Claims for early termination of leases are very common in bankruptcy cases.  Generally costs for preparing the property for the next tenant is covered by rental deposits.  Occasionally claims are made for more substantial damage to the premises.  While most of these do not lead to adversary proceedings, a nightmare factual situation resulted in a 523(a)(6) nondischargeability judgment against a debtor in the Wisconsin case of DeWitt v Jacob (In re Jacob), Case #18-26186-beh, Adv #18-02217-beh, 2020 Bankr. LEXIS 354 (Bankr. E.D. Wis., 11 February 2020).   A detailed history of the facts gives a setting to the case.  Mr. DeWitt, the landlord, purchased a renovated home in May 2016, and lived there with two families of tenants: Mr. & Mrs. Jacob  with their two young children and two dogs; and a Ms. Suchocki with her child.  The Jacobs resided in the basement with use of the living room, bathroom, and kitchen on the first floor.  Mr. DeWitt's bedroom was also on the 1st floor.  Ms. Suchocki rented the 2nd floor bedrooms with use of the first floor common areas.  Mr. DeWitt left for a weekend in August 2016 to take care of his parent's home and dog, and remained there for a time when the Jacobs advised him there was a bedbug problem at the house.  When Mr. DeWitt attempted to have the home inspected and treated for bedbugs, the Jacobs denied access to both Mr. DeWitt and the inspectors.  He later saw Ms. Suchocki and Mrs. Jacobs in his bedroom, which they did not have permission to access, while driving by the house.  Mr. DeWitt then had the police assist him in gaining entry to the home on November 2, and found the property filled with clutter and in disarray.   He returned on November 6 with his parents to install a deadbolt lock on his bedroom door to protect his belongings.  The visit was videotaped by him.  Again police had to be called to allow admittance to the property.  Again trash was everywhere, with no clean surface in the kitchen or bathroom, and refuse scattered on the floors and other surfaces.  Widows were covered by fabric or newspapers, though no structural damage was apparent.  In the video both Mr. and Mrs. Jacobs can be heard yelling at Mr. DeWitt.  Mrs. Jacob raises a baseball bat multiple times, and attempts to deny access to anything but Mr. DeWitt's bedroom.  The deadbolt was installed, but Mr. Jacob exclaimed that he would kick the door regardless of the lock.  Both Jacobs claim that Mr. DeWitt could not remove any property from the premises because they believed it was no longer his, and threatened to 'bash his skull in' if he took any other property.  Ultimately Mr. DeWitt leaves without removing any of his personal property.  On December 6, 2016 Mr. DeWitt files an eviction action against both the Jacobs and Ms. Suchocki.  On 4 January 2017 the court ruled in favor of Mr. DeWitt and finding Mr. Jacob's testimony to not be credible, also noting the evidence could support a referral for criminal prosecution.   The Jacobs were removed from the property on 11 January 2017.  Within hours of the eviction Mr. DeWitt took control of the home and took photographs of the interior.   Trash littered the home in poles, covering the floors.  The walls were damages with holes, drawings in crayon and ash, and scorch or burn marks.  Mr. DeWitt's bedroom door had a large crack, over 12" long.  His bedframe was disassembled, and the mattress and bedding badly soiled.  His eyeglasses broken.  His desk in pieces with a portion burned in a barbecue grill on the patio.  The wall of the garage next to the grill was warped from heat damage.  His personal property was strewn about the property.  Ms. Jacob testified she had removed his clothing from his bedroom, put it in trash bags, and taken them to the garage.  Mr. DeWitt testified that the clothes in the bags were wet and bagged with broken glass and razor blades.  Some of Mr. DeWitt's items were missing, including a BlueRay disc player, an ipod, watches, sunglasses, a cell phone, and photographs and sports medals of priceless sentimental value.  Mr. DeWitt obtained a default civil judgment against the the Jacobs and Ms. Suchocki of  $41,525 on 10 July 2017.   The Jacobs filed for relief under chapter 7 on 22 June 2018.  Mr. DeWitt then filed an adversary seeking to declare $15,000 of the judgment as nondischargeable pursuant to §523(a)(6).  The bankruptcy court noted that the plaintiff in a §523(a)(6) action has the burden of proof to show by a preponderance of the evidence that the claim is nondischargeable, ie that it is more likely than not that the debt meets the elements of §523(a)(6).  This subsection requires 1) an injury caused by the debtor 2) willfully, and 3) maliciously.    As applied to tenant damage to premises, damage by caused by dogs, children, or friends can result in a §523(a)(6) judgment if there is a showing that the debtor encouraged the actions.1     Mere failure to maintain the rental property does not give rise to a nondischargeability claim.2   Here the court examined each item of damage in turn to see if it met the requirements for §523(a)(6).  As to the crack in Mr. DeWitt's bedroom door, the court rejected Mr. Jacob's testimony that it must have come from installing the deadbolt, finding the more likely scenario is that he carried out his threat to break into to the room.  The $745.50 damage related to this was found to be nondischargeable.  As to the bags of clothing packed with razor blades and broken glass, given Ms. Jacob's testimony that she removed the clothing from Mr. DeWitt's bedroom, the Court found that packing his clothing in this dangerous manner is willful and malicious.  Given Mr. DeWitt's testimony that he ultimately had to dispose of the clothing because they were heavily soiled and foul-smelling, the court allowed $2,047.49 as nondischargeable based on calculations of replacement cost provided by Mr. DeWitt.  The court also found that $1,196.52 was nondischargeable for damage to the desk and warped siding.  Breaking and burning the desk is not an accidental occurrence, and cannot be done by mere negligence.  Rather it is a hostile reaction to a relationship that had completely deteriorated.  The court did not find in favor of Mr. DeWitt as to the damages for clean-up and restoration of the house and yard.   The disarray in the house from the November and January videos look about the same, and suggest that the tenants never learned how to keep house, and fall between the lines of crudeness and gross negligence, but not up to that of willful and malicious injury.   Nor did the court rule for Mr. DeWitt as to the bedbug inspections and treatment, given the lack of evidence that the Jacobs willfully or malicously invited the bedbugs into the home.   Finally, Mr. DeWitt did not establish that it was the Jacobs rather than Ms. Suchocki that were the cause of the loss of his personal property such as the Blu-Ray plyer, inhaler, and decorative items. The court found that $3,989.51 of the state court judgment was nondischargeable under 11 U.S.C. 523(a)(6).1  O'Brien v. Sintobin (In re Sintobin), 253 B.R. 826, 830 (Bankr. N.D. Ohio 2000). ↩2  In re Merkman, 604 B.R. 122, 130 (Bankr. D. Conn. 2019)(collecting cases)↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://tampabankruptcy.com

