By Damon TrentWhether you’re drowning in debt because of unemployment, medical bills, or just good old-fashioned spending—in 2016, almost 772,000 Americans found themselves in one of those situations—you’ve probably considered declaring personal bankruptcy, an option designed to allow people in financial distress to hit the reset button. But does it work? And should you consider it? Here’s what you need to know. When should I consider bankruptcy?Anytime you find yourself with more debt than you can handle, bankruptcy is an option worth exploring. Bruce Weiner, a New York bankruptcy attorney, says that in nearly 40 years of practice he’s found “a good thumbnail is when the amount you owe starts to approach what you make in a year.” (Note: Some debts—like taxes, child support, and mortgages—aren’t usually eligible for bankruptcy relief, so if you owe those, you’ll have to pay them even if you file for bankruptcy.) The U.S. offers a half-dozen forms of bankruptcy to choose from, each named for the chapter of the law that established it. The most popular for individuals are Chapters 7 and 13. Chapter 7Also known as “liquidation” bankruptcy, Chapter 7 is by far the most common form of personal bankruptcy in the United States (versus Chapter 11 for businesses). After you file your paperwork, the judge appoints a “trustee,” whose job it is to sell (“liquidate”) any assets you have and distribute the proceeds among the people to whom you owe money. Luckily, this won’t leave you naked and homeless. Part of the trustee’s job is to ensure that you’re left with the resources you need to live and work. Plus, any money you earn from that day forward is yours to keep. Chapter 13If you have a steady income, Chapter 13 offers a somewhat gentler solution. Instead of selling your assets, a Chapter 13 trustee works out a legally binding plan for paying back your debts, or a percentage of them, over a fixed time period, usually three to five years. Along with letting you keep your stuff, in some cases Chapter 13 can apply to common types of debt that Chapter 7 doesn’t cover. What happens when I file?Different kinds of personal bankruptcy all share one glorious feature: the “automatic stay.” The day you file your paperwork, your creditors are legally barred from trying to collect their debts. That means no more lawsuits. No more “Final Demand” on red-trimmed envelopes. No more voicemails demanding you call the sinister “Mr. Peterson” back “immediately.” Instantly, those headaches are gone for good. And soon your debts are also gone—or “discharged,” in legal terms. What’s the catch?There’s one great reason not to file for bankruptcy: Your credit score takes a hit. Of course, if you haven’t paid a bill for a year or two, your score may already be in the basement. If not, you can expect a drop of several hundred points. And that black mark stays on your record for eons—a decade for Chapter 7, eight years for Chapter 13. In many cases, though, declaring bankruptcy will actually leave you with a higher credit score than if you simply allowed your debts to fester. Weiner says that many of his clients are shocked to start receiving offers for credit cards and mortgages only months after filing for bankruptcy. So, going bankrupt is good?No. Bankruptcy is unpleasant, and intrusive, and creates an indelible record of a low point in your life. “Nobody wants to end up here,” says Weiner. But it beats the constant, crushing stress of unpayable debt. Not only that, but, well, bankruptcy is also fundamentally American. That’s why it’s in the Constitution. The Founding Fathers knew that if this land was going to be a place where citizens could dream big and take risks, they also had to have what Weiner calls “the freedom to fail.” That freedom is yours to enjoy— if you’re ever unlucky enough to need it. Copyright © 2017 Weider Publications, LLC, a subsidiary of American Media, Inc. All rights reserved.

