Upright was authorized to charge fees not allowed under the settlement agreement.   Upright argued at the circuit level that the bankruptcy court did not have subject matter jurisdiction on some or all of the 6 cases.  First, three of the cases were closed when the sanctions were imposed, and never reopened.  The 11th Circuit disagreed, finding a number of cases indicating court's retained jurisdiction to impose sanctions even when cases are discharged or closed.  Next the court rejected Upright's argument that since the bankruptcy order approving the settlement in the prior litigation had not incorporated the agreement or it's terms, the court lacks jurisdiction to enforce such settlement.1   The 11th Circuit rejected this argument as there is an independent basis for jurisdiction, the bankruptcy provisions on which the motion to examine was based and Upright's compliance with the Bankruptcy Code provide independent grounds for subject matter jurisdiction.  Upright next argued that their due process rights were violated when it imposed sanctions without specific notice that §§526, 707, and rule 2016 were in play.   Due process requires that the attorney (or party) be given fair notice that his conduct may warrant sanctions and the reasons why. Notice can come from the party seeking sanctions, from the court, or from both. In addition, the accused must be given an opportunity to respond, orally or in writing, to the invocation of such sanctions and to justify his actions.  In re Mroz, 65 F.3d 1567, 1575-76 (11th Cir. 1995).The Court found that Upright had ample notice that the bankruptcy administrator was alleging violations of §§526, 707 and Rule 2016 based on the motion to examine, the hearing, the show cause order issued after the initial hearing, the evidentiary hearing on the show cause order, and the post- cause hearing briefing.  The court found Uprights' argument as to the order suspending it's authority to practice to be moot as such suspension had been completed by the date of oral argument. Finally, Upright contended that their conduct was unintentional, and the sanctions were grossly excessive.  Again, all but the $150,000 monetary sanctions had been rendered moot.  Upright alleged the court 'went out of its way to portray Upright in a negative light', referring to the firm as a high-volume, monolithic, internet cartel and bankruptcy mill, and making repeated references to ethical problems with the firm's business model, as well as repeating at length the details of the repossession scam.  The circuit court believed such sanctions were warranted based on a clear violation of §526, the bankruptcy court's opportunity to observe the demeanor and credibility of Upright's witnesses (finding them to be arrogant and indifferent), and finding that the previous sanctions failed to get Upright's attentions. 1 See Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994) wherein Supreme Court found that courts did not retain jurisdiction to enforce settlement agreements simply based on approval thereof..↩Law office of Larry Heinkel, P Aby: Michael Barnett506 N. Armenia Ave.Tampa, FL 33609-1703813 870-3100https://myfloridabankruptcylawyer.com   

This story orginally appeared at https://patch.com/new-york/new-york-city/taxi-drivers-protest-no-coronavirus-relief-sight--------------- Taxi Drivers Protest With No Coronavirus Relief In SightDrivers shut down traffic around city hall to protest a lack of aid, and continued on to medallion creditors who still demand payment.By Documented NY, News PartnerAug 21, 2020 1:19 pm ET Bronx, New York - May 6, 2018: Views of Jerome Street in the Bronx. Bronx, New York - May 6, 2018: Views of Jerome Street in the Bronx. (Photo: Christopher Lee for Documented.)August 21 2020Max Siegelbaum @maxsiegelbaumTaxi drivers parked their cabs and shut down the area around New York City Hall on Wednesday morning to demand help from the mayor. COVID-19 has dried up most of their fares, and creditors are still seeking money for their taxi medallions that have plummeted in value. The New York Taxi Workers Alliance organized the rally, which proceeded from city hall to buildings of taxi loan creditors in Long Island and New Jersey. The organization estimates ridership has dropped between 80 percent and 90 percent during the pandemic. "The brokers, the mayor the banks, they all said they would take care of yellow medallion taxis, but instead, the TLC [Taxi and Limousine Commission) didn't tell drivers the medallion was going to drop from hundreds of thousands of dollars to only $83,000 — leaving many of us with huge debt and it's killing us," one driver said outside City Hall. amNY

Philadelphia Bankruptcy Lawyer to Help You Clear Private Student Loans Are you looking for help with unaffordable private student loans? Generally, most private student loans are not forgiven, so if you are looking for private student loan forgiveness, you will probably be out of luck. However, individuals can discharge their private student loans in bankruptcy if their loans do not qualify for exception to discharge. Here are the circumstances under which you can get rid of private student loans. Call us at (215) 625-9600 for your free, no-obligation consultation if you think one of these circumstances may apply to you and your private student loan. Discharging Student Loans for Undue Hardship You have probably heard student loans are excepted from discharge in bankruptcy unless you can prove that you or your dependents would suffer “undue hardship” if forced to pay them back. This is a notoriously high bar to meet. Very few student loan borrowers can show that they are completely unable to pay back some or all of their student loan debt due to undue hardship. However, not all student loans are the same. Some private student loans fall through the cracks in Bankruptcy law and can be discharged as ordinary unsecured debt. Under Section 523(a) of the federal Bankruptcy Code, a student loan meeting the following criteria is only dischargeable if the debtor can prove “undue hardship.” (8) unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for— (A) (i)an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or (ii) an obligation to repay funds received as an educational benefit, scholarship, or stipend; or (B) any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual There are three circumstances under which private student loans can be discharged as unsecured debt. If Your Loan was Not a “Qualified Education Loan” it is Dischargeable as Ordinary Unsecured Debt If you were loaned money above and