The bankruptcy court in In re Muhammad, No. 17-11935-7, 2018 WL 2473826 (Bankr. W.D. Wis. June 1, 2018) was faced with an assertion of discharge violation when the state department of children and families intercepted a $3,400 tax refund toward an overpayment of $5,520 in a foodshare program.  The state asserted that the overpayment constituted a nondischargeable domestic support obligation.   Under section 523(a)(5), a debt “for a domestic support obligation” is nondischargeable. The Code defines “domestic support obligation” as a debt that is: (A) owed to or recoverable by—...    (ii) a governmental unit;(B) in the nature of ... support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child’s parent, without regard to whether such debt is expressly so designated;(C) established ... before, on, or after the date of the order for relief in a case under this title, by reason of applicable provisions of—... (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit, andD) not assigned to a nongovernmental entity.  The disputed issue is whether the obligation was in the nature of support.  One line of cases holds that such overpayments are in the nature of support if they the debt provided support for the debtor’s spouse and children, was owed to a governmental unit, and had been determined owing by a governmental unit.1   A Second line of cases reached took a contrary position, finding that since the debt was owed to the government, it did not benefit herself or her children; therefore could not have been 'support' as contemplated by the statute.2    The court took a middle approach, agreeing with Rivera v. Orange Cnty. Prob. Dep’t, 832 F.3d 1103 (9th Cir. 2016).  Here, the 9th Circuit finding that a claim by the probation department for the costs of supporting a minor was not a domestic support obligation since the probation department was not part of the family support infrastructure.  Collier supports this interpretation An interpretation more faithful to the purpose of the domestic support obligation definition would require (1) that the debt have a nexus to failure to meet the debtor’s familial support obligations and (2) that the determination by a governmental unit be one made by a governmental unit that carries out the functions of determining family support.  3    Under the Ratliff line of cases, virtually any  overpayment could be termed a domestic support obligation, whereas the Halbert line could encourage dishonesty and mishandling government resources.  It also renders §101(14A)(A) meaningless as it relates to debts 'owed to or recoverable by government units.'   By requiring some relationship to the government support infrastructure it limits the debts covered to those related to a government agency involved in the welfare of families.     The court found a separate issue with the claim in this case.  The overpayment was based on support for the debtor and her grandchild.   §101(14A) is limited to debts owed to or recoverable by a spouse, former spouse, or child of the debtor.  Looking at the plain meaning, 'child of the debtor' does not include grandchildren.  Therefore the Court ruled that the obligation was not a domestic support obligation.  The court ordered refund of the intercepted tax refund, and held the debt dischargeable; but denied fees and costs since the debtor represented herself.1 Wis. Dep’t of Workforce Dev. v. Ratliff, . 390 B.R. 607, 616 (E.D. Wis. 2008).↩2 Halbert v. Dimas (In re Halbert), 576 B.R. 586, 598 (Bankr. N.D. Ill. 2017).↩ 3 2 Collier on Bankruptcy ¶ 101.14A.↩Michael Barnett www.tampabankruptcy.com

When debtors file Chapter 13, all disposable income is paid into the plan and used by the trustee to offset plan expenses. Only regular income, not considered disposable, is the income used to establish and make plan payments and pay reasonable expenses, such as: housing, food, and transportation. Tax refunds are considered disposable income and, typically, must be paid into the plan. The post How Does Bankruptcy Affect Your Tax Refund? appeared first on Tucson Bankruptcy Attorney.