Our February post on taxi medallions and their significant loss in value generated much reader interest. In this month’s email, we’ll update readers on taxi medallions and related issues. The New York Post reported earlier this month that a taxi medallion recently sold for $241,000-a new low. As recently as three years ago, taxi medallions were selling for $1,300,000-a drop in value of over 80%.  And there are approximately 50,000 Uber drivers in NYC vs. approximately 13,587 yellow cab drivers. With just 13,587 yellow cabs on New York City’s streets compared to about 50,000 cars from black cab and app services, New Yorkers now have more transportation options than ever before. In New York City, people took fewer trips and spent less on taxis during the first half of last year compared with 2015, according to a November securities filing from lender Medallion Financial Corp. According to an article in Skift, 81 percent of Capital One's $690 million in loans for taxi medallions are at risk of default. The share of taxi medallion loans Capital One thinks its borrowers won’t be able to repay in full has nearly tripled over the past year, to 51.5 percent. Another 29 percent of Capital One’s loans are to stressed borrowers who could be at risk of default. And  BankUnited told its investors in November that nearly 59 percent of its loans secured by taxi medallions were under water. Close to 95 percent of BankUnited’s loans were to New York City borrowers. Many readers have asked us what the banks that loaned money to medallion owners can or are doing. Their options are as follows: 1. Close and go out of business; 2. File for chapter 7 or 11 bankruptcy and liquidate or attempt to reorganize; 3. Sell their non–performing loans to third parties such as hedge funds; 4. Restructure their loans from third parties; 5. Seek capital from third parties; or 6. Work to restructure their loans to medallion owners. Which strategy is optimal? The optimal strategy depends on the facts of each case. For medallion owners whose loans exceed the value of the medallions, the question remains as to what their strategy should be. The key issue for a medallion owner is whether to continue to own and make payments on a medallion loan, where the value of the medallion is far below the loan balance. For those medallion owners seeking specific advice, please see our post here. Any course of action chosen by a medallion owner involves NYS debtor/creditor law, bankruptcy law and tax law. Medallion owners are advised to seek legal counsel and to proceed with caution. Many readers have also asked about timing. Assuming the bank or fund that made them the loan is in financial trouble, are they better off negotiating a settlement now or waiting to see what the future holds? This author has negotiated with buyers of distressed debt (defaulted or written off credit card debt) and often those creditors can be more difficult to deal with than banks. However, in this author’s opinion, taxi medallion prices will continue to decrease in value or remain at these low levels, and taxi medallion owners need to develop a strategy to address these issues based on their own facts and circumstances. To discuss your situation regarding tax medallion ownership, please contact Jim Shenwick.

You should complete your Chapter 13 bankruptcy case before you apply for new credit. You should wait the 3-5 years while the case is running since you are holding off your current creditors. In some cases, a vehicle can be purchased and financed after filing, provided a proper motion is brought before the court which+ Read More The post Credit After Bankuptcy appeared first on David M. Siegel.

This is the bankruptcy case study for Mr. C., who resides in Geneva, Kane County, Illinois. He is in the office to determine whether or not chapter 7 bankruptcy will provide the relief that he is seeking. Let’s look at the facts of this particular case. He is currently the owner of a piece of+ Read More The post Bankruptcy Case Study For T.C., From Geneva, Illinois. appeared first on David M. Siegel.

By SARAH MASLIN NIR The sign above Soft Touch Car Wash on Broadway in the Inwood neighborhood of Manhattan declares, “Open 24 hours,” but last month the bustling carwash suddenly closed. It was the same at the four other carwashes owned by the same family in New York City and the surrounding area: the phone lines disconnected, the hoses and wash mops idle and dry.The operators of the small chain, José and Andrés Vázquez, agreed to pay $1.65 million to 18 employees to settle a federal lawsuit over stolen wages, a significant victory in the battles against wage theft in the city’s low-paying industries.But the suddenly shuttered carwashes illustrate a persistent problem confronting many low-wage workers not just in New York but across the country: Winning in court is no guarantee that they will ever see much, if any, compensation.The workers who toiled at the Vázquez carwashes battled for nearly six years before receiving the money they were due, their efforts hampered by the owners having filed for bankruptcy — a well-worn tactic used to avoid paying exploited workers, according to labor advocates. The owners could not be reached for comment. Now, some New York State lawmakers are renewing a push for legislation that would put in place a type of insurance against this tactic, which crops up in industries from nail salons to restaurants. The measure would essentially enable employees who accuse an employer of wage theft to have a lien placed on the employer’s assets while the outcome is being determined.