This Man Got $221,000 Of Student Loans Discharged In BankruptcyZack FriedmanSenior Contributor Personal FinanceAuthor, The Lemonade Life. I write about leadership and greatness.GettyGETTY Can you now discharge your student loans in bankruptcy?Here’s what you need to know.Student Loans: BankruptcyA Navy veteran will have $220,000 of his student loans discharged, even though he is not unemployable, not disabled or wasn’t defrauded. A U.S. bankruptcy judge in New York, Cecilia G. Morris, ruled that Kevin J. Rosenberg will not have to repay his student loan debt because it will impose an undue financial hardship.According the Wall Street Journal, Rosenberg borrowed $116,500 of student loans between 1993 and 2004 to earn a bachelor’s degree from the University of Arizona and a law degree from Cardozo Law School at Yeshiva University. He filed for Chapter 7 bankruptcy in 2018 and asked the court last June to discharge his student loan debt, which had grown to $221,400, including interest. At the time of filing, Rosenberg’s annual salary was $37,600, and after living and debt expenses, his monthly net loss was $1,500.Traditionally, unlike mortgages or credit card debt, student loans cannot be discharged in bankruptcy. There are exceptions, however, namely if certain conditions regarding financial hardship are met.Today In: MoneyThe Brunner Test: Financial HardshipThose conditions are reflected in the Brunner test, which is the legal test in all circuit courts, except the 8th circuit and 1st circuit. The 8th circuit uses a totality of circumstances, which is similar to Brunner, while the 1st circuit has yet to declare a standard.PROMOTED In plain English, the Brunner standard says:the borrower has extenuating circumstances creating a hardship;those circumstances are likely to continue for a term of the loan; andthe borrower has made good faith attempts to repay the loan. (The borrower does not actually have to make payments, but merely attempt to make payments - such as try to find a workable payment plan.)There are variances across federal districts, but that’s the basic framework. To discharge student loans through bankruptcy, an Adversary Proceeding (a lawsuit within bankruptcy court) must be filed, where a debtor claims that paying the student loan would create an undue hardship for the debtor.So, Can You Now Discharge Student Loans In Bankruptcy?This is only one legal ruling. That said, federal judges and Democrat and Republican members of Congress are open to changing the law to make it easier for borrowers to discharge their student loans in bankruptcy. While these tactics may be welcomed by some student loan borrowers, critics may question whether judges should actively try to circumvent the existing law (suggesting that Congress, and not judges, should make the law).

How Often is Too Often to File for Bankruptcy in Arizona? Life happens. And when it does, it can get expensive. You can lose your job and drain your savings or start living on your credit cards. You can get sick and suddenly have tens of thousands of dollars in medical debt to deal with. Or you can get divorced and struggle to learn how to live on one income – or to actually get an income after being the stay-at-home partner for so long. Bankruptcy can give you the debt relief you need when life happens. A bankruptcy attorney in Mesa can help you review your finances to determine if bankruptcy might be right for you and how it would best help you. But what if you’ve already filed for bankruptcy in the past? Can you do it again? The short answer is “yes.” However, there are a few caveats, depending on where you live. Here’s what the rules are in Arizona: Chapter 7 Bankruptcy Chapter 7 bankruptcy in Mesa gives many people the maximum debt relief possible by discharging all of their unsecured debts, such as credit card balances, medical bills, and personal loans. Chapter 7 bankruptcy cannot discharge student loans, back child support, criminal arrears, or more. However, it can clear up so much of your other debt that you will have likely have the means to pay off those other debts and still have a little left over. Just because you righted your finances once by filing for Chapter 7 bankruptcy doesn’t mean you won’t have the need to file for it again. A job loss or illness can strike at any time – and, unfortunately, they can occur multiple times in your life time. Fortunately, you can file for Chapter 7 bankruptcy more than once. In fact, you can file for it every six years from the date of your last filing. Theoretically, you could file for Chapter 7 bankruptcy 10 times or more over the course of your life. However, many judges will look unfavorably on your filing if you have filed multiple times. Judges understand that misfortunate can happen more than once, but they are also alert to the possibility of people abusing the bankruptcy system. Chapter 13 Bankruptcy Chapter 13 bankruptcy helps you to restructure your debt so that it is more affordable. Under this bankruptcy filing, you work out a repayment plan over the next three to five years to pay back what you can to your creditors. You will make one payment, which will almost certainly be on a lower interest rate. You may end up paying less than what you owe when the repayment plan is finished. There are no limits to how frequently you can file for Chapter 13 bankruptcy in Mesa since this type of filing primarily restructures your debt. Some debts can be discharged at the end of your repayment plan, but the focus on this type of filing is repaying what you can. However, you may find that continuing to file Chapter 13 bankruptcy can also become expensive once you factor in attorney fees, credit counseling fees, and the hit that your credit continues to take, resulting in higher interest rates and fees. Choosing to File for Bankruptcy Bankruptcy in Mesa is an important debt relief tool, but it must be used wisely. You should consult with an experienced bankruptcy lawyer to determine when filing for bankruptcy will give you the most benefits and when other debt relief measures may be more appropriate. Your attorney will give you tailored recommendations based on your current financial situation and your financial history, including any previous bankruptcy filings. If you are considering filing for bankruptcy, call My AZ Lawyers today. Our experienced attorneys can help you understand the benefits of Chapter 7 bankruptcy or Chapter 13 bankruptcy for your specific financial circumstances. They will help you understand all your legal rights and responsibilities under bankruptcy, and they can recommend other measures for debt relief, where appropriate. Our bankruptcy law office serves clients throughout the Phoenix area, as well as in Mesa, Glendale, and Tucson. Call our bankruptcy law office today to talk with a bankruptcy attorney about your options for debt relief and what your next steps might be. 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 How Often is Too Often to File for Bankruptcy in Arizona appeared first on My AZ Lawyers.