  In Lamar, Archer & Cofrin, LLP v. Appling, No. 16-1215, 2018 WL 2465174 (U.S. June 4, 2018) a unanimous court concluded that the exclusion in §523(a)(2)(A) regarding statements regarding a debtor's financial condition from the fraud non-dischargeability ground applied to an oral statement regarding a single asset of the debtor.  Thus, in order for a statement regarding a single asset to support a nondischargeability count under §523(a)(2), it must be in writing thereby meeting the standard of §523(a)(2)(B).  The case involved a  dispute between a client (Appling) and his law firm (Lamar).  When Appling got behind on his bills to the firm on a business litigation matter, he asserted that he would pay them a $100,000 tax refund which he indicated was sufficient to pay current and future bills.  In exchange for this promise the firm continued to represent Appling.  Instead Appling paid the refund, which was about $60,000, for other bills.  Then Appling again told Lamar that he was still waiting for the refund in order to induce Lamar to complete the representation.   When the bill was never paid, Lamar obtained a judgment against Appling, and Appling filed a chapter 7 bankruptcy.  Lamar filed an adversary proceeding asserting a violation of 11 U.S.C. 523(a)(2)(A) which bars discharge of specified debts arising from “false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's ... financial condition.  Appling sought dismissal as the statement was not in writing.  The bankruptcy court denied the motion to dismiss finding that a statement regarding a single asset is not a statement concerning a debtor's financial condition, and found in favor of Lamar.  The decision was affirmed by the bankruptcy court but reversed by the 11th Circuit finding that a statement about a single asset was a statement regarding a debtor's financial condition.  Finding a split in the circuits, the Supreme Court accepted cert.  The Supreme court first parsed the language of the statute, finding three elements.   A “statement” is “the act or process of stating, reciting, or presenting orally or on paper; something stated as a report or narrative; a single declaration or remark.” Webster's Third New International Dictionary 2229 (1976) (Webster's). As to “financial condition,” the parties agree, as does the United States, that the term means one's overall financial status.   The issue the court focused on was the term 'respecting.'  Lamar asserted that the term is narrowly focused on a debtor's overall financial condition rather than a statement as to a single asset.  The court found, at least in this context, that respecting has the same meaning as 'about', 'concerning', 'with reference to,' and 'as regards.'  The Court found that it has interpreted these terms broadly in it's decisions. Thus, it rejected Lamar's narrow definition, as it would read the term 'respecting' out of the statute.    The Court found that the term 'respecting a debtor's financial condition' requires that a statement have a direct relation to or impact on the debtor's overall financial status.  Since a single asset has an impact on a debtor's financial status, a statement regarding a single asset bears on a debtor's financial status and can affect whether a debtor is solvent or able to pay a debt.  To eliminate the requirement that such statements be in writing would lead to incoherent results, such as conflicting requirements for statements on balance sheets versus a same or more specific oral statement would not.  Historical analysis also supports the conclusion, as the provision traces back to a 1926 amendment requiring publishing a false statement in writing regarding the debtor's financial condition.   The court went on to reject Lamar's further arguments that requiring such statements to be in writing would gut the application of §523(a)(2)(A).  However, the number of decisions finding debts nondischargeable under this subsection show the section is still widely utilized such as in cases involving fraudulent conveyance schemes or misrepresentation of the value of goods, services, or property.  Lamar also argues the ruling ignores the principal of limiting relief to the honest but unfortunate debtor, leaving debtor's free to orally swindle their creditors.  The majority of the court rejected this argument, finding that the requirement is not enacted to protect dishonest debtors, but in reflecting Congressional intent to balance the potential misuse of such statements by debtors and creditors.  Congress had noted consumer finance companies often collected information from loan applications in ways designed to permit the companies to use them to support nondischargeability complaints, such as telling borrowers not to list all assets, or leaving insufficient room to list debts.  To allow creditors to base such actions on purported oral statements would lead to manipulation by creditors frustrating the result sought by Congress.  Creditors can protect themselves by insisting that statements regarding single assets be in writing.Michael Barnett www.hillsboroughbankruptcy.com