“We are improving the lot of low-paid service workers; however, we haven’t attacked this fundamental problem of them giving their work, giving their time, and not getting compensated for it,” said Assemblywoman Linda B. Rosenthal, a Democrat who represents parts of Manhattan. “And it’s just not something we can tolerate anymore.”In a setback for workers and their advocates, the measure was dropped from the budget agreement that state lawmakers reached. But a bill with the same measure, introduced this year by Ms. Rosenthal, is poised for a vote this spring in the Assembly.Selling off houses and businesses — sometimes for a nominal sum, and frequently to a relative — and declaring bankruptcy is a move that experts say business owners often use to avoid paying back wages, overtime or damages, usually as a result of a court order. Under Ms. Rosenthal’s proposal, businesses would not be permitted to sell their assets while a wage dispute was underway.“We know their tricks,” she said, referring to unscrupulous business owners. “This is an attempt to jump in front of their tricks.”A 2015 report written by several worker advocacy organizations calculated that between 2003 and 2013, the New York State Department of Labor was unable to collect over $101 million that employers owed workers.“It’s not surprising that people who are willing to cheat their workers are willing to transfer their assets to prevent their workers from getting what they are rightfully owed,” said Richard Blum, a staff attorney with the Legal Aid Society who works in the employment law division.Small-business groups have opposed Ms. Rosenthal’s measure, saying it is an unnecessary and unfair burden on employers.“It’s based on an accusation, not on proof,” said Denise M. Richardson, the executive director of the General Contractors Association. “An employee who feels aggrieved should not be able to tie up a business’s finances absent any proof that in fact they have been subject to wage theft.”But workers say they need more powerful tools to battle employers who mistreat them.“Right now, it is very easy for these sweatshop bosses to steal workers’ wages,” said Jin Ming Cao, who has yet to see any of the over $100,000 a judge ordered his former employer, a restaurant in Manhattan, to pay him in 2010, part of $1.5 million settlement involving a group of workers. “Even when they’re found out by a court, they just change names, it’s so easy.”Laws allowing liens against business owners involved in wage disputes exist in half a dozen states — Alaska, Idaho, New Hampshire, Texas, Washington and Wisconsin — but only Wisconsin permits liens solely based on an allegation of wage theft, according to the National Employment Law Project. In the other states, a lien is allowed only after wage theft has been proved as a result of a lawsuit or an agency investigation, for example.In New York, rules are already in place to protect workers in a few select industries where wage theft has been a widespread problem. In 2015, Gov. Andrew M. Cuomo imposed a requirement that nail salons carry wage bonds, a type of liability insurance designed to prevent the nonpayment of workers.Nail salon owners have campaigned against the requirement, arguing that the price of carrying such insurance is too burdensome for small businesses like theirs. The cost varies depending on the coverage; carrying a $25,000 bond, for example, would cost an employer between $550 and $700 a year, according to providers.Last week, lawmakers in West Virginia voted to remove, on similar grounds, a wage bond requirement that had long been in place for construction and mining industries.On a sidewalk outside Manhattan Valley, an Indian restaurant on the Upper West Side, about 100 workers gathered recently to pass out fliers and chant that the proposed state measure, commonly known as Sweat — securing wages earned against theft — needed to become law.When the restaurant was known as Indus Valley, a group of 10 workers sued and were awarded $700,000 in back wages by a federal judge in 2014. They still have not been paid. The owners have told the court that they sold the restaurant and that Manhattan Valley is a new restaurant with different owners. Workers and advocates claim that is a ruse to avoid payment and that the same owners still run the restaurant.One of the workers is Efren Caballero De Jesus, 43. He delivered curries, bottled raita sauce and cleaned the kitchen at Indus Valley, often seven days a week, 10 or more hours a day, earning as little as $400 per week, for four years. “I felt degraded,” Mr. De Jesus said.He was elated when a judge apportioned him over $180,000 of the award in 2015, but three years later, he wonders if he will ever receive anything from the two brothers who owned the restaurant, Phuman and Lakhvir Singh.“I thought if we got the decision, we were going to collect the money,” Mr. De Jesus said. “I feel very angry.’’Ahmed Hussain, a server answering the phone at Manhattan Valley on Thursday, said the Singh brothers no longer owned the restaurant. The Singhs could not be reached. Copyright 2017 The New York Times Company.  All rights reserved.