beyond the “costs of attendance,” that loan may not be a qualified education loan under the Bankruptcy Code, and you may be able to have it discharged as ordinary unsecured debt. Bankruptcy law references Section 221(d)(a) of the Internal Revenue Code, which provides that interest on an education loan can only be deducted from income for tax purposes if the loan was “incurred solely to pay qualified higher education expenses.” “Qualified higher education expenses” are in turn defined in the Higher Education Act of 1965 as the “cost of attendance.” What expenses are included in the cost of attendance? Tuition and fees Rent or purchase of required equipment or materials Books, supplies, transportation Room and board Allowance for personal expenses If your loan was used for something more than the costs of attendance at your school, call us. We can help determine whether it is dischargeable as ordinary unsecured debt. If You Did Not Attend an “Eligible Education Institution” Your Private Student Loan is Dischargeable as Ordinary Unsecured Debt For the purposes of bankruptcy, a qualified educational institution is a college or other post-secondary school authorized to participate in the U.S. Department of Education Student Loan program. 26 U.S.C. 25A(f)(2) Eligible educational institution – The term “eligible educational institution” means an institution – (A) which is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and (B) which is eligible to participate in a program under title IV of such Act. Page 37 of IRS publication 970 describes an “eligible educational institution” as any college, university, vocational school, or other postsecondary educational institution eligible to participate in a student aid program administered by the U.S. Department of Education. It includes virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions. If the school you attended was not accredited or not eligible to participate in the U.S. Department of Education student loan program, the loan you took out to attend that school may be dischargeable as ordinary unsecured debt. Call us to schedule your free consultation and we will help you find out. If You Did Not Attend School at Least Half-Time, Your Private Student Loan may be Dischargeable as Ordinary Unsecured Debt Under 26 U.S.C. § 221(d)(2) a student must be attending school at least half-time for the private student loan to be subject to the undue hardship test. If you attended school less than half-time, contact us. We can help determine whether your private student loan debt is dischargeable is ordinary unsecured debt. We Can Help You Get Rid of Private Student Loan Debt If you are having trouble paying your private student loan debt, give us a call. We can analyze the facts of your situation and advise you as to whether your private student loan is eligible for bankruptcy discharge as ordinary unsecured debt. We help you assess your entire financial situation, and even if your private student loan is not dischargeable as ordinary unsecured debt or under the undue hardship test, there may be other debt you have that we can get discharged for you, to help you afford your student loan payments. Contact us to get your fresh start.   The post How to Get Rid of Private Student Loans in Bankruptcy appeared first on David M. Offen, Attorney at Law.

Texas lawyers have long bemoaned the tendency of large Texas-based companies to file bankruptcy in Delaware or New York. However, with the collapse in oil prices and the impact of Covid-19 on retail, many large companies are seeking to restructure in Texas. Since January, 36 groups of companies reporting at least $100 million in assets have filed Texas cases. These cases generated a total of 802 individual case filings. Since the filing fee for a case is $1,717, the flood of filings has generated $1,377,034 in filing fees for the clerk’s offices. To arrive at these numbers, I looked at all of the chapter 11 filings in Texas this year. On the petition, there is a place to list estimated assets in ranges of $100-$500 million, $500 million - $1 billion, $1-$10 billion, $10-$50 billion and $50 billion or more. In a few cases, where the petitions did not seem to reflect the assets, I looked further at schedules and first day declarations. In the case of GGI Holdings (Gold’s Gym), I knew that the company had sold for $100 million, so I gave it a bump up to that category. I also aggregated fourteen single asset real estate cases related to World Class Capital into a group of companies although they are not being jointly administered.  Of the 36 groups of cases, 31 filed in the Southern District of Texas, including two $10 billion cases, four filed in the Northern District of Texas and one filed in the Western District of Texas. The Southern District of Texas cases were divided between just two judges, Judge Marvin Isgur and Judge David Jones, who make up that district’s complex case panel. Oil and gas extraction and support services made up 21 of the large groups of filings. There were also a number of well-known retailers filing in Texas, including Neiman Marcus, Stage Stores, JC Penney, Tuesday Morning and Tailored Brands (Men’s Warehouse and Joseph A. Bank). Other businesses likely affected by Covid-19 were fitness chain Gold’s Gym, California Pizza Kitchen and NPC International (franchisee for Wendy’s and Pizza Hut). Of these cases, eleven met my minimum cutoff of $100 million. Another five cases reported assets of at least half a billion dollars. Eighteen cases hit the billion-dollar mark. Two cases broke $10 billion. That means that Texas had twenty billion dollar filings, an incredible showing for less than a year’s time. Out of the 36 groups of companies, three were headquartered outside of the United States, eleven were based in other states, and twenty-two were Texas based (even if they filed in a different Texas district than their home office). Ironically, large number of financially troubled companies filing in Houston could be a boost for that city’s economy. Bloomberg Business Week has estimated that having a major case filed in a city generates $4.5 million worth of economic activity, such as amounts spent on hotels, restaurants and cabs. The thirty-one large filings in Houston and Corpus Christi could be worth at least $139,500,000 in economic activity, not including fees earned by Texas professionals. (While many of the lead law firms were from out of state, nearly every case had a Texas local counsel. If you would like a chart showing the filings, please feel free to email me at [email protected]. 