Debt Consolidation: Is It Right for You? We all carry a little debt from time to time (or all the time). But at times, our debt becomes unmanageable. Either we weren’t careful with our finances and those balances creeped up on us until we were struggling to pay them all every month, or we run into an obstacle that throws everything into chaos, such as unexpectedly losing a job, getting a divorce, or becoming seriously ill. Fortunately, there are options for getting debt relief, depending on your particular circumstances. It’s important for you to learn about all your options, including meeting with a bankruptcy attorney, to determine whether debt consolidation is right for you. Here are some questions you’ll need to consider: How Much Do You Owe? Do you have two credit cards that have about $1,000 on them together? You likely don’t need to pursue debt consolidation. You can continue paying those off as you are. However, if you want to get your costs down as much as possible, you can apply for a balance transfer, which could have a zero percent interest rate for up to a year or more. Do you have multiple credit cards that have tens of thousands of debt on them? You likely need to look at debt consolidation. You may be able to get a personal or home equity loan, but bankruptcy may be the better option. Talking to a bankruptcy lawyer will help you know how to get the maximum debt relief. How Much Can You Pay? Maybe you have only a few thousand dollars in debt. However, maybe you also recently lost your job and aren’t able to find another. Now you’re living on unemployment compensation that doesn’t even cover your basic living expenses or you have no income at all. Debt consolidation may be necessary to keep yourself out of trouble with your creditors that will only make your situation worse. If you have a good job but you’re just struggling to pay your debts, you may be a good candidate for debt consolidation. Chapter 13 bankruptcy around Mesa can put you on a more affordable repayment plan that will end in just three to five years, and it can discharge some debt at the end of that period. What is Your Credit Score? You may not have many options for debt consolidation if your credit score has already started taking the plunge. Traditional debt consolidation options include applying for a credit card balance transfer, taking out a personal loan or home equity loan, or getting a specialty debt consolidation loan. All of these will lower the amount you pay on your debt (by lowering your interest rate and fees), but all of these require you to have a good credit score to be approved. You can file for bankruptcy no matter what your credit score is. If you qualify, you can file for Chapter 7 bankruptcy in Mesa and get a total liquidation of your unsecured debts, such as credit cards and medical bills. If you can’t qualify for Chapter 7, you can likely apply for Chapter 13 bankruptcy, which will put you on an affordable repayment plan for your debt. Do You Have Any Assets? If your credit is terrible, you may still be able to get a loan to consolidate your debt if you have some collateral, such as a home, a car (that you own, not finance), or some other valuable item. However, you put that item at risk if you end up defaulting on the loan. If you file for bankruptcy in Mesa, you can keep these assets if they do not exceed the exemption limitations. Therefore, if you don’t have much equity built up in your home, for example, you won’t need to worry about the house being sold to satisfy your creditors. You can get debt relief while also keeping those assets. You have options to help you get your debt under control, but you really need to understand the pros and cons as they apply to your situation to know what options are right for you. Talk to a financial counselor and a bankruptcy attorney to get tailored advice about what solutions will work best for your circumstances and your goals. My AZ Lawyers is ready to help if you are thinking of filing for bankruptcy in Mesa, Glendale, Tucson, or Phoenix. We will carefully review your finances to help you understand how bankruptcy may be able to help you. We’ll also explain whether you would get the most benefits from filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Our goal is to get you the maximum debt relief possible while experiencing the fewest adverse effects. Call us today to learn more! My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 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 8539 The post Debt Consolidation Is It Right for You appeared first on My AZ Lawyers.