For over 11 years, the Legal Action television show has been airing on a weekly basis throughout the suburbs of Chicago on Comcast. Providing exceptional legal advice in the area of bankruptcy is a valuable tool for many people who are either considering bankruptcy or who have already made that decision to file. The information+ Read More The post 11 Years Running appeared first on David M. Siegel.

Ohio foreclosure law requires a mortgage lender to file a civil complaint to foreclosure a mortgage. In other words, a mortgage lender cannot simply “seize” the property without going through the court system. In some states, a lender can obtain title to the property through a nonjudicial foreclosure such as a sheriff’s sale. A Foreclosure Timeline Each foreclosure timeline is slightly different for several reasons. First, the decision to foreclose lies with the mortgage lender. A person is in default if that person fails to make the payment on or before the due date set forth in the mortgage. In most cases, the lender simply charges a penalty for late payments instead of filing a foreclosure complaint for one or two missed payments. Most lenders send several collection letters and turn the account over to a foreclosure attorney who also sends several letters before filing a foreclosure complaint. However, the timing is up to the lender. Some lenders move more quickly than other lenders. It is impossible to know how many months a lender will allow a mortgage to be in arrears before filing a foreclosure complaint. Another factor in the foreclosure timeline is whether the owner responds to the foreclosure complaint. If you receive foreclosure papers, you have the right to file a response to the complaint to fight the allegations contained in the lawsuit. If you choose to fight the foreclosure, the foreclosure process takes much longer. If you fail to respond to the complaint, the lender files a motion for summary or default judgment. In the case of a default, the lender could receive a Judgment Decree in Foreclosure within three to four months after filing the complaint. However, the court’s schedule is yet another factor in the timing of a foreclosure. Some courts handle substantially higher volumes of cases than other courts. Therefore, a foreclosure complaint can get bogged down in the court system thereby delaying a default judgment or hearing. Stopping the Foreclosure Process There are ways to stop a foreclosure once it has been filed. The first way is to pay the entire past due amount plus costs and attorney fees. However, most individuals facing a foreclosure do not have the resources to come up with a large lump sum to stop a foreclosure. Therefore, many people turn to bankruptcy for help. Filing a bankruptcy case immediately puts a hold on the foreclosure process. The automatic stay provisions of the Bankruptcy Code prohibit a creditor from taking any action to collect a debt once a bankruptcy case is filed, including proceeding with a foreclosure proceeding. Before the mortgage lender can proceed with the foreclosure, it must file a motion with the bankruptcy court to request permission to continue with the foreclosure. Unless the lender can show good cause why it should be allowed to proceed, the bankruptcy case stops the foreclosure from proceeding. In a Chapter 7 bankruptcy, the debtor must bring the balance of the mortgage current before the case is closed or before the court grants the lender’s motion in order to save the home. However, in a Chapter 13 case, the debtor spreads out the past due payments over several years in a bankruptcy plan to save the home. The lender receives a small payment each month from the bankruptcy trustee to repay the past due mortgage payments while the debtor resumes regular mortgage payments outside of the bankruptcy plan. For many people facing foreclosure, a Chapter 13 bankruptcy filing is the only affordable way to save their home from a foreclosure sale. In addition to saving their home, they are able to get out from under other debts, so they have a fresh start to rebuild their credit and financial well-being when they complete their Chapter 13 case. Call an Ohio Bankruptcy Attorney for A Free Consultation If you are facing a foreclosure, there is hope. You do not have to surrender your home without a fight. Our office can help you find an affordable way to catch up your mortgage payments and avoid foreclosure. Do not let a financial crisis take away the home you have worked so hard to provide for your family. Call to learn how filing bankruptcy can save your home. Contact The Chris Wesner Law Office, LLC by calling 1 (877) 350-6039 or by using the contact form on our website to request a free appointment with an Ohio bankruptcy attorney. We have offices in Troy, Springfield, Xenia, Piqua, and Beavercreek for your convenience. The post What Is The Foreclosure Process In Ohio? appeared first on Chris Wesner Law Office.

