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The long and short answer to that is yes.  Although you may surrender your property in bankruptcy, you are still the owner of that property until the foreclosure and recording of the deed.  The bankruptcy simple means that you are no longer obligated to pay the mortgage.  However, you are still liable for anything that happens on the property.  You need to protect yourself and others during the foreclosure process. 

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As of May 1, 2012, the Federal U.S. Trustee is updating their means test household income numbers for New Hampshire and Massachusetts.  The new numbers are slightly higher for both states and is good news for potential Chapter 7 filers.  An individual can earn a little bit more money and still qualify for Chapter 7.

In Massachusetts:

Family Size:       1                          2                                3                            4

$55,185                $66,200                $82,873          $102,194

In New Hampshire:

$53,177                  $63,626                $81,854          $94,646

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Section 525(b) prohibits an employer from firing a debtor SOLELY for filing bankruptcy.  Of course, a savy employer will argue that the firing was not solely because of the bankruptcy.  In that situation, it's likely that litigation in the bankruptcy court will follow.

A typical scenario is one in which the debtor is employed at a bank, and the employee has a loan at that bank.  Once the petition is filed, the bank, who is also the employer, can no longer request the loan amount from the employee and ultimately that the bank's loan will be discharged. This can create a situation where the bank decides to simply fire the employee.  Many employers are not well versed in the bankruptcy code and do not realize that it is illegal to fire the employee because of the bankruptcy. 

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Posted by on in Criminal Defense

An interlock device is a mechanism installed on your car that requires you to provide a breathe sample before the car with start.  It also requires the operated to provide a breathe sample at differing intervals.  An interlock device is typically not required on a DUI First Offense.  However, if you are convicted of an Aggravated DUI an interlock device is required by statute. 

Tagged in: dui interlock
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The Supreme Court recently held in Ransom v. FIA Card Services that when calculating disposable monthly income a debtor cannot include an ownership expense deduction on the means test when the car is owned free and clear.  A debtor's disposable monthly income is calculated by averaging the prior 6 months of the debtor's income and subtracting out expenses.  The ownership expense is one of the deductions available to a chapter 13 debtor when calculation disposable income. An interesting result of this holding is that it almost entices a debtor to purchase a car with a payment before filing a chapter 13 so that the ownership expense can be included.  Obviously, incurring debt in anticipation of filing for bankruptcy is illegal, but this holding may result in unintended consequences. 

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When drafting a chapter 13 bankruptcy petition, projected disposable income is determined using the mechanical approach found in the Bankruptcy Code.  However, the Court in In Re Lanning held that in certain cases the mechanical approach must be modified to account for the financial reality of the debtor.  For example, the means test utilizes a 6 month look back period, but let's say that in our example the debtor was laid off in month 5:

Month 1: 4000

Month 2: 4000

Month 3: 4000

Month 4: 4000

Month 5: 3000

Month 6: 0

According to the means test, this debtor's monthly income is 3167.  However, in reality the debtor's current monthly income is zero.  To alleviate this absurd result, the Court adopted a looking forward result. If the debtor has faced a known changed in circumstances, the proposed Chapter 13 Plan can use the numbers generated in Schedules I and J.  In the case where the Trustee objects, the debtor will have to show why Schedules I and J are more accurate number.

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Posted by on in Blog

http://news.yahoo.com/blogs/sideshow/man-saws-off-own-foot-continue-receiving-unemployment-211222700.html

An unemployed Austrian man cut off his own foot with a mitre saw so he could continue receiving jobless benefits.

Hans Url, a 56-year-old from Mitterlabill, then took the foot and cooked it in the oven so doctors could not reattach it.

Url was airlifted to a hospital in Graz, where he was put in an artificial coma so doctors could stabilize him.

"The foot was too badly burned to reattach," a hospital spokesman said. "All we could do was seal the wound. He had lost a lot of blood--he almost died on the way to hospital."

According to the Austrian Times, Url had complained before the incident that he was too sick to work and "didn't like the work he was offered."

The kicker: according to the paper, being footless does not necessarily qualify Url for unemployment compensation.

