Tag Archives: cleveland oh

What Can Happen to Me If I Hide Assets when Filing a Chapter 7?

Filing for a chapter 7 bankruptcy helps a debtor discharge debt and get a fresh start. The bankruptcy protection essentially wipes out most debts. However, when filing this repayment plan, you must list all your assets and liabilities in the paperwork. Failing to do so can land you into legal trouble.

Here we will explain the legal repercussions of hiding assets when filing for chapter 7 repayment plan.

Legal Repercussions of Hiding Assets Explained

Hiding assets means not divulging all assets in the Schedule of Assets section of the bankruptcy petition paper. Many debtors hide assets in various ways.

  • Lying about the asset’s ownership
  • Transferring of an asset to another person
  • Creating fake documents to show the asset has zero value

Here are some of the things that might happen if you hide assets when you file for a repayment protection plan.

Reverse Decision to Discharge Debts

When hidden assets are discovered, the trustee may reverse the decision to discharge debts. The trustee may order to take back all or some of the debts up to one year after the discharge date.

As a result, you will still owe the debts that you wanted to discharge by filing for Chapter 7 repayment plan. In addition, you won’t be able to discharge these debts in subsequent bankruptcies.

Sell Assets

The trustee may also order to sell the assets that you had tried to hide. The proceeds from the assets will be used to discharge the debts. Moreover, you will owe any debts that are left over after that. In this way, you may lose ownership of your personal assets such as your house or a car.

Criminal Charges

When you file for a bankruptcy protection, you state that all information is true and accurate. In case hidden assets are discovered, later on, you could face a criminal conviction for committing bankruptcy fraud. This can result of imprisonment of up to twenty years, a fine of up to $250,000 or both.

An exception is when you had made a genuine mistake when filling the paperwork. The trustee would understand if you are able to convince him that you had no intention of committing a fraud. For this, you need to hire an experienced bankruptcy attorney. A bankruptcy lawyer will help convince the court that no deception was attempted and that assets were not divulged due to confusion when filling the paperwork, if that is the case.

You should talk to an experienced bankruptcy lawyer before you file a Chapter 7 bankruptcy protection.

_______________________

Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

What Kinds of Debts are Discharged in a Chapter 7 Bankruptcy?

Bankruptcy can be a solution for solving financial problems faced by individuals and businesses.   It is sometimes the only workaround to the debt problem. Financial experts recommend considering this option as a last resort to ease the debt burden.

In a Chapter 7 bankruptcy, a lawyer will represent you in the court to discharge debts. Debts that are discharged no longer require any payment. This will ease the burden of having too many debts that you cannot repay.

An important consideration when choosing Chapter 7 bankruptcy is the kinds of debts that will be discharged. Here you will learn about the debts that can be discharged when you file.

Debts that Can be Discharged in a Chapter 7 Bankruptcy

You can discharge certain pre-petition debts when you file for the bankruptcy protection. Pre-petition debts are those obligations that have incurred before the filing date. Some of the pre-petition debts that you can discharge include the following.

  • Medical bills
  • Credit card debt
  • Personal loans including car, truck or other vehicle loans
  • Promissory notes
  • Lines of credit
  • Mortgages including second and third mortgages
  • Certain lawsuit judgments
  • Obligations under contracts and leases owed by a sole proprietor including residential and commercial property leases
  • Unsecured business debts owed by a sole proprietor to consultants, suppliers, and professionals such as architects or accountants.

All the above types of debts are dischargeable under the Chapter 7. Once you file the protection plan you may be able to discharge these loans. It’s advisable to contact a professional bankruptcy lawyer who can help you discharge maximum loan amount.

Debts Not Dischargeable Under Chapter 7 Bankruptcy

You should also know about the loans that can’t be discharged when you file for the Chapter 7 bankruptcy plan. Post-petition loans that you rack up after filing the paperwork are not dischargeable. In addition, certain financial obligations can’t be discharged whether you obtain them prior to or after submitting the paperwork for initial bankruptcy, such as:

  • Alimony
  • Child support
  • Student loans (unless there is extreme hardship)
  • Fines and penalties owned to government
  • Payment for driving under the influence
  • Divorce settlement agreements
  • Loan from pension plans
  • Personal injury judgments

You should discuss your options with a professional bankruptcy law attorney.