I’m So Afraid To File Bankruptcy There is a very common concern or fear among those that are in debt with regard to filing for bankruptcy relief. They fear what they don’t know. They don’t know whether they are going to ever get credit again. They fear whether the entire world is going to find+ Read More The post In Fear Of Filing For Bankruptcy? appeared first on David M. Siegel.

  Judge Glen discussed the required elements of a nondischargeability claim under §523(a)(2)(A) inIn re: Thomas A. Cascio Linda L. Steigman, Debtor. Frances R. Bernacchi, Plaintiff, v. Thomas A. Cascio Linda L. Steigman, Defendants., No. 3:16-AP-108-PMG, 2017 WL 1273902 (Bankr. M.D. Fla. Apr. 4, 2017).  The case involved an unmarried couple's purchase of a home.  The plaintiff alleged she contributed $190,000 toward the purchase with the agreement that her name would be put jointly on the property, and that the debtor defrauded her by putting the house solely in her name.  Both parties agreed that the intent was to split the costs and own the home jointly.  A contract with the builder was signed, and construction of the home commenced in 2012.  Plaintiff testified that she paid $ 127,000 for deposits and materials/appliances for the home.  In the summer of 2013 the debtor obtained a VA mortgage in his sole name to finance the balance of the purchase price, the VA mortgage chosen due to lower interest rates.  Plaintiff testified she was unable to sign on the mortgage since the parties were not married, though understood she could be added as an owner a year after the purchase.  The closing on the home occurred in August 2013 with plaintiff acting as the debtor's realtor.  The deed was issued solely in the Debtor's name. The parties moved in in September 2013 and Debtor made the mortgage payments with other expenses split.  The debtor moved out of the home in October 2014 and commenced an eviction action against plaintiff.  Plaintiff vacated the property in December 2014.  A chapter 7 bankruptcy was filed in January 2016, with the house listed with a $450,000 value subject to a $420,000 mortgage with the statement of intent showing an intent to surrender.  The trustee filed a no asset report.  Plaintiff filed a 523(a)(2)(A) complaint asserting that the debtor took money for his own benefit and never attempted to comply with his promise to give her half the house.  §523(a)(2)(A) provides (a) A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt—(2) for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by—(A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition.To prevail under § 523(a)(2)(A), a creditor must establish the traditional elements of common law fraud. The elements are that: (1) the debtor made a false representation with the intent to deceive the creditor; (2) the creditor justifiably relied on the misrepresentation; and (3) the creditor suffered a loss as a result of the misrepresentation.  This burden must be met by a preponderance of the evidence.1   The problem with Plaintiff's allegation is she did now show a misrepresentation of present (or past) fact.  For a representation regarding future performance to be actionable under § 523(a)(2)(A), a debtor must lack the intent to perform the future act when the promise was made. In re Carlson, 2008 WL 8677441, at 3 (10th Cir. 2008).  There was no evidence that the debtor did not intend to transfer 1/2 the house to her at the time the ontract with the builder was made or at the time of plaintiff's contributions. At the time of these contributions the parties were living together and the relationship was good.  Even though debtor ultimately married another woman, there was no evidence that he had a relationship with this person at the time of the contributions.    The putting of the home initially in Debtor's sole name was explained by the requirements for the VA mortgage.  Further, any reliance by plaintiff of debtor's promise of future marriage was not justifiable.    In re Bryant, 1997 WL 375692, at 7 (Bankr. M.D. Fla.).  Further, the Plaintiff alleges that the Debtor promised to “quitclaim” to her a one-half interest in the home within a year after its purchase. The Plaintiff's reliance on the alleged verbal representation is not justifiable. In Florida, the statute of frauds provides that no action can be brought to enforce a contract for the sale of land unless the contract is in writing and signed by the party to be charged. Fla. Stat. § 725.0121 In re: Thomas A. Cascio Linda L. Steigman, Debtor. Frances R. Bernacchi, Plaintiff, v. Thomas A. Cascio Linda L. Steigman, Defendants., No. 3:16-AP-108-PMG, 2017 WL 1273902, at *3 (Bankr. M.D. Fla. Apr. 4, 2017).2 In re: Thomas A. Cascio Linda L. Steigman, Debtor. Frances R. Bernacchi, Plaintiff, v. Thomas A. Cascio Linda L. Steigman, Defendants., No. 3:16-AP-108-PMG, 2017 WL 1273902, at *6 (Bankr. M.D. Fla. Apr. 4, 2017)Michael Barnett.  www.tampabankruptcy.com