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As many of you are aware, google, and now other search engines, uses an autocomplete. Meaning, as you type in your search results it automatically gives you the best answer. For a person who has the same name as someone convicted of a crime, that can be a problem.

http://news.yahoo.com/man-wins-injunction-against-google-claiming-auto-complete-125806868.html

"

It’s not just a couple of pages either, as he says by choosing one of the options returns at least 10,000 individual results.

Having been turned down by Google after requesting the terms be removed, the man, who has not been named, sought an injunction against the search giant through the Japanese courts.

This isn’t all about vanity either, as his lawyer claims the man lost his job and been turned down for others due to the search results, presumably after potential employers performed the almost de rigueur Google check before extending an offer."

The Tokyo court granted the injunction. An injunction is an order by the court for a person or company to either do something, or to prohibit someone from doing something in the future. "Google has refused to comply with the order, and according to the Japan Times, has said it “will not be regulated by Japanese law” and that “the case does not warrant deleting the auto-complete suggestions.”

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Posted by on in Bankruptcy

A question that some of my clients have is whether or not they can continue to send there children to private school and file a chapter 13 bankruptcy.  Private school for minor children can present a problem in bankruptcy.  When your bankruptcy petition is being completed you must list all of your expenses.  Obviously tuition is a real expense that you incur; however, the bankruptcy code mandates that the expense be reasonable and necessary.

The question then becomes, is private school tuition a reasonable and necessary expense?  Most circuits have found that it is not, unless the debtor can demonstrate why it is.  The fact of the matter is that debtor's already pay for school through their property taxes.  And if they are renters, through their rental payments.  When children are sent to private school, the debtor is paying for their child's education twice. However, a debtor can rebut the presumption that the private school is unnecessary.   Typically, this can be shown because the child requires special education.  Public schools are not designed to handle all special needs children, and a private school may be able to provide a more appropriate setting.  Most courts have found that religious instruction is NOT a special need that requires private school.

If you have questions, consult a local New Hampshire bankruptcy attorney.

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The answer to that question, at least in the Fifth Circuit, is yes.   In Chilton, the debtors had inherited an IRA worth 170k from the husband's mother. In Re Chilton ___ Fd.3d____2012 U.S. App. LEXIS 4140 (5th  Cir. 2012).  The Chiltons exempted the IRA under 11 U.S.C. 522(d)(12).  The Trustee objected arguing that Inherited IRAs do not qualify for exemption under that bankruptcy code section.

The Bankruptcy Court agreed with the Trustee that inherited IRAs do not qualify for the 522(d)(12) exemption.  The Chiltons appealed that ruling and the Chiltons prevailed in District Court.  The ruling was once again appealed, this time by the Trustee, and  the Court of Appeals for the Fifth District affirmed the lower court and held that the funds are exempt.  In coming to that conclusion, the Court applied a two part test to determine whether or not the IRA qualified for the exemption.  First the amount that the debtor seeks must be retirement funds, and second those funds must be in an account exempt from taxation.

Since retirement fund is not defined in the bankruptcy code the Appellate Court looked to the plain meaning of the words.  The Court also looked to its sister courts for instruction on how retirement fund had beeen interpreted.    Ultimately, the Court found that an inherited IRA was a retirement fund.  Next the Court had to decide whether or not the account was exempt from taxation.  It held that according to Section 408 of the IRC the account was exempt from taxation.

Consult a local bankruptcy attorney

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A chapter 7 or chapter 13 bankruptcy discharge covers all debts except those specifically excluded in the bankruptcy code.   Section 523(a) of the bankruptcy code outlines the debts that are not dischargeable.  Here are a few examples of nondischargeable debts:

-Certain taxes

-Debts not listed in the debtor's schedules

-Most debts for alimony and child support

-Most student loans

-Debts that are reaffirmed

-Certain types of fraud

This list is by no means exhaustive, but it is a starting point for nondischargeable debts. 

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Posted by on in Bankruptcy

A chapter 13 bankruptcy is very similar to a chapter 7 bankruptcy.  However, a chapter 13 requires a debtor to file a repayment program.  Chapter 13 bankruptcy is available to those people with regular income.  The income can be in the form of wages, investment/rental property and even government benefits. One other difference between a chapter 7 and chapter 13 is that a chapter 13 has debt limits.  There are no debt limits in chapter 7.  The current debt limits for chapter 13 are $360,475 of unsecured debt and $1,081,400 of secured debt.  Section 109(e) of the bankrutpcy code prohibits use of chapter 13 for individuals with debts that exceed these limits. 