Forbes recently came out with an article on retail bankruptcy in January; when holiday sales have failed to boost a store’s sagging profits and ease its debts, the company might file for bankruptcy. It’s also important to note that, in addition to seeing a possible spate of business bankruptcies, January might also be a time when individuals consider bankruptcy because of debts that exploded over the holidays. Now that a few weeks have passed since the holiday season, what’s the state of your finances? Look into the amount of credit card debt you owe. Gift purchases and money spent on vacations can add up quickly. Consider the likelihood that you can repay the debt anytime soon. For example, are you out of a job? Are you not getting paid enough at your job? Have you been you blindsided by any steep expenses, such as an unexpected medical bill? Yahoo! Finances posted an article recently called “5 ways to cure a holiday debt hangover.” The article refers to a few websites where you can keep track of the money you owe, how much you’re paying back, and at what time. The article also offers suggestions for expenses you can cut, at least for a short time, along with short-term ways of boosting your income, such as getting a temporary side job. But what if these measures prove ineffective? You might have resolved to handle your finances and spend money more carefully, but maybe that will do little for your existing debt. Also, you might experience an unexpected disaster, such as a serious medical event or a situation where both you and your spouse become unemployed. Even with money saved up, you might struggle with debt. Don’t hesitate to contact a Miami County, Ohio bankruptcy attorney if you’re mired in debt difficulties. Bankruptcy is a viable option for many people, and with careful management and legal advice, you can get through the process successfully and begin to rebuild your finances and credit score. The post Are You Still Struggling with Holiday Debt? Contact a Miami County, Ohio Bankruptcy Attorney appeared first on Chris Wesner Law Office.

As discussed in a recent article from Cleveland.com, the Consumer Financial Protection Bureau released a report analyzing various kinds of debt. What types of debt show up most frequently on people’s credit reports? As it turns out, unpaid medical bills top the list, accounting for roughly 52% of the debts reported to credit bureaus. What does this mean? Medical Debt and Bankruptcy First off, it’s important to understand that just because medical bills are the most frequent kind of debt showing up on credit reports, it doesn’t mean that they’re always the largest debt in any given individual’s financial life. You could have an unpaid medical bill of several hundred dollars, while at the same time holding a general credit card debt of several thousand dollars encompassing many other bills. That said, healthcare and medical services are generally expensive and often do put a drain on people’s finances, especially in the worst situations involving hospital stays and major surgeries. When dealing with the healthcare industry, you need to push as much as possible for transparency to understand why you’re getting billed a certain amount. The Cleveland.com article offers additional advice, including not paying your medical bills with a credit card if possible; the reasoning is that if you pay the medical bill with your credit card, it might get classified on your credit report as part of your general credit card debt, which could impact your credit score more strongly. If you live in Ohio and are struggling to manage medical debt or any other unpaid bills, be sure to contact an experienced Shelby County, Ohio bankruptcy attorney. Your attorney will help you figure out strategies for coping with mounting debt and possible pressure from creditors and collection agencies. The post Shelby County, Ohio Bankruptcy Attorney Looks At Consumer Financial Protection Bureau Findings on Medical Debt appeared first on Chris Wesner Law Office.

The IRS has a reputation as a strong-armed bully that won’t release people from tax debts no matter what the circumstances. However, the truth is that some tax debts are dischargeable in bankruptcy if they meet specific conditions outlined by the IRS. If you are considering bankruptcy, it is important to consult with a Sidney, Ohio bankruptcy attorney first. Exceptions are only available for tax you owe on earned income. You must pay all taxes due on unearned income, such as alimony or a substantial gift, when you file bankruptcy. According to the legal site Nolo.com, you also must meet the following conditions to include tax debt with your bankruptcy petition: You filed a tax return two or more years ago for taxes due three or more years ago. The IRS prohibits all taxpayers from including taxes assessed on income in the past 24 months with their bankruptcy petitions. If you include tax debt in your bankruptcy filing, be prepared to show the IRS proof that you filed electronically or mailed a paper claim two or more years ago. This timeline also includes extensions. For bankruptcy purposes, the IRS also imposes limits in relation to when the tax was assessed. You must have received a tax bill 240 days ago or longer from the date you file for bankruptcy. An exception is possible if you previously filed bankruptcy or were negotiating an Offer in Compromise with the IRS prior to your current bankruptcy filing. No Dismissal of Tax Debts if You File a Fraudulent Return If you knowingly file a false tax return with the IRS, you can expect it to deny your request to dismiss past due taxes with your bankruptcy. The IRS must prove that both spouses knew about the fraud in cases involving married couples who file for bankruptcy. For additional questions about tax debt or how to file for bankruptcy, please contact us at Chris Wesner Law Office, LLC. The post Sidney, Ohio Bankruptcy Attorney Sets the Record Straight About Tax Debt appeared first on Chris Wesner Law Office.

