Articles Tagged with IRA

Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What is Chapter 11 Bankruptcy?”

 

Though most people have heard of Chapter 7 bankruptcies (known as liquidation bankruptcy) and Chapter 13s (used to restructure debts), Chapter 12 bankruptcies are far less common. To find out more about what a Chapter 12 bankruptcy is and how it is used, keep reading.

 

Number 12 sign Charlotte Chapter 12 Bankruptcy Lawyer North Carolina Debt AttorneyWhat is a Chapter 12 bankruptcy?

 

Chapter 12 is actually one of the newer categories of bankruptcy and was only formally made permanent in 2005. Chapter 12 is used specifically for family farmers and family fishermen. Chapter 12 is similar to a Chapter 13 in that it allows the restructuring of a person’s debts to avoid liquidation or foreclosure.

 

Who is eligible for a Chapter 12 bankruptcy?

 

Very few debtors are actually eligible to file Chapter 12 bankruptcy and in 2011, the most recent year that numbers have been made available, only 630 of the overall 1.4 million bankruptcies filed in the U.S. were for Chapter 12 cases.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Does Bankruptcy stop foreclosure?”

 

One of the things most people considering filing for bankruptcy are confused by and concerned with is the meeting of creditors. The name can seem ominous, implying that the debtor is placed on a chair in the center of the room and then picked apart by angry lenders. The reality is, thankfully, far more boring.

 

contemplating woman Charlotte Debt Attorney North Carolina Bankruptcy LawyerWhen does the first meeting of creditors happen?

 

Once you officially file for bankruptcy you will receive a notice from the bankruptcy court informing you that the case has begun. This letter will typically appear about a week after you first file. In the letter, the date and time for the first meeting of creditors will be found. The meeting itself is usually scheduled a few weeks after the letter is delivered, ensuring that the process moves along at a relatively fast pace.

 

What is the meeting about?

 

The meeting of creditors is also known as a 341(a) meeting and it exists so that the bankruptcy court trustee, as well as your creditors, receive an opportunity to ask you questions under oath. This allows creditors to get a more complete understanding of your overall financial picture and clear up any confusion that may exist regarding your bankruptcy filings.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Are my 401k and IRA protected in bankruptcy?”

 

The Supreme Court recently made waves in the bankruptcy world when it released an opinion in Clark v. Rameker, a case concerning the exemption for inherited IRAs. In Clark, the justices agreed unanimously that the inherited IRA Ms. Clark received from her mother was not eligible for protection from creditors.

 

Supreme Court 2 Charlotte Debt Lawyer North Carolina Bankruptcy Law FirmThe case began back in 2010, when the Clarks filed for Chapter 7 bankruptcy. Ten years before filing, Ms. Clark had received the IRA from the estate of her deceased mother. At the time of the bankruptcy filing, Ms. Clark and her husband listed the IRA as an asset, valued at around $300,000, but said that it was exempt from the overall bankruptcy estate. The couple argued that the money should be protected against claims by creditors, something that the trustee disagreed with.

 

The bankruptcy trustee overseeing the case, as well as the Clarks’ creditors, fought the couple over the claimed exemption. The creditors argued that because the money was not the actual retirement money of Ms. Clark it should not be exempted under the usual retirement fund heading.

 

The case eventually made its way to the Supreme Court where Justice Sonia Sotomayor pointed out several ways in which the inherited IRA differs from a person’s personal IRA savings. The Court noted that in traditional IRAs, a person can continue to invest money in the account, whereas those with inherited IRAs cannot. Most importantly, those who hold inherited IRAs are allowed to withdraw any or all of the money in the account for any reason without ever incurring a penalty. Those with traditional IRAs face a 10 percent penalty for early withdrawals.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I get credit after filing personal bankruptcy?”

 

A recent article on CNBC discussed the issue of increasingly pricey prescription drug bills and how the escalating costs associated with treating illness can drive families into bankruptcy.

 

Prescription bottle Charlotte Bankruptcy Attorney North Carolina Chapter 11 LawyerThe report noted that in 2013, Americans forked over more than $41 billion in unreimbursed prescription drug costs. This number has continued a steady march upwards and is reaching levels that are impacting the financial health of some homes. The reality is that many insurance plans today carry not only steep monthly premiums, but large annual deductibles that must first be hit before coverage kicks in, putting those families with low incomes in trouble.

 

One bankruptcy attorney interviewed in the article noted that half of his clients have medical-related debts. In other cases, experts say that a person’s debt may appear to have nothing to do with medical expenses, for instance, it may be exclusively on credit cards. However, this usually is because the family chose to use their cards to pay for living expenses after their income went towards prescription drug bills.

 

Sadly, the implementation of the new Affordable Care Act appears to have done little to solve the problem. Those with chronic health conditions must still pay large monthly premiums and contend with potentially thousands of dollars in annual deductibles. Additionally, a lack of knowledge surrounding the confusing insurance plans and their offerings make it even more difficult for consumers to understand how best to minimize medication costs.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Do I need an attorney to file bankruptcy?”

 

Though it’s not something many people think about, filing bankruptcy can have an important impact on whether you get to see your yearly tax refund. As a result, timing your filing can matter a great deal, a decision that could cost you potentially hundreds or thousands of dollars.

 

Tax sign Charlotte Bankruptcy Lawyer North Carolina Tax Debt AttorneyChapter 13

 

In the case of a Chapter 13 bankruptcy, the money you receive from a tax refund will almost always need to be turned over for payment to your creditors. This is because the tax refund is viewed as disposable income and will be considered surplus money that will almost always be paid into your bankruptcy plan.

 

The only exception is if you are able to excuse a tax refund from your repayment plan. To do this you’ll need to file a request with the bankruptcy trustee and explain why the money should be excused. Usually this will only be allowed in cases where you need the money to pay for something unexpected.