By: Andrew KeshnerFrom: Marketwatchhttps://www.marketwatch.com/story/wiping-out-the-nations-student-loan-debt-could-have-unintended-financial-consequences-for-borrowers-2020-02-12

By: Annie NovaFrom: cnbc.comhttps://www.cnbc.com/2020/02/12/student-loan-borrowers-announce-a-strike-refusing-to-pay-their-debts.htm

The Best Way to Use a Credit Card? Treat It Like Cash from New York Times February 12, 2020Fewer people than ever carry cash these days, it seems. Life can seem ultraconvenient when you don’t have to worry about a wad of bills in your pocket (or even a wallet in your pocket, for that matter).But it can hurt people with low incomes when businesses go cashless, it can hurt workers who rely on cash tips and — even if you’re not in either of these groups — it can hurt you because it’s easy to get into financial trouble with credit cards.Studies prove that people spend more when using credit vs. cash, and late payments are on the rise.“You have an out-of-sight, out-of-mind phenomenon with credit cards,” said Amy Bucher, the director of behavior change design at Mad*Pow, a design consultancy group. “Unless they’re checking their credit card balance on a daily basis, most people don’t have an awareness of how much debt they’re in.”But if used responsibly, credit cards are a fast way to build credit without paying a dime of interest. Good credit scores can save you money down the road, typically qualifying you for lower mortgage or auto loan interest rates. Credit card rewards can make things you buy a little cheaper.The good news: Mental tricks, apps and tools can make spending with credit cards similar to cash, giving you the best of both worlds.Editorial note: The assessments of financial products in this article are independently determined by Wirecutter, a New York Times company that reviews and recommends products, and have not been reviewed, approved or otherwise endorsed by any third party.Make credit card purchases feel tactileCash requires you to shop at a physical store, grab your physical wallet and hand over physical money. Giving a cashier a $20 bill in exchange for an $18 item is a tangible transaction. In exchange for a $20, you now have $2 left and a physical bauble.But a credit card looks the same before and after the transaction, obfuscating what was actually given up for that bauble. Add online shopping to the mix, and you might not even think about your credit card or where the money is coming from.Grab a receipt. Beverly Harzog, a credit card expert and consumer finance analyst for U.S. News & World Report, always takes a receipt. “It’s just one more thing to help you keep a grip on reality,” she said. “When they ask if you want a receipt, just say yes so you have that feeling of payment in your hand.”Editors’ PicksWho Needs a Caribbean Yacht When You Can Take the Ferry?52 Places to Go in 2020The Scenic Isle Where the World’s Chaos Comes Home to RoostRemove payment information from your computer. Consumer psychologists refer to creating friction — meaning barriers to doing something — as an effective way to stop an impulse buy. “If you’re sitting on your couch, you’ve had two glasses of wine, you see rain boots on sale, and your credit card information auto-populates, you’re probably going to buy it, because you really only needed to hit two buttons to make that purchase,” Ms. Bucher said. “If you had to get off your couch, pull out your credit card and type in the numbers, that’s friction. You have to commit a little more to make the purchase.” In contrast, digital payments like Apple Pay offer convenience when you’re at the cash register, but they take cash and physical cards out of the equation. If you’re nervous that holding your phone next to the scanner to complete a transaction could turn you into a spendthrift, don’t partake.[Like what you’re reading? Sign up here for the Smarter Living newsletter to get stories like this (and much more!) delivered straight to your inbox every Monday morning.]Set spending limitsYou can’t buy $300 headphones if your wallet contains only $100. But you can if you’ve got a card with a credit limit over $300 (even if $300 exceeds your budget).Let robots count your money. Budgeting apps like You Need a Budget ($84 a year) or Mint (no fee) track balances across all your accounts, giving you a clearer picture of your actual balance even if you have multiple cards and accounts from different banks. Some banks, such as Bank of America, also let you sync other accounts, even if those accounts are with competing banks. Check your balance in the app to ensure your next purchase fits your budget.Try “action planning.” Determine your budget, then implement measures that prevent you from exceeding it. The Uber Credit Card has a feature that lets you create a self-imposed spending limit for certain categories or merchants, which could remove the temptation to stop at Starbucks on the way to work. Other companies, like Discover, allow you to set up alerts if your credit card balance exceeds a certain amount or you near your credit limit.