Going through bankruptcy is not something that people look forward to doing, but it is the correct decision for many individuals as it allows them to start fresh with their financial situation. Using a Dayton, Ohio bankruptcy attorney is ideal because an experienced professional can provide their knowledge and expertise to assist with the entire bankruptcy process Receiving this kind of assistance will improve your experience from beginning to finish, and it will help you focus on the most important part, which is making every right decision with your financial future. Pay for a Secured Credit Card While the thought of getting a credit card after bankruptcy may be intimidating, you can use a secured credit card to your advantage for improving your financial after bankruptcy. It is different from a standard credit card that provides you with immediate funds to use in that you actually need to invest money initially to get a secured credit card. Maintain a Zero Balance Although you may be tempted to keep a balance on your credit card because you think it will have a greater impact on your credit score, you should focus on maintaining a zero balance. It is vital to avoid paying any interest and getting into the bad habit of not paying off your entire balance on time,  which can then lead to procrastinating on your payments and building a higher balance than intended. Calculate Your Necessary Monthly Expenses It is best to make sacrifices by reducing your monthly expenses, which can be done by calculating what you really need and how much money it costs, and then getting rid of the unnecessary costs. Doing this will reduce your monthly expenses, which in turn increases your potential for savings. If you are unsure of what type of bankruptcy your financial situation calls for, or want some reliable information on bankruptcy in general, do not hesitate to contact us as we would love to help. The post Effective Ways to Fix Your Finances after Using a Dayton, Ohio Bankruptcy Attorney appeared first on Chris Wesner Law Office.

Is your desk covered with a stack of unopened bills? Have you been struggling to make your mortgage but instead keep falling further behind? Do you wake up every day and immediately start worrying that you will never be able to pay off a mountain of accumulated debt? If any of these sounds like you, it may be time to consider bankruptcy. We know you’re proud. We know that in a perfect world, you’d prefer to pay your bills. Most people who eventually file for Chapter 7 or Chapter 13 bankruptcy in Troy were reluctant to go that route. Most of our bankruptcy clients tried everything else they could think of before they realized that bankruptcy was their best option. Declaring bankruptcy may be your best option, too. Chapter 7 Alternately called a “liquidation” or “straight” bankruptcy, Chapter 7 allows for the discharge of most debts but the debtor must relinquish most of their valuable assets in the process. If you are behind on mortgage payments and want to keep your house, Chapter 7 may not be the right way to go. The same is true if you are making payments on a motor vehicle. Chapter 7 wipes out most debts, but not those owed on a mortgage or car loan. Chapter 13 If you are late on house payments and want to keep your house, Chapter 13 bankruptcy is probably your best bet. A bankruptcy lawyer can help you work with your creditors to devise a payment plan you can live with. If your loans were co-signed, Chapter 13 bankruptcy may protect your co-signers from collection efforts by your creditors. These are hard financial times for a lot of people. Many good Ohioans find themselves facing foreclosure and seizure of their assets, despite trying their level best to stay above water. If you’re struggling every day and worried for your financial future, take a deep breath and call an experienced Dayton, Ohio bankruptcy attorney. A qualified lawyer can explain the differences between Chapter 7 and Chapter 13 bankruptcy and help you choose the option that’s right for you. When you are ready to sleep better at night, contact us. The post When to Call a Dayton, Ohio Bankruptcy Attorney appeared first on Chris Wesner Law Office.