_____________________________

Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

What are the Benefits of a Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows the debtor to pay some or all of the debts. The debts can be paid over a period of three to five years as per a court-approved repayment plan.

The decision to file a Chapter 13 Bankruptcy should be weighed carefully. You should consider the benefits before making a move. Here are five benefits of this debt relief option that you should consider to make an informed decision.

1. Flexible Payment Terms

The trustees of chapter 13 bankruptcy are usually flexible about payment terms. You may be allowed to reduce debt payments, extend the payment period, or give up an asset that you are making payments on.

When you file a chapter 13 bankruptcy, you may also consolidate some debts. The debts can be reorganized into one affordable payment that you can pay in up to five years.

2.  Bankruptcy Shown on Credit Report

An advantage of chapter 13 bankruptcy over chapter 7 bankruptcy is that it’s shown on the credit report for a lesser period.

With chapter 7 bankruptcy, bankruptcy is shown in the credit report for 10 years. On the other hand, it’s shown for just 7 years in the chapter 13 bankruptcy. As a result, creditors will know about the bankruptcy for a longer period if you file chapter 7 bankruptcy as opposed to a chapter 13 bankruptcy. This is important since the report is viewed by house loan, vehicle loan, and credit card companies.

3. Save Your Property

Another benefit of a chapter 13 bankruptcy is that you may be able to save your home if you file before the foreclosure date. The mortgage payments due known as arrearages can be paid back over a period of three to five years.

In addition, if you have a second or higher mortgage, you may only have to pay the first mortgage through a process known as ‘lien stripping’.  To become eligible for this option, the home value must be equal to or lower than the amount owed on the first mortgage when the bankruptcy was filed.

4. Lower Payments

In some cases, chapter 13 bankruptcy will reduce the balance owned. In this way, you can continue to make payments for your personal loans such as a car loan. It will prevent repossession of your asset and you can catch up on the loan payments.

5. Reduce Tax Amount

Your taxes can be paid through a chapter 13 payment plan. The IRS will not hound you to make payment in full, and accept the amount is agreed by the bankruptcy court.

Eligibility for Chapter 13

Only individuals can file for chapter 13 bankruptcy. Businesses are not allowed to file for this repayment plan. However, sole owners and partners can file for the relief option individually.

To be eligible for the chapter 13 bankruptcy, you must have enough income to repay the debts as per a court-approved repayment plan. In addition, unsecured debts must be less than $394,725 to be eligible for chapter 13. For more information about the other benefits and also the eligibility criteria, you should contact a professional bankruptcy law attorney.

______________________

Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Can Taxes be Discharged in Bankruptcy?

It is a general misconception that taxes can’t be discharged in bankruptcy. While you cannot eliminate all taxes, there is a possibility of discharging some.

In this article, you will know the cases when you are allowed to reduce your tax liability in bankruptcy.

Taxes in Bankruptcy: What You Should Know?

Bankruptcy can provide you relief from the tax debt. How much relief you can get depends on different factors. Some of the factors that determine which taxes can be eliminated include the following.

  • Age of taxes — The tax amount due that you wish to discharge must be due at least 3 years before you file for bankruptcy.
  • Assessment of taxes — The IRS must have assessed your income tax due at least 240 days before filing for bankruptcy.
  • Type of taxes involved — Only income and sales taxes can be discharged in bankruptcy. You cannot discharge other types such as payroll or property taxes when you file for bankruptcy.
  • Timely submission of taxes —The tax return for the amount due must have been filed at least 2 years prior to filing a bankruptcy petition.
  • Apart from the above rules, you should also note that bankruptcy won’t help if a person has tried to evade taxes using a fake social security number or other fraudulent manner in the past. However, this exception applies only to willful evasion of taxes. If a person has made an honest mistake in entering the wrong information, the tax liability can be discharged through bankruptcy.