Section 108 of the Internal Revenue Code Relief of Indebtedness Income and WorkoutsOne of the most overlooked areas of the law when doing a workout is Section 108 of the Internal Revenue Code (“IRC”). Section 108 is a trap for the unwary and unless the attorney or lawyer is aware of this tax code section, it can upend a workout or result in a taxpayer having to recognize, report, or pickup unknowingly a significant amount of taxable income. This could ruin the attorney-client relationship or worse yet a malpractice lawsuit by the client against the attorney.Let's begin this post with an explanation of Section 108 of the IRC.IRC § 108 provides that if an individual or an entity that owes money (the “Debtor”) is relieved of indebtedness, then that indebtedness is deemed to be ordinary income to the Debtor. The Debtor  must report that income on their tax return and the Creditor is required to file a 1099 with the IRS. There are two exceptions to this rule: first, if the Debtor files for bankruptcy protection, then the relief of indebtedness income is not picked up; and second, on a balance sheet basis, if the individual’s liabilities exceed their assets and they are insolvent, then they do not have to pick up the income.The goal of a workout from the perspective of the Debtor (the person who owes money) is to pay less than the balance due to the Creditor (person or company owed money).An example of the application of IRC § 108 will help to explain the above. Let’s assume that an individual owes a financial institution $1,000,000.  The individual is unable to pay the $1,000,000, so the parties enter into a workout (an out of court settlement) in which the individual repays the financial institution $600,000. According to IRC § 108, the taxpayer must pick up the $400,000 differential between what he or she owed and paid as ordinary income.Unless the client is made aware of this fact in advance of or during a workout, the client may walk away from the workout. If not told at all, when the client receives the 1099 from the Creditor or worse gets audited by the IRS, they will point a finger at the attorney or sue the attorney for malpractice.Many clients and some lawyers assume that the $400,000 of income is capital gains, but it is ordinary income.Another question raised by clients is how does the IRS find out about this relief of indebtedness income? The answer is that the Creditor  is required to file a Form 1099-C with the IRS reporting the relief of indebtedness income for more than $600 of forgiven debt.Yet another question asked by clients is whether the Creditor will file the 1099 with the IRS? The answer is that the Creditor is legally required to do so and most institutional investors will do the 1099 filing.Section 108 of the IRC comes up in almost every workout, but is currently most prevalent in taxi medallion and restaurant workouts. Both of these industries are struggling and are areas we are doing a lot of workouts.Clients should review all workouts with their CPA’s or accountants.At Shenwick & Associates, we are not tax lawyers, but we are familiar with the IRC and James Shenwick has an LLM in Taxation from the NYU School of Law.Clients who are doing or contemplate doing a workout, are encouraged to consult with James Shenwick to discuss their strategy. Jim Shenwick 212 541 6224  [email protected]