Filing for bankruptcy can be a stressful experience, though it is sometimes necessary to relieve or deal with certain forms of debt and move on with your life. And while filing for bankruptcy can liberate people from certain debts, it can also have some negative financial consequences, such as a lower credit score. People who […] The post Can You Buy a Home in New Jersey If You File for Bankruptcy? appeared first on .

From: cnbc.comBy: Sarah O'Brien https://www.cnbc.com/2020/01/07/bankruptcy-would-be-easier-option-for-consumers-under-warren-plan.html

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Why student loan debt is ballooning for those 50 and upFrom: USA Today.comBy: Susan Tompor  Detroit Free Presshttps://www.usatoday.com/story/money/2019/12/29/retirees-student-loans-debt/2769065001/

Seeking to resolve a 5-3 split among the Courts of Appeals, the Supreme Court will consider whether a creditor which passively retains property of the estate violates the automatic stay.  Case No. 19-357, City of Chicago v. Fulton. The Second, Seventh, Eighth, Ninth and Eleventh Circuits have ruled that retaining possession or control of property of the debtor violates the stay. The Third, Tenth and D.C. Circuits have held that passive retention of property is not an "act" to exercise control over property of the estate.  Two Code SectionsThe case turns on how to reconcile two provisions of the Bankruptcy Code. 11 U.S.C. Sec. 362(a)(3) prohibits "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate." Because the statute is written in the conjunctive, either an act to obtain possession of property of the estate or to exercise control over property of the estate will violate the statute. Because the word "act" modifies both clauses, there is a fair argument that the offended party must point to a post-petition "act" before the stay is violated.However, 11 U.S.C.Sec.542(a) says that "an entity . . . in possession, custody, or control during the case of property that the trustee may use, sell, or lease ... or that the debtor may exempt ... shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate." Thus, an entity having control over property of the estate must turn over that property to the trustee unless the property is of inconsequential value. Because a person in control of property of the estate "shall" turn such property over, there is an argument that failing to do so is an act to exercise control over property of the estate.Two ApproachesTwo cases from 2019 help to explain how the competing theories work in practice.In re Fulton, 926 F.3d 916 (7th Cir. 2019) is a case where the City of Chicago impounded cars for failure to  pay traffic fines. The City refused to return the vehicles claiming that it would lose its possessory lien if it did so. In four separate cases, bankruptcy courts found that the City had violated the automatic stay by exercising control. In two cases, the City returned the vehicles but only after it had been held in contempt and a request for stay pending appeal had been denied. In a third case, the City returned the vehicle prior to being held in contempt. In a fourth case, the debtor's bankruptcy case was dismissed and the City disposed of the vehicle. The Seventh Circuit affirmed the finding that the stay had been violated.Meanwhile, the Third Circuit found no violation of the stay under similar facts in In re Denby-Peterson, 941 F.3d 115 (3rd Cir. 2019). Joy Denby-Peterson bought a 2008 Chevrolet Corvette. She agreed to make a down payment of $3,000, a "deferred" down payment of $2,491 some three weeks later and 212 weekly payments of $200. When she did not pay the deferred down payment, the creditor repossessed the vehicle. She then filed Chapter 13 and demanded that the car be returned to her. When the creditor failed to return the car, she filed a motion for turnover and for sanctions. The Bankruptcy Court granted turnover but denied sanctions on the basis that the creditor had not committed an "act" to exercise control over the vehicle. The District Court and Third Circuit affirmed the finding that there had been no stay violation.  The Courts found that passively retaining collateral was not an "act." They also held that the turnover provision of Sec. 542(a) was not self-executing because a creditor might have a defense to turnover. Why It Matters There are legitimate reasons why a creditor would not want to return a car to a debtor. For example, if the debtor did not have insurance and liked to drive at 100 mph in the rain, a creditor might be reticent about returning the vehicle. The lender may have read on the debtor's Facebook page that he planned to permanently move to Mexico the following week. Or the debtor may be a repeat chapter 13 filer with no income and the lender may object to extending the automatic stay (assuming that the debtor timely files the motion).  The lender is not without remedies in these understandable situations. Under 11 U.S.C. Sec. 362(d), the court may terminate, annul, modify or condition the automatic stay on request from a creditor. Thus, if a creditor learns of the bankruptcy on the date of filing and files a motion to annul the stay the next day, the court could retroactively annul the stay so that the stay was deemed never to have gone into effect. The court could also condition the stay on the debtor providing proof of full coverage insurance and agreeing not to leave the country.The practical consequence of this dispute is establishing which party has the requirement to seek relief first. Under the Seventh Circuit's position, the creditor has the burden to request that the automatic stay be annulled or conditioned in order to avoid violating it. Under the Third Circuit's view, the debtor must seek turnover unless the creditor takes some affirmative action post-petition. For example, if the vehicle was parked in front of the debtor's home and the creditor used a kill switch to disable the car after learning of the bankruptcy, that would be an act to exercise control. Under the Third Circuit's view there must be some act occurring post-petition which alters the status quo ante. I prefer the majority position. The purpose of the automatic stay with respect to property is to allow the debtor to be able to use the property. Withholding a vehicle means that the debtor cannot use it to take his kids to school or drive to work. While that may not be a problem in a city with robust mass transit, such as New York or Washington, D.C., it is a major burden in a state like Texas where a working vehicle is a necessity. In my view, if the debtor requests the property back and the creditor says no (or fails to respond), that is an act which violates the stay.On a final note, the Fulton case will be well argued in the Supreme Court. Veteran Supreme Court litigator Craig Goldblatt represents the City while former Bankruptcy Judge Gene Wedoff represents the Debtors. Thanks to Brit Suttell who sent me the Denby-Peterson case.