Another important thing you should note is that you can’t eliminate tax lien on your property when you file for bankruptcy. You need to pay the tax lien if you want to sell your property. However, the IRS sometimes agrees to lift the lien. You can request the IRS to lift the lien by filing tax Form 12277.

 

Final Remarks about Taxes in Bankruptcy

Taxes in bankruptcy is a complex topic. Make sure that you have all tax records before filing. The court will ask you to submit a copy of the most recent tax return.

Getting the help of a bankruptcy lawyer will help you navigate through these complex laws

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Understanding Chapter 7 Bankruptcy

If you are in Ohio and are contemplating about filing a bankruptcy under chapter 7, you need to understand some of the statutes under this chapter. In essence, a Chapter 7 bankruptcy is known as liquidation wherein as a debtor, you will be able to pay off all your debts by selling all your assets and dividing its proceeds according to the number of creditors. A court appointed trustee will be selected by the bankruptcy court that will serve as the administrator of all your assets up until it is converted into cash and repay all your financial obligations. They will also have the major responsibility of monitoring the bankruptcy cases and supervising all activities between a debtor and his creditor.
If you receive a bankruptcy discharged, it means that the creditors are no longer legally allowed to collect the debts you accumulated and you are no longer compelled to pay back all your discharged debts once your bankruptcy case is over. However, not all debts are dischargeable. A creditor can object to the discharge of your debts if they have the reason to believe that a fraud was committed in connection with the filing of bankruptcy of the debtor. Also, there are debts that cannot be discharged such as payday loans or cash advances with a total of more than $925 obtained within seventy days prior to the filing of bankruptcy and purchase of luxury goods using credit cards among others.
Except in cases where the person in debt can prove remarkable conditions to bypass public policy, the following financial obligations are regarded as automatically nondischargeable:

 

  • Unscheduled
  • Debts for child support or alimony
  • Arrears to government agencies
  • Student loans with a few exceptions
  • Financial liabilities for personal injury obtained by the debtor while operating a motorized vehicle while intoxicated
  • Criminal restitution including court penalties and related fines

 

As discussed with your bankruptcy attorney, before an individual can file for Chapter 7 Bankruptcy, he or she is required by the law to meet the minimum amount of unsecured debt loads and must not exceed the amount of secured debts required by law. During filing, applicants are also required by Chapter 7 bankruptcy code to furnish a comprehensive proposal of repayment scheme and this can be done with the help of an experienced bankruptcy lawyer which has years of experience when it comes to performing his duties focusing on Chapter 7 bankruptcy. The debtor is also allowed to continue operating his business during the stage of Chapter 7 and this allows the debtor to engage in trading and selling even without the permission of the court which under any circumstance, cannot be done without the code of Chapter 7 that will be filed with the help of your bankruptcy attorney.
DESCRIPTION
This blog discusses the Chapter 7 bankruptcy as well as specific debts that are considered dischargeable and not dischargeable.

 

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Can I Rehabilitate My Credit Report after Bankruptcy, and How?

Yes, you can rehabilitate your credit report after bankruptcy. Even though the bankruptcy details remain on your credit report for as much as ten years, you can immediately begin to improve your score after filing for bankruptcy. This is quite important considering the fact that credit companies, including car finances and mortgagors, will examine your credit report. Credit reporting companies generally look at your outstanding debt, your payment history, your length of credit history, and also how much new credit you are seeking; all of these are put together to determine your credit score.

 
The American economy in a sense is paradoxical: While one goes into bankruptcy because he or she has defaulted in paying off debts, one of the fastest means of rehabilitating your credit report is to spend even more and establish a better credit history. It is believed that your power to spend more after bankruptcy translates into increase earning power to show you are more credit worthy and responsible.

 
But before applying for new credit cards, try to purchase within your means, paying off your bills in full at the end of every month; the essential thing is to improve your repayment habit. Paying off debts in full when they are due, and making sure your debt is as low as possible when compared to your available credit, will enhance your ability to earn more, and that will put you in a better light when it’s time to borrow money. In other words, always try to spend within your means before you borrow more money. Adopting this approach when you assume more debt will help to rehabilitate credit report as you will make your payments in full and on time; and eventually, if this process is continued and improved upon, your credit report will become much better.

