Wednesday, October 8, 2014

Bankruptcy is not a four-letter word, while DEBT is.

Guilt, Fear, and Humiliation: these negative emotions are perpetuated by the mortgage banks, credit card companies and pay-day loan companies who stand to lose when one of their customers (or should we say victims?) files for personal bankruptcy. They are perpetuated by bank-controlled consumer credit counseling agencies who refuse to mention the word bankruptcy. This is because bankruptcy is your most powerful weapon in debt relief. This is also why some people believe they should avoid bankruptcy at all costs even to the point of using (throwing away) their retirement accounts to pay part of the DEBT. 

Put the shame where it belongs
Why is Bankruptcy in America becoming a very common occurrence? Because for many years banks, insurance, credit card, and pay-day loans companies have engaged in predatory lending practices to generate fees and bonuses for themselves without regard to whether the debtor can repay. They extend credit through one-sided contracts without provisions for real life situations such as job loss or family illness. When their customers experience these often devastating situations the banks actually make more money by charging late fees and raising interest rates! When illness strikes and medical bills pile up they deny claims and cancel insurance policies. Then when payments are missed they deny loan modifications and start the foreclosure process. Yet the stigma rests on you? Something is wrong with that picture.

Your right to a level playing field
By leveling the playing field Bankruptcy protects debtors in these situations. Without the legal remedy of bankruptcy, people in financial distress would have no real options to get relief from these companies and insurers. Bankruptcy is written right into the Constitution (Article I, Section 8, Paragraph 4) and therefore, United States Bankruptcy Laws has been around for more than 200 years. Bankruptcy is actually good for the economy. By allowing people to remove unmanageable debt, and to receive a Fresh Start, they are better able to contribute to their community.

You are not alone
There have been prominent people in history who have filed for bankruptcy, such as former presidents of the United States Abraham Lincoln, Harry Truman and Thomas Jefferson all filed for bankruptcy. American icons such as Milton Hershey, Henry Ford, and Mark Twain also filed for bankruptcy. These highly successful people filed for bankruptcy prior to their greatest achievements. If the legal right of bankruptcy had not been available to these great Americans we might not even recognize their names today. Bankruptcy allowed them to learn from their mistakes and go on to contribute great ideas, experiences and inventions to our country. Over one million Americans not only survive but are helped through bankruptcy every year.

Begin your journey to a Fresh Start now!

It is time to end the cycle. The constant worry, fear and stress are not worth it and can even damage your health. With the help of a knowledgeable bankruptcy lawyer, you can find a way out. Get on solid ground and head in a better direction with Salt Lake City Bankruptcy Attorney Mark J. Gregersen. At our firm, Gregersen Law, we focus on bankruptcy and debtor relief services.

Thursday, February 20, 2014

Can Filing for Bankruptcy Affect my Tax Refund?

Should I file my taxes before I file for bankruptcy? While every situation is different, the most common answer is yes, file your taxes before you file for bankruptcy if you are expecting a refund.

When filing for bankruptcy, remember that any and all cash is considered part of the bankruptcy estate and is given to the trustee once you file.  You will not be able to keep it.  Tax refunds received after filing for bankruptcy are considered part of the bankruptcy estate.  So, if you anticipate receiving a tax refund, it may be in your best interest to file your taxes and receive your refund before filing for bankruptcy.  However, make sure you have a plan in place for where that refund will be going.  Because as we mentioned, if you keep it as cash or leave it in the bank, it goes to the trustee once you file.  Here is a great blog post we wrote on smart ways to spend your tax refund prior to filing for bankruptcy.

Something important to remember-timing is everything.  While you may want to wait until after receiving your tax refund before filing for bankruptcy, don't wait too long to file.  Any income earned prior to filing becomes part of the bankruptcy estate, and that includes a pro-rated portion of your next years tax refund.

Come in and receive a free consultation and we will discuss your situation specifically to ensure you are making the best choices on how to get the most out of your fresh start!  Call Today!

Sunday, February 16, 2014

The Proper Way to Go Broke Before Filing Bankruptcy

From our experience, we have seen many smart ways, and many not so smart ways people use their money prior to filing bankruptcy. Here are a few lessons that people have learned along the way:

1. Make sure on the day you file there is nothing in your bank account.  This doesn't mean withdraw everything you have just prior to filing and stuff it under your mattress.  Any and all cash is considered part of the bankruptcy estate as of the day you file, and it all goes to the trustee.  You don't get to keep any of it.

2. You are allowed to plan or "get your ducks in a row" prior to filing bankruptcy.  You are also allowed to maximize the exemptions and increase the property you get to keep.  That includes converting non-exempt assess (such as cash) into exempt assets (like a washer or dryer). Making smart purchases with your money prior to filing can help you transition out of bankruptcy and help reduce the amount of cash that may become part of the bankruptcy estate.

3. Don't use your money in a way that can be considered as preferential payments.  This includes paying back debts owed to family or friends.  Any money that goes back to family or friends (or even a favorite institution) prior to filing bankruptcy could be viewed as an attempt to defraud your other creditors, and could be recalled by the trustee. Show your family your love and appreciation for their patience and caring another way, like by painting their fence or baking them brownies. You can always repay them after the bankruptcy is discharged.