Bankruptcy Last Resort or Secret Weapon Deciding to file for bankruptcy is a very personal decision. You may agonize over whether it is the right choice, and if you decide that it is, you may wring your hands over the right timing. You may tell yourself that there is still something else you can do to avoid bankruptcy, or you may take a “wait and see” approach. Meanwhile, your financial problems can continue to get worse. In fact, bankruptcy should not be seen as a “last resort” or something that you have to do because you have no choice. Bankruptcy is actually a powerful legal resource – a secret weapon in your financial arsenal. A good Avondale bankruptcy attorney can help you learn more. But here are just some of the many great things that bankruptcy can do for you – and reasons you should see it as a judicious choice: Prompts an Automatic Stay One of the biggest problems you face when you start accumulating debt you can’t pay is harassment from creditors. You may receive phone calls day in and day out – even multiple times a day. You may get called at home and at work. If your creditors break the rules, they may even talk to your neighbors, co-workers, family, or friends, or they might call you very early in the morning or very late at night. You may dread answering your phone or checking your email. When you file for bankruptcy in Glendale, you trigger what is known as the “automatic stay.” The stay puts an immediate stop to any contact from any of your creditors. You may be contacted by a creditor or two who didn’t update their information quickly enough with their call centers. But after you let them know you have filed for bankruptcy  you shouldn’t hear from them again. If you do, you can take action against them.  Saves Your House If you let your credit problem go, you may have to start selling assets. You may not have any other recourse if you don’t take steps before then. If you own your home, that may mean eventually selling your house – either to downgrade to something cheaper or to move in with family or make some other arrangement. If you file for bankruptcy, you can keep your house. Chapter 7 bankruptcy in Mesa allows for a homestead exemption. So, unless you own a very expensive house outright, your house will not be seized to pay creditors. If you have fallen behind on your mortgage, you can file for Mesa Chapter 13 bankruptcy to include the amount you owe in a debt repayment plan. You’ll save your house from foreclosure and deal with your debt problem at the same time.  Saves Your Retirement Accounts Instead of selling your assets to pay your debts, you may think to cash in your retirement accounts to pay off your debts. However, doing so would be a big mistake. You’ll only be pushing your problem down the road – you may pay off your debts, but you’ll find yourself without the resources you need when you retire, creating a financial crisis when you have fewer solutions.  Fortunately, retirement accounts are among the assets that you can exempt from a bankruptcy filing. You don’t have to worry that creditors will take legal action against you and seize your account. You can file for bankruptcy and protect your retirement savings while eliminating your debt or making it more manageable.  Bankruptcy can help you take control of your finances, rather than waiting until your creditors are taking action against you and you no longer have any choices. Talk with a bankruptcy attorney serving Gilbert to determine how bankruptcy can help you get maximum debt relief and allow you to reach your financial goals.  My AZ lawyers are ready to help if you live in Mesa, Glendale, Tucson, Phoenix, or the surrounding area. An experienced and dedicated bankruptcy attorney from our team will help you understand your rights and responsibilities under bankruptcy law, as well as how bankruptcy can help you gain the freedom you seek from overwhelming debt. We represent individuals interested in Chapter 7 bankruptcy or Chapter 13 bankruptcy, as well as businesses. Call our bankruptcy law office to schedule a consultation today. Arizona Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Email: [email protected] Website: http://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Bankruptcy Last Resort or Secret Weapon appeared first on My AZ Lawyers.