 
Talk to a professional bankruptcy attorney or credit counsel to properly guide you in your quest to rehabilitate and improve on your credit rating. Going into bankruptcy is not an end in itself, but an opportunity to make a fresh start, and will need to make wise financial short and long term decisions.

 
Summary
The blog explains that it is possible to rehabilitate and improve on the credit report. It also highlights the steps necessary to be taken to achieve this over time.

 

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Can the Trustee Take My Tax Refund?

Possibly, the trustee can take your tax refund according to the rules in Chapter 7 bankruptcy. This depends on whether the tax refund is protected under the Bankruptcy law by what are called “exemptions.” The trustee is like the lawyer for the creditors you who own the debt you are trying to discharge in your bankruptcy. His job, as their lawyer, is to try to get as much money from your assets so that he can to pay off the debts you are discharging; however, the law protects most of your non-luxurious assets in what are called “exemptions.” Exemptions are like pockets of money that the law allows you to keep, and which the trustee cannot take. These exemptions include $450.00 for cash, $1,225.00 for a wild card that can be applied across the board to any asset of you choice, child credits exemption and earned income exemptions. You can “stack” or add exemptions together to pay any single debt. Your attorney will try to protect your tax refund under one or more of these exemptions so you can keep as much of your refund as possible.

 

However, if your refund is above what is protected by these exemptions, the trustee may still be able to take the difference. To protect your tax refund from being collected by the trustee, wait to file until you collect it before filing for bankruptcy. In other words, once bankruptcy is filed, tax refunds automatically become liable for collection by the trustee for settling of your debts. Tax refunds which are from the prior year are included in the total property owned by you and are considered part of the assets to be used to service the debts. However, as stated above, you may be able to protect you refund or a large portion based on these exemptions.
There are different ways a trustee can attach a refund. In some cases, the refund is sent directly to you, and you will be expected to hand over the check to the trustee when you receive it. In other cases, the trustee notifies the Internal Revenue Service of your bankruptcy condition to intercept your tax refund; so, when it’s time to receive the tax refund, it goes directly into the trustee.
The best way to go about protecting your tax refund from being taken by the trustee is to talk to a Bankruptcy attorney before you file for Bankruptcy.
Summary
The blog explains that the trustee is authorized to take your tax refund unless it can be protected under exemption. Exemptions are like pockets of assets that the law allows you to keep which are protected from the trustee and from your creditors. It also advices you in such to seek the help of an attorney to better understand the whole process before you file a bankruptcy.

 

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Means Test in Chapter 7 U.S. Bankruptcy Law

The Means Test is a method implemented under the new bankruptcy law to ensure that people who file for bankruptcy really cannot afford to pay their debts. The intent behind this law is to ensure that those individuals who really are in need, are afforded a fresh start under the law.

 
Under the means test an individual must determine his total gross monthly. The law includes virtually all income except payments you receive under the Social Security Act, such as SSI, SSDI, and TANF. Included also is the income that your spouse earns if you are living together, even though your spouse is not included with you in your bankruptcy . Under the means test, all of ones gross income is taken into account over the past six months to filing, and an average is taken. The larger your household, the larger that amount can be in order for you to “pass” the means test. The amount permitted for a household of your size is determined by the Census Bureau and the Internal Revenue Service.

 
The government computes the total gross amount you are permitted to make per month after taking into account the average necessary expenses for a household your size. If therefore, your household makes over this medium amount, you may still be able to file a bankruptcy by reducing your income with unusual necessary monthly expenses. Also expenses for your spouse can be included to reduce this total amount. If you pass the test you will be able to file a Chapter 7 bankruptcy. If you do not pass the test, you may still be able to file a Chapter 13 bankruptcy. If is important that you consult your eligibility to file a chapter 7 bankruptcy with a bankruptcy attorney to determine if you can pass the means test and will qualify to file a bankruptcy.

 
Summary
This blog discusses the means test and generally how one can determine if one’s income is under an amount determined for a household that is your size so that you will be eligible to file Chapter 7 bankruptcy.