When you die, will your property be sold to pay your creditors? Are your loved ones required to pay your debts even if you don’t have enough assets to cover your debts? Because the answers to these questions can be complicated depending on your situation, it is important to seek the advice of an experienced bankruptcy attorney and estate planning attorney. The Chris Wesner Law Office, LLC handles both estate planning and bankruptcy matters. Therefore, we have the knowledge to help families and individuals as they seek to protect their assets and loved ones from creditors both before and after death. The Probate Estate When a person dies in Ohio, the estate is responsible for the payment of any debts the person owed at the time of his or her death. The representative of the estate is responsible for reviewing each claim against the estate and either paying the debt or objecting to the debt. After all legal debts are paid, the balance of the estate is distributed to the heirs according to the will or intestate law. If the decedent did not have sufficient assets to pay his or her debts, Ohio law dictates which debts are to receive priority for payment. Ohio Revised Code §2117.25 sets forth the order in which debts are to be paid by the estate’s representative when there are insufficient funds to pay all debts. The way Ohio law prioritizes debts in an estate is similar to the way the Bankruptcy Code prioritizes debts to be paid in a bankruptcy case. Each creditor falls within a certain “class” for the purpose of prioritizing debts. For example, costs and expenses related to the administration of the estate are paid before funeral expenses, and funeral expenses receive priority over medical expenses. Are Secured Debts Handled Differently in An Estate? Secured debts are treated differently from other debts in an estate. A secured creditor holds a lien on property of the decedent such as a car or a home. If the debt is not paid, the secured creditor can seize the property to satisfy the debt. This can create a problem for co-owners and heirs if the co-owner or heir is unable to take over payments or pay the lien in full. In some cases, a co-owner or heir may consider filing bankruptcy to protect his or her interest in the property if it is impossible to repay the debt. Co-signed Debts and Joint Accounts Likewise, joint debts can present a problem after death. The law does not require that family members or heirs use their own assets or funds to repay debts of a loved one when he or she  passes.  Unfortunately, some creditors aggressively pursue and harass loved ones to repay debts they are not legally liable to repay. A bankruptcy attorney can help family members who are being harassed to repay debts of a loved one. However, if you are a co-signer on a debt, you are legally liable for the entire debt if the other co-signer refuses to repay the debt or passes away before the debt is paid in full. The creditor can take any actions allowed by law to collect the debt, including filing collection lawsuits and repossessing secured property. A co-signer should consult with a debt relief attorney if he or she receive notice from a creditor that a debt is owed in full because the probate estate is unable to pay the debt. Is All Property Subject to a Creditor’s Claim? Most property can be liquidated to pay the debts of a decedent. However, some property is exempt from the claims of creditors. For example, accounts that pass directly to a designated beneficiary outside of the probate estate, such as a life insurance policy or a retirement account, are exempt. Likewise, property that is held in a trust is typically exempt. Call an Experienced Ohio Bankruptcy Attorney If you have questions about estate debts or bankruptcy matters, we urge you to contact The Chris Wesner Law Office, LLC for a free consultation with an experienced bankruptcy lawyer. We have locations throughout the Miami Valley, including Dayton, Troy, Piqua, Xenia, and Springfield. Please call our office at 1 (877) 350-6039 or use the contact form on our website to speak with a trusted and compassionate attorney and get help today. The post Who Is Responsible For My Debt If I Die? appeared first on Chris Wesner Law Office.