From time to time, it’s worthwhile to look at high-profile bankruptcy cases in the news in order to learn from them. Maybe there are lessons for what to avoid when it comes to our own financial decisions or for what to do when you experience money troubles. Recently, a star player for the Columbus Blue Jackets filed for bankruptcy. Over the course of his career so far, he’s earned millions of dollars (more than 18 million, according to a news report) – so the obvious question is: Why does he need to file for bankruptcy? As it turns out, he’s been struggling with a few financial problems, including the following: He had needed to default on a number of loans that had unfavorable terms (including high interest rates); creditors filed lawsuits against him, and he was hit with major fees and garnished wages. Why did he take out so many bad loans? He entrusted his finances to people who mismanaged it – in this case, his parents. As claimed in the news report, his mother took out millions of dollars of loans in his name from “nonconventional lenders.” What steps is he taking now to address his financial problems? For one thing, he has reportedly shifted the financial management away from his parents and to people he can better trust. He has also filed for bankruptcy. While we won’t go into the details of his case here, it’s worth noting that bankruptcy can give you breathing room from creditors and a chance to reorganize your finances and start over. If you’re in financial straits from bad loans and other financial mismanagement, don’t hesitate to contact a Beavercreek, Ohio bankruptcy attorney. People from all walks of life and income levels file for bankruptcy, for a variety of reasons. There shouldn’t be a stigma – only a chance to start fresh and get the financial assistance you need. The post Beavercreek, Ohio Bankruptcy Attorney Looks at Columbus Blue Jackets Star’s Bankruptcy Filing appeared first on Chris Wesner Law Office.

Life is unpredictable and sometimes married couples find themselves facing vastly different credit situations. It could be one spouse came into the marriage with a large amount of debt or it could be that an impending separation has caused one partner to make unwise financial choices. Whatever the reason, sometimes one spouse considers filing for bankruptcy alone. A Xenia, Ohio bankruptcy attorney offers advice on things to consider when choosing to file for bankruptcy solely or jointly. In general, it is more advisable to file bankruptcy jointly. However, in special circumstances it may be a good idea to file alone. If you believe your spouse will not be truthful in a joint petition, refusing to be on the same bankruptcy petition is a matter of self-preservation. The penalties for perjury are severe. Lying on a bankruptcy petition can lead to five years in federal prison. You may also choose to file separately if your spouse owes no debt, including joint debts, and has no liability.  On the other hand, there are several disadvantages to filing separately. First, even if you choose to file alone, your spouse’s income is still attributed to you. This fact may cause those wishing to file alone to be above the income thresh hold for Chapter 7 or may increase the minimum payment needed to fund a Chapter 13 Wage Earner Plan. Filing bankruptcy alone may also prove to be more expensive for the family in the long run. Generally, the cost of adding the spouse to a bankruptcy petition is around $100. However, once one spouse has filed, if the other spouse is forced into bankruptcy later they will be responsible for paying for their own petition. This means one family may end up paying bankruptcy fees, which are close to $1,300 twice, one time for each spouse versus paying around $1,500 total for a joint filing. Your exemptions are also considerably less when you file alone. Filing jointly automatically doubles your allowed exemptions. Furthermore, under Chapter 7 bankruptcy, if only one spouse files for bankruptcy, creditors can still seek payment from the other spouse on all jointly held debts. Filing for bankruptcy can be a lifesaving option for many people. It is highly advisable to seek assistance from an experienced attorney to determine your best option. For more information on determining when it is advisable for only one spouse to file for bankruptcy, contact us. Our friendly and experienced attorneys will work with you to plan your best course of action. The post Ask a Xenia, Ohio Bankruptcy Attorney, Does My Spouse Have to File Bankruptcy With Me? appeared first on Chris Wesner Law Office.