 

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

 

 

Can I Keep My Car if I file for Bankruptcy?

The law permits you to keep one vehicle whose value or equity after reducing any lien for financing is equal to $3,675.00 or less. You can determine the general value of your car by Googling NADA or Kelly’s Blue Book and checking it out there. The trustee may valuate your car differently than that amount, but it gives you a general idea as to the value. You should also reduce the value based on the number of miles driven and the condition of your vehicle. The vehicle exemption under Ohio law protects a vehicle with a value up to $3,675.00; you will be able to add onto that another exemption, called, “wild” car of up to $1,225.00.

 
If the equity in your car as discussed above is less than the combined exemptions listed, you will be able to keep your car. But if the equity in your is over that amount, and you still want to keep your car, then you may have to pay to the trustee the difference between the value and your exemptions. So, for example, if after your car is paid off in full from financing, it is worth $6,000.00; and you apply the car exemption of $3,675.00 and the wild card of $1,225.00, the total value of the car that will be protected totals $4,900.00. Subtract that amount from $6,000.00, the Blue Book value of your car. So in order to keep your vehicle, you will have to pay approximately $1,100.00. However, that amount may vary depending on how much the trustee has valuated your car. Usually the trustee allows installment payments to be made. If you do not pay the trustee, the trustee may file a motion in court to sell your car at an auction.

 
On the other hand, if your car is being financed you can also deduct the amount you owe on the note to further reduce the equity of the car. An important point to note is that you are behind in your car payments, a Chapter 7 Bankruptcy will only stall the collection proceedings temporarily, and the finance company may file a motion to repossess your car. Unless you get current on your payments before you file, the financing company may eventually repossess your vehicle, unless your Attorney works out a payment arrangement. A Chapter 13 bankruptcy on the other hand is designed to allow you to pay off the prearrange over a period of time, usually 3-5 years; in that case you would get long term relief for your car payments with a Chapter 13.

 
To get a better handle on what you are entitled to with respect of Ohio law and the total motor vehicle exemption ceiling, talk to an attorney proficient in bankruptcy laws and processes; this would give you a clear idea of what the status of your car before you file for bankruptcy.

 
Summary
The blog explains when the trustee can “take” your car and how you can avoid that. It avers that it depends on the condition of your vehicle at the time you file the bankruptcy and the exemptions that come into play to protect that value.

 

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

Some Differences between Chapter 7 and a Chapter 13 Bankruptcies

There are two kinds of consumer Bankruptcies, Chapter 7 and Chapter 13s.

Chapter 7s deal primarily with discharging or wiping out ones unsecured debts.   These are debts where the creditor does not have any collateral, such as house or a car.  Unsecured debts include credit cards, medical bill and most private judgments, to name a few.  A Chapter 7 though will not help you to save your home if you are behind in your payments.

Chapter 13s, on the other hand, will help you if you are in foreclosure.  With these bankruptcies, your arrearage is paid off over a period of 3 to 5 years.  Also, in Chapter 13s, you do not eliminate your unsecured debts at one time, like with Chapter 7s,  but pay them off over time, sometimes pennies on the dollar.

Summary

Chapter 7s generally deal primarily with wiping out unsecured debts while Chapter 13s deal with saving your home or car if you are behind in your payments.

________________________________
Attorney Eli Tamkin is a Cleveland bankruptcy lawyer.  He has been practicing law since 1989 and in Cleveland Ohio since 1994. Since then, he has dealt with a variety of legal issues, including bankruptcy, real estate, divorce, personal injury, and probate. Many times, answering questions on bankruptcy draws on knowledge of other legal areas as well. His experience in these other areas, as well as in bankruptcy enables him to address your particular needs and to offer you advice that is applicable to your situation.

© 2018 Eli Tamkin | Cleveland Bankruptcy Lawyer | Cleveland Foreclosure Defense Lawyer | Legal Disclaimer | Site Map

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code as well as provide other representation.


The Law Offices of Eli Tamkin
850 Euclid Avenue, Suite 1021, Cleveland, OH 44114
(216) 333-1294-Tel | (866) 827-1288-Fax | emt@tamkinlaw.com