4. Some exempt assets to consider purchasing prior to filing bankruptcy include:
Most major appliances (NOT televisions)
Beds and bedding
Clothing and shoes
Food - up to a year supply
Back payments on secured assets such as cars or homes (NOT recreational vehicles)
Bringing utility payments current
Necessary and current bills such as rent or cell phone bills
It can also be used for paying the cost of your bankruptcy

5. Some items we recommend NOT purchasing or spending money on prior to filing bankruptcy include:
Vacations or any travel (this includes a weekend in Wendover)
Recreational Vehicles
Paying more than your current rent
Anything that would not be considered exempt.  Call us if you have any questions about what is considered exempt.

6. Plan all payments just prior to filing bankruptcy in such a way that you have not pending transactions on the day you file.  If you have a payment that hasn't been processed by the bank and still has not cleared your account, it will be considered part of the estate. It may be wise to make any payments the week before you file by withdrawing the money and making the payment as a cashier's check.

Still unsure about how best to plan for your bankruptcy?  Call us today for a free consultation and we will help you maximize your options.

Sunday, September 8, 2013

Bankruptcy Reality Check: "Too Broke to File for Bankruptcy"

At almost every initial free consultation bankruptcy meeting, with a prospective client, the question arises, “if I’m broke, how am I supposed to pay for the bankruptcy”?

Many consumers worry about paying for bankruptcy, thinking they may never be able to afford it. If you are thinking of resolving your debts by filing bankruptcy, time may be on your side. You may be able to stop making payments on some, or maybe even all of your current debt. Freeing up of that income may then be used to pay your bankruptcy fees. In fact, many people pay for bankruptcy by doing just that.  Every situation is different, so you need the advice of an experienced Utah bankruptcy attorney to determine which creditors you may stop paying, and when.

Borrowing from a credit card or any other institutional lender, is not an option that an attorney can recommend as a solution for paying your bankruptcy fees. Generally, a decision to take money out of retirement accounts (whether IRA or 401k), may not be a wise choice. To file bankruptcy and pay in this manner could be a last resort, realizing that it may have unintended tax or retirement consequences.

Getting help from your family members, however, may be appropriate, as long as you are honest about why you need the money. Only you can determine whether your relationship is strong enough, but if you have sympathetic family members or close friends, then this may be a good option for you.

The easiest time of year and one of the easiest ways to pay for bankruptcy is with your tax refund. This is especially true if you are accustomed to using your tax refund to catch up on all the bills that have gotten behind over the past year. If you are living in that kind of yearly pattern, you probably need to consider bankruptcy.

Speak with an experienced Utah bankruptcy attorney about your individual financial situation. You may find that you can use your tax refund or other potential options along with the advice of an experienced bankruptcy attorney to get a fresh start.

Monday, August 26, 2013

What is a Chapter 13 Bankruptcy?

A Chapter 13 bankruptcy is filed by individuals who are either capable of paying back a portion of his or her debt or need to file it to protect assets that cannot be protected in a Chapter 7.  It can also be filed when a debtor is behind on mortgage payments and is  about to lose their home.

Chapter 13 Bankruptcy is a “reorganization” bankruptcy.  It is basically a court-supervised debt repayment plan.  Chapter 13 Bankruptcy allows you to restructure your debts into a payment plan that you can afford.  Also, in a Chapter 13 Bankruptcy, there is no mandatory liquidation of your assets, which means you usually keep all of your property.

First your Petition is filed, most actions by your creditors are blocked or suspended by the “Automatic Stay.”  The Automatic Stay prohibits your creditors from collecting on most types of debts.  While in a Chapter 13, the debtor is protected by the Bankruptcy Court from collection actions. The law prohibits creditors from taking actions to collect debt without the Court’s permission. This include repossessing cars and foreclosing on real estate. For this reason, a Chapter 13 is an attractive option that can help save your assets.  

Monday, August 19, 2013

Utah Bankruptcy Do's and Dont's

Bankruptcy Do's:

  • Do be open and honest with your attorney — We handle all personal information matters with confidentiality and privacy. Be sure to tell us everything so we can file your bankruptcy petition accurately.
  • Do continue making payments on property you wish to keep — If you are in default, your creditors can repossess the vehicle or begin foreclosure on your home. We can help even up to the last moment, but it is best to avoid it altogether.
  • Do consider adjusting your tax withholding status — The goal is to get close to no refund. If you get a refund, it is considered an asset in Chapter 7 or could affect your Chapter 13 plan.

Bankruptcy Don'ts:

  • Don't use your credit cards — Once you decide to file bankruptcy, do not incur additional debt that you cannot pay. In some cases, that debt may not be discharged. You should not use your credit cards within 90 days of filing.
  • Don't hide your property — Even though you may fear losing your property, transferring it to another person may be seen as fraudulent.
  • Don't pay off personal loans — If you owe money to family members, now is not the time to repay them. Let the bankruptcy court determine the priority of your creditors and handle it through the proper channels.
  • Don't spend your retirement money — You have worked hard and do not want to lose the nest egg you have saved for retirement. By taking an early withdrawal from those accounts, however, you face penalties and taxes. It is not worth it. In fact, retirement accounts are often exempt in bankruptcy.

Learn About Your Options Today During A Free Consultation! Call us at 801-478-6823 or 801-614-8066.