Many clients have contacted us regarding the discharge of taxes in bankruptcy,offers in compromise and installment agreements with IRS and recently  penaltiesassessed by IRS.The IRS offers 3 types of penalty relief:1. Reasonable Cause-this appears to be our best chance  to abate penalties2. Administrative Waiver and First Time Penalty Abatement3. Statutory Exception for example a taxpayer  got bad advice from IRS Reasonable cause is relief we may grant when a taxpayer exercises ordinary business care and prudence in determiningtheir tax obligations but is unable to comply with those obligations due to circumstances beyond their control.Reasonable Cause is based on all the facts and circumstances in your situation. The IRS will consider any reason which establishes that you used all ordinary business care and prudence to meet yourFederal tax obligations but were nevertheless unable to do so.Typical fact patterns involving reasonable cause for failure to file a tax return, make a deposit, or pay tax when due include:1. Fire, casualty, natural disaster or other disturbances2. Inability to obtain records3. Death, serious illness, incapacitation or unavoidable absence of the taxpayer or a member of the taxpayer’s immediate familyJim Shenwick, Esq. has an LLM in Taxation from New York University Law School

The Last Will and Testament and other forms of the Will were covered in our most recent article. Often going alongside a Will is one or more trusts. A revocable living trust is the tool in the Estate Planning Toolbox for holding and distributing a person’s assets to avoid probate. In its simplest definition, the Trust is an entity separate from you that allows you pass assets anyone designated in the trust. First, a word about probate. Probate is a court process that oversees the administration and distribution of the assets of a deceased person. As part of the process, the court system validates a person’s Last Will and Testament, if they have one. While the probate process is not “scary,” it can eat up a lot of time and money. That is all the more reason to turn to an experienced Estate Planning attorney for help in how to avoid that unnecessary cost and delay. A Trust skips the probate process How does a Trust skip the probate process? A Trust is an entity separate from you that holds your assets while your alive and sets forth how you want your assets handled after your passing. Since a Trust is a separate entity from personally, when you pass away your Trust continues. Since a Trust cannot “pass away” anything titled in the name of the Trust would not be subject to the probate process. Properly titling assets in the name of a Trust, often referred to as “funding,” avoids probate on those assets. This is why an experienced attorney will talk you through the process of retitling assets into your Trust. Listing assets, changing titles After the Trust is set up, the Trust ‘owns’ the property. A Trust is only worth the assets that are titled into it. This is the step that trips up many who don’t use an attorney for the trust. For many things – jewelry or collections as examples – the trust simply lists the assets in detail. Real estate is a bit different in that the deed or title (see related article) has to be changed to list the trust as the actual owner of the property. This isn’t complicated. Still, when this step is overlooked, your assets could end up in probate. Avoid double counting and under counting Your retirement plans and insurance policies already have beneficiaries. This money doesn’t end up in probate, but the assets also don’t flow into a trust, unless you’ve set the trust as the beneficiary. That tactic can seem confusing, but it points out the importance of looking at beneficiaries of things like life insurance and IR As at the same time as the trust is created. You might have even forgotten who you listed as the beneficiary over the years since opening the IRA or policy. In the last article, we covered the Pourover Will. The pourover helps you take care of assets you may have overlooked by sweeping them into a trust. In our next article, we’re going to cover Powers of Attorney that will help you take care of yourself. The post Your Estate Planning Toolbox: Trusts appeared first on Wynn at Law, LLC.

After bankruptcy credit card offers come faster than you think Have you heard the lie? The lie that filing filing bankruptcy means seven years with bad credit. You after bankruptcy credit will be better than most people expect.   The truth about after bankruptcy credit.  The truth is the opposite of that bad credit lie.  […] The post Credit Card Offers Come Faster Than You Expect by Robert Weed appeared first on Robert Weed - AE.