Can I Keep My House if I File for Bankruptcy? One of the biggest things that holds people back from filing bankruptcy and getting the debt relief they need is the fear that they will lose their house. They want to get rid of their debt, but they don’t want to lose the things they have built so far. Plus, no one wants to lose their family home, whether they’ve only been in it a few years or they’ve lived there for decades. Fortunately, filing for bankruptcy in Mesa doesn’t have to mean losing your house and ending up on the streets. However, there are more things to consider, so the answer to whether you will be able to keep your house or not if you file for bankruptcy is not a simple “yes” or “no.” You’ll need to talk to an experienced bankruptcy lawyer to review your finances and to know exactly how bankruptcy will impact you. But here are some general guidelines to give you a basic understanding of how bankruptcy works: Chapter 7 Bankruptcy Chapter 7 bankruptcy is known as a “liquidation.” It is designed to discharge your unsecured debts, such as credit cards, personal loans, and medical bills. It offers maximum debt relief. However, in order to qualify to file for Chapter 7 bankruptcy in Mesa, you have to meet the “means test,” which looks at your income compared to the average in your area, as well as your other sources of financial support and your assets. Your home is a huge asset, and as such, it can be subject to liquidation (or sale) to pay off your creditors. That might make you think that you would definitely lose your home under Chapter 7 bankruptcy. However, you are allowed to exempt your home from such liquidation if the equity does not surpass a certain threshold. The amount varies depending on your marital status and other factors, but it is a generous limit. Most people will not exceed the limit unless they have been paying on their house for a very long time. Therefore, you will likely be able to keep your home if you file for Chapter 7 bankruptcy. Chapter 13 Bankruptcy Chapter 13 bankruptcy around Mesa is what is known as a debt repayment plan, which is similar to a debt consolidation. The bankruptcy trustee looks at your finances and your debts and determines what you can pay over a three- to five-year repayment period. At the end of that time, you may be able to discharge some debt. If your house is in foreclosure, or if you have become very late on your payments, filing for Chapter 7 bankruptcy won’t help you, but filing for Chapter 13 might. Those late payments and fees can be included in your repayment plan, helping you to get current on your home. You may be able to put a stop to current foreclosure proceedings, or you may be able to avoid the risk of foreclosure. The solution will depend on what you owe, your income, and other circumstances. It’s important that you go through your finances with an experienced bankruptcy attorney to fully understand the impact that bankruptcy can have. Your bankruptcy lawyer will explain not only how each chapter of bankruptcy can give you debt relief, but also how it would impact each of your asses, including your home. Your bankruptcy attorney can work with you to devise the best plan to get maximum debt relief while also saving your home and other important assets. If you are thinking of filing Chapter 7 bankruptcy or Chapter 13 bankruptcy, My AZ Lawyers can help. We’ll start by helping you understand the ins and outs of bankruptcy and how it can help your situation. Then we’ll analyze your financial circumstances to help you understand what you qualify for and how bankruptcy might impact your assets or other things. We’ll make recommendations that will maximize the debt relief you can receive with the least negative impact. Our attorneys are committed to helping you get your finances back under control. Call us today to schedule a consultation with an experienced bankruptcy attorney. We represent clients in the Mesa, Glendale, Tucson, and Phoenix areas, and we have a bankruptcy law office near you. My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 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 8539 The post Can I Keep My House if I File for Bankruptcy? appeared first on My AZ Lawyers.

Your house is usually one of the most important places for you. You may have fought long and hard to get it, and you may not want to give up the everlasting memories you forged there. However, all of these great things may be in jeopardy when your creditors try to take it away from […] The post Can I Keep My House if I File for Bankruptcy in Pennsylvania? appeared first on .

By: Christy BieberFrom: The Motley Foolhttps://www.fool.com/student-loans/paid-off-student-loans-early/

Two weeks after filing bankruptcy, Rod got his security clearance. Rod contacted me from a military base in the Midwest. The military wanted to give him a new assignment, in the DC area, with more responsibility. His wife and children had already rented a place and moved, while he was awaiting orders. At the last […] The post Bankruptcy Solves Rod’s Security Clearance Problem by Robert Weed appeared first on Robert Weed - AE.