Consult a local New Hampshire attorney to explore your options

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Posted by on in Estate Planning

A Health Care Proxy or a Medical Power of Attorney is an important part of your estate planning portfolio.  In the event of your disability or incapacity, which renders you unable to make medical decision, a Health Care Proxy will allow a loved one to make medical decision on your behalf.  A prudent decision is to couple your Health Care Proxy with a living will that details your health wishes. 

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Posted by on in Bankruptcy

For various reasons, it may become necessary to have your bankruptcy case dismissed.  Is this possible?  In a chapter 13 bankruptcy, the easy answer is yes.  In a chapter 7 bankruptcy, however, probably not.  Section 1307(b) permits a debtor to file a motion to voluntarily dismiss his bankruptcy.  A motion to voluntarily dismiss your bankruptcy case can be granted over the objection of creditors.  However, once your case is dismissed, the automatic stay is no longer in place and creditors are free to pursue collections actions against.

The chapter 7 bankruptcy is a different animal.  Section 707 grants a bankruptcy judge the authority to dismiss your case, but unlike 1307 it is extremely discretionary.  The judge will weigh fairness, best interest of the debtor, and harm to creditors.  In a case where the entire bankruptcy estate is exempt, you have a shot at getting it dismissed.  However, if unaccounted for equity is discovered by the trustee during the course of the bankruptcy, you will have a much steeper hill to climb.

As always consult an experienced bankruptcy attorney

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Posted by on in Bankruptcy

The Fair Credit Reporting Act permits bankruptcy filings to remain on a debtor's report for 10 years from the date of the petition.  However, the three major credit reporting agencies Equifax, Transunion, and Experian typically report the filing for seven years. 

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My attorney told me that the prosecutor is offering to place my charge on file without a finding.  What does that mean?  In the State of New Hampshire, that means that you are not convicted of the crime but the charge will be continued for a certain period of time.  Typically the charge will be continued for 1 year good behavoir.  That means no further illegal conduct, and counseling and whatever else the prosecutor asks for.  At the end of the period, the charge is dropped.  Please note however that the arrest will see be on your record.

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Posted by on in Bankruptcy

The small business failure rate is around 36% in New Hampshire.  If a small business owner is facing a situation where expenses are greater than income, then bankruptcy might be an option.  But what bankruptcy?  The two main business bankruptcies are Chapter 11 and Chapter 7.  A Chapter 11 is a business reorganization and can be expensive and take years to complete.  A Chapter 7 is a liquidation.  For most small businesses, a Chapter 7 is better choice.  You can liquidate your debts and the Chapter 7 Trustee will liquidate the remaining assets to satisfy creditors' claims.

If you are in this situation, consult an experienced bankruptcy attorney.

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In MA, the short answer is yes.  Let's say you own a house that has a fair market value of $250,000 but is encumbered by a first mortgage in the amount of $270,000.  Even though the property has negative equity to the tune of $20,000, you should still include the homestead exemption on Schedule C.  The exemption refers to what the debtor would be entitled to and not what the debtor can actually exempt.  The $500,000 is the value of the homestead exemption in MA and it is proper to list that exemption on Schedule C. 

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Posted by on in Bankruptcy

Section 343 of the Bankruptcy code mandates that all debtor's submit to examination under oath at the meeting of creditors under section 341. The Bankruptcy code has no waiver provision.  So then what happens if a debtor files and is a military member or is mentally incapacited?  Although there is no waiver, a debtor may be able to participate in a telephonic 341.  The first step should be contacting the Trustee's and how to request a telephonic 341.  I should note, however, that a telephonic is extremely rare and just because you request one does not mean it will be granted.

As always it is best to consult a local bankruptcy attorney.

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As tax season is around the corner, an interesting question is, "are tax refunds from 2011 considered property of the estate?"  The answer to that question is, yes.  Your (anticipated) tax refund should be included in Schedule B, and in most cases, it can be wholly exempted.

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