The Christmas before Bankruptcy

Depending on your family, Christmas gift giving may be huge or it may be minor.  If you fall in the former category and you are considering a bankruptcy you need to be aware of some bankruptcy rules which could impact your bankruptcy filing.

Gift giving and bankruptcy:

If you are a big giver and routinely rack up credit card debt ensuring that everyone gets just what they want, you will want to go easy the Christmas before bankruptcy.  In the forms that are required by the bankruptcy code, there is a requirement that you list any gifts made to a family member of more than $200.00 or more than $100.00 to a charitable organization.  Giving cash or items to a charity is generally not a problem so long as you don’t go over 15% of your gross income during the year in which the contributions were made.  The reason behind the restrictions is that congress did not want potential debtors to squander their assets in an attempt to hide them from their creditors before filing a bankruptcy.  If you did give a bunch of gifts to family members this Christmas, it may be best to wait until next year to file.  Your best bet if this situation applies to you is to contact a local bankruptcy attorney and ask their advice.

Gift receiving and bankruptcy:

What really matters here is what was given and is it an exempt asset.  If you received cash for Christmas, that cash gift could push you over the income threshold between a chapter 7 bankruptcy and a chapter 13 bankruptcy if you were already close.  If instead you received a car or a new mac book, those are items which would need to be listed.  What happens next depends on the value of the assets and the exemptions available.  If you have enough exemptions available, you will not have anything to worry about.  If on the other hand there are not enough exemptions to protect the new assets, a chapter 7 trustee may take them, or you may be pushed into a chapter 13 bankruptcy.  Again, you would want to talk to a local bankruptcy attorney to make sure that this will not be an issue in your case.

Best of Luck,

Steven M. Palmer, Esq.
Licensed in WA and OH
http://www.curtislaw-pllc.com
http://www.northwestbankruptcyattorneys.com

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5 Tips for Choosing the Right Bankruptcy Attorney

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Filing a bankruptcy is a big life choice.  As I have written in previous posts it is not nearly as scary as people assume it to be.  That said, it is important to choose an attorney who knows what they are doing and who has a reputation for good client advocacy.  You don’t want to get stuck with someone who won’t return your phone calls, is rude, or who gets disbarred after they start taking your money.  What follows are some tips for choosing a good bankruptcy attorney.

  1. You can find attorneys with bankruptcy expertise by using the attorney finder function of www.nacba.org.  NACBA is the National Association of Consumer Bankruptcy Attorneys.  Attorneys that you find on this site have paid dues to the organization which I believe shows that they are committed to the bankruptcy field.  You want an attorney who files bankruptcies regularly, not once or twice a year.
  2. Another good source is your local bar association.  Contact your local bar association and see if they have a referral service.  Referral services generally require attorneys to have 5 years of experience in the field you are looking into.  They also often require that their attorneys they refer clients to have completed continuing education courses in the field you are looking for.
  3. Ask around about the attorneys reputation.  If you do not know anyone who has used them, look online.  Attorneys are rated by www.avvo.com.  While their methodology may not be perfect, (for example, you might have a great attorney with 20 years experience who has a rating of 7.0, on the other hand you might have one with 2 years experience with a 10.0.)  I am not sure how accurate the ratings are, but you can at least see if they have any reports of misconduct.
  4. Go to a free consultation.  Most bankruptcy attorneys will offer you 30-60 minutes of their time to figure out if you are a good candidate for bankruptcy and to determine how complex your case is.  This really serves an additional purpose of helping you to determine if it is someone you would be comfortable working with.  Some attorneys do charge a consultation fee.  If this is the case with the attorney you want to meet ask them if they apply that fee to the overall attorney’s fee.  Even if they do charge an additional fee for the consult, it may be worth it if their reputation is sterling.
  5. Ultimately, make the decision using all the information at your disposal.  If they were referred by a reputable source, if they have a good reputation, and if the fee is something you are comfortable paying, be confident in your choice to go forward and provide your attorney all of the information that ask for.  If you have done this, chances are your case will go smooth.

Best of Luck,

Steven M. Palmer, Esq.
Licensed in WA and OH
http://www.curtislaw-pllc.com

The Dos and Don’ts of Filing a Bankruptcy

Alright, you have it in mind that filing bankruptcy is going to help you to reach your goal of a fresh start.  Now what?  Well, you need to find a good bankruptcy attorney to help you file, but besides that, there are some dos and don’ts of filing that we will take a look at in this post.  The last thing that you want to have happen is to have your discharge denied or revoked because you did something that you shouldn’t have done.

What to do before you file:

  1. Do find a good, experienced bankruptcy attorney.  You can do this by looking around on the internet and going to a free consultation to see what the attorney has to say.  I recommend that you visit the attorney finder page of the National Association of Consumer Bankruptcy attorneys.  That link is http://www.nacba.org/find-an-attorney/ You can also find bankruptcy attorneys at http://www.avvo.com and then search for a bankruptcy attorney in your area.
  2. Do get all of your documentation in order.  It will be very valuable to your attorney and will save you time at his or her office if you have the following documents before you go in:  Paystubs for the last 7 months, bank statements for the last 2 months, tax returns for the last 2 years, copies of the most recent retirement account statements, most recent statements for car or home loans, credit reports, divorce decree or separation agreement and a list of everything that you own.  Also if you have any pending lawsuits, or if you could sue someone be ready to let your attorney know about those suits.  Your attorney may require more or less documentation, but if you have all of this, you are well on your way to getting filed.
    1. You can get your credit reports for free by going to www.annualcreditreports.com
    2. If you cannot find your taxes for the last two years you can request them at www.irs.gov.
  3. Do be honest and forthcoming with all of the questions that your attorney asks you.

What NOT to do before you file.

  1. Do not pay back friends or family members.  Everyone you owe must be listed in the bankruptcy schedules.  The debt would get discharged.  If you wanted to voluntarily pay them back, do it after the bankruptcy.
  2. Do not transfer any items out of your name prior to filing without consulting with an attorney.  The trustee could view this as a fraudulent transfer and look to undo it in the bankruptcy.
  3. Do not buy anything worth more than $500.00 in credit in the 3 months leading up to the bankruptcy.
  4. Do not pay any one creditor more than $600.00 in the 3 months leading up to the bankruptcy.
  5. Do not take out payday loans of more than $750.00 in the 70 days leading up to the filing of the bankruptcy.
  6. Do not go on an expensive vacation prior to the filing.
  7. Do not spend your money on items that are not reasonable or necessary before filing bankruptcy.
  8. Do not freak out.  Bankruptcy is really not that bad.

If you have done anything on the DO NOT list, contact an attorney and see what you need to do before you file.

Best of Luck,

Steven M. Palmer
Licensed in WA and OH
http://www.curtislaw-pllc.com