 

What issues are at play?

 

Whether a person gets to keep his or her tax refund when filing for a Chapter 7 bankruptcy depends on several factors: 1) the amount of the overall refund, 2) any bankruptcy exemptions and 3) when the case is filed.

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Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “Can I get rid of student loans by declaring bankruptcy?”

Debtor Prison Charlotte Bankruptcy Lawyer North Carolina Chapter 7 AttorneyIn 2009, to much fanfare from consumer advocates, then-Gov. Beverly Perdue signed North Carolina’s Consumer Protection Act into law. A year later, Pres. Obama signed the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act into law. The Dodd-Frank Act created a new federal agency called the Consumer Financial Protection Bureau.

The goal of the new legislation – passed in the wake of the 2008 financial crisis – was to both inform and protect consumers. In addition, the federal agency was tasked with enforcing federal consumer financial laws against banks, credit unions and other financial institutions. The North Carolina Department of Justice likewise employs consumer protection experts who “fight unfair business practices like scams and frauds” at the state level.

Consumers may have been unaware that prior to the passage of these acts, the N.C. General Statutes already provided causes of action designed to make shady collection agencies pay. Chapter 58 of the general statutes prohibits collection agencies from engaging in a number of practices, including making certain threats, publicizing a consumer’s debt to third parties for the purpose of shaming the consumer, calling the consumer repeatedly before or after business hours, and a number of other unreasonable, deceptive and unfair practices.

In 2010, a Durham woman named Virginia Simmons disputed and refused to pay a bill from Home Design Studio, LLC. Home Design engaged a collection agency to collect a debt from her. The parties settled their dispute on June 3, 2011, but Kross, Lieberman & Stone, Inc., the collection agency, continued to contact Simmons in an effort to collect the Home Design debt.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Do I need an attorney to file bankruptcy?”

 

If you are considering filing for a Chapter 13 bankruptcy you might have heard the term “cramdown” bandied about and may be understandably curious about what it could refer to. Keep reading to find out what cramdowns are and how they work.

 

Sticky Note Question Mark Charlotte Chapter 13 Lawyer North Carolina Bankruptcy AttorneyWhat is a cramdown?

 

Cramdown refers to the act of reducing the principal balance of a debt to reflect the actual value of the underlying property. For example, a car that you owe $15,000 on may actually only be worth $10,000. By using a cramdown, you can have the debt decreased to the value of the property, saving you substantial amounts on certain items.

 

How does a cramdown work?

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “What are the pros and cons of bankruptcy?”

 

We have discussed unsecured debts and what happens to these unsecured debts when a person files for bankruptcy protection. But what about secured debts, those attached to items of personal property. In many cases these loans include liens against the underlying property, something that can impact what happens to the items during the bankruptcy process. To find out more about what happens to items that have liens during a bankruptcy, keep reading.

 

Money Mousetrap Charlotte Bankruptcy Lawyer North Carolina Lien AttorneyWhat is a lien?

 

Liens are notices that let the world know you owe someone money. Liens are usually public records that are filed with either local or state level officials. Liens are commonly used for real property such as homes or land, but are not as common for items of personal property like cars or boats.

 

It’s important to understand that liens are not loans, though the two are related. A loan is just money given to you with a promise to repay that money with interest. A lien is the way that a lender protects his or her interest in that loan. A lien gives the lender a legal right to take back the item of property (either through repossession or foreclosure) if you do not pay under the terms of the loan contract.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Can I get rid of student loans by declaring bankruptcy?”

 

Those considering filing for bankruptcy protection often feel led to do so after being inundated with calls by credit card companies, medical bill collectors and others coming after your unsecured debts. A common question is whether these unsecured debts can actually be wiped out by filing for bankruptcy. To find out more, keep reading.

 

Boxing Glove Charlotte Bankruptcy Lawyer North Carolina Debt AttorneyWhat is unsecured debt?

 

First things first, it is important to understand exactly what unsecured debt is (and what it is not). At it’s most basic level, unsecured debts are those that are not tied to any physical property, meaning they are not secured by some tangible object. Secured debts include things like mortgages or car payments, which are tied directly to another object that can be taken by lender in the event that payments fall behind.

 

Unsecured loans include things like credit card debt, store cards, gas cards and medical bills. These debts are entered into without collateral and lenders have no property that they can seize should payments fall behind schedule. Other examples include things like student loans, child support arrearages and alimony.

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Charlotte Bankruptcy attorney Bryan W. Stone answers the question: “Do I need an attorney to file bankruptcy?”

 

Anyone considering filing for bankruptcy should know that the fees everyone is required to pay are scheduled to rise. As of June 1, 2014, the fees paid for those filing for Chapter 7 and Chapter 13 bankruptcy are going to climb across the country, including here in North Carolina.

 

Increasing Bar Graph Charlotte Bankruptcy Attorney North Carolina Debt LawyerThe new fees were announced by the Judicial Conference of the United States and now appear on the revised Bankruptcy Court Miscellaneous Fee Schedule. The increase will be in the form of an additional administrative fee that will be assessed to every bankruptcy case.

 

The new fees will increase the cost of filing for a Chapter 7 bankruptcy from the current $306 figure ($245 filing fee, $46 administrative fee and a $15 trustee surcharge) to $335 ($245 filing fee, $75 administrative fee, $15 trustee surcharge). Similarly, the cost of filing a Chapter 13 bankruptcy will rise from $281 to $310, largely due to an increase in the administrative fees.

 

Even steeper is the increase in prices for Chapter 9, Chapter 15 and the more common Chapter 11 bankruptcies. Currently, debtors can expect to pay $1,213 to file. In less than a week, this will jump to $1,717, an increase of more than $500, or nearly 40 percent.

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