Wednesday, February 24, 2010

If my ex-spouse files for Bankruptcy, can they discharge support they owe?

Under the current Bankruptcy Code, a debtor who files a Chapter 7 bankruptcy will not receive a discharge from debts defined in paragraph 5 of 11 U.S.C. § 523(a) as "domestic support obligations" or debts under 11 U.S.C. § 523(a)(15) owed "to a spouse, former spouse, or child of the debtor and not of the kind described in paragraph (5) that is incurred by the debtor in the course of a divorce or separation or in connection with a separation agreement, divorce decree or other order of a court of record, or a determination made in accordance with State or territorial law by a governmental unit."

"Domestic support obligations" are defined by 11 U.S.C. § 101(14A) as debts "in the nature of alimony, maintenance, or support" owed to a spouse, former spouse, or child.

These limitations on dischargability therefore apply to both child support and alimony, as well as other potential obligations under a divorce decree, such as agreements to pay joint debts or obligation to pay an ex-spouses attorney fees.

If your ex-spouse does file for bankruptcy, you may need to file responsive pleadings and argue this issue in front of a Judge if the debtor seeks to discharge the debt. If you fail to dispute the discharge, that could result in the debt being discharged. Though this is very unlikely, if you are not sure how to protect your rights you should consult with an attorney.

Thursday, February 11, 2010

When and how do I make Chapter 13 Plan Payments?

The first Chapter 13 Plan payment is due on or before the Section 341 Creditors Meeting and every month thereafter for 36 or 60 months depending on your plan. Most debtors just bring the first payment to the 341 meeting. The payments are made payable to your Trustee, who will provide you with directions at the 341 meeting on where to send your further payments. Plan payments must be made by bank check and not personal check.

Monday, February 8, 2010

What should I expect at the initial consultation meeting?

The initial office visit is intended to acquaint you with basic information about bankruptcy and to assess your current financial situation in order to determine your need and eligibility for the filing of a bankruptcy case.

This will include information about the types of bankruptcy provided by each of the Chapters and how each Chapter works, what types of debts can be forgiven, what property you can keep, what debts you need to keep paying, how to value property in bankruptcy and how to complete the petition, forms, plans, schedules of property, and schedules of your debts. As part of this process, Kelsey & Trask, P.C. will evaluate your financial situation to determine your need and eligibility for the filing of a bankruptcy case.

To schedule a One Hour Initial Consultation Click Here.

Monday, February 1, 2010

What are Exemptions in Bankruptcy and do I have a choice of Exemptions?

When filing for Bankruptcy certain property of the debtor is exempt from the Bankruptcy estate, which means that it is not subject to being taken by the Trustee and used to pay your debts. In simpler language, exempt property is property you get to keep.

When filing a Bankruptcy as a resident of Massachusetts you can choose to use the exemptions allowed under either State or Federal law, but you must choose one or the other.

There are many exemptions that are similar under both schemes, such as the exemption of most qualified retirement plans. The most significant difference is that under the Federal exemptions you are only allowed to exempt approximately $20,200 in primary residence equity, while under the Massachusetts exemptions you can exempt up to $500,000 in primary residence equity (assuming you have filed a valid Declaration of Homestead). This can be of significant importance if you are trying to stay in your home.

The exact amounts of exemptions are subject to change and you should consult with an attorney to obtain the most current figures and to decide which option you should choose.

UPDATE: The Massachusetts Exemptions have recently changed. For more information read our post on the changes: New Massachusetts Property Exemptions: The Return of 2 Cows, 12 Sheep and 2 Swine.

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