When a bankruptcy is filed, the automatic stay precludes creditors from proceeding in lawsuits against the debtor. If a bankruptcy is filed during a divorce case, the automatic stay applies to the divorce case as well.
The divorce Judge may proceed on issues of child support, alimony and custody of children, but may not make any decisions relating to the division of assets and debts without the permission of the bankruptcy court, and any decisions made by the divorce Judge are reviewable by the bankruptcy Judge.
Therefore, it is very important to consider the right timing of a bankruptcy and a divorce when a client will likely have to go through both process.
Filing Divorce First: Finishing the divorce action before beginning the bankruptcy filing allows the divorce action to proceed to its natural conclusion without interruption by the bankruptcy court. It is still possible, though, for the Bankruptcy Court to undo the Agreement or Judgment of the Divorce Court if it appears the parties were attempting to defraud creditors (for instance if all of the assets were transferred to the non-debtor spouse rather split equitably). Despite this risk, it is unlikely if the division is equitable that there would be any issue, and both cases would like proceed more smoothly one after the other, rather than simultaneously.
However, the debtor might be bound to make payments in the divorce case which could affect eligibility for bankruptcy, and might have made promises to divide property that is now an issue. Domestic Relations Orders are non-dischargeable in most cases and therefore the decisions made in a divorce settlement, will have significant impact on what can and can't be discharged in the bankruptcy. This is even further complicated by joint debts. It's therefore important to have bankruptcy counsel review a potential divorce settlement prior even if the intention is to complete the divorce case first.
Filing Bankruptcy First: Likewise, there are certain circumstances where it might make more sense to file for bankruptcy prior to filing the divorce. For instance in a case where both spouses had significant debt, they can file as joint debtors so long as they are still married.
Even if only one of the parties intended to file, there is a case which suggests that some of the protections for the debtor extend to the non-debtor spouse (protections that might not apply if the parties are already divorced).
The facts of each case will control whether it makes sense to file the bankruptcy or divorce first. If you are assisting a client with a divorce case but don't have expertise in bankruptcy we recommend reviewing your strategy with an attorney trained in bankruptcy. The terms of the proposed property settlement or transfers of property under the agreement may be hurtful to your bankruptcy case if your client plans on filing for bankruptcy shortly after the conclusion of the divorce matter. These issues are even more complicated when a Chapter 13 plan is in place, because a divorce can cause problems with making plan payments. Having an attorney that can explain the bankruptcy consequences of the decisions made during the divorce will be critical in helping your client get a fresh start.
Tuesday, March 5, 2013
Bankruptcy & Other Litigation: A Ten Part Series
The next ten posts will outline how bankruptcy cases can interact and may affect different types of litigation. In the following posts we will cover how a bankruptcy case can affect or be affected by these types of cases:
#1: Divorce
#2: Post-Divorce
#3: Collections - Plaintiff Bankruptcy
#4: Collections - Defendant Bankruptcy
#5: Evictions - Landlord Bankruptcy
#6: Evictions - Tenant Bankruptcy
#7: Foreclosures
#8: Personal Injury & Torts - Plaintiff Bankruptcy
#9: Personal Injury & Torts - Defendant Bankruptcy
#10: Criminal Cases
Tuesday, February 5, 2013
Expanding the Discussion about Your Freedoms
In the past, this blog has concentrated primarily on debt relief and bankruptcy. While you might not necessarily associate that subject with other fundamental freedoms, bankruptcy is one of the oldest laws in the United States, and was included in the original 1787 draft of the U.S. Constitution. In fact, the originating language is older than the Bill of Rights. The Founding Fathers recognized that a system of laws was necessary to protect the “honest but unfortunate debtor”, and such laws were in the general interest of the country and its citizens.
While we will continue to cover bankruptcy news and provide information about options for obtaining financial freedom, we will also begin including posts on this blog specific to other freedoms provided for by our Constitution and Bill of Rights. We hope that you continue to frequent our site for news about financial freedom, criminal defense rights and protections, and freedom from infringement on the individual right to bear firearms. We also invite you to leave your thoughts and join the debate in the comments section of our posts.
Many people are proud to stand up for, and take advantage of, their constitutional protections – and they should be. From its original incarnation and its amendments over the years, such protections have become the cornerstone of our society, our government and our way of life.
Tuesday, January 29, 2013
Translating the Second Amendment
As seen in the MetroWest Daily News:
Following the Newtown shooting, people asked for an open and honest discussion about firearms rights and gun control. This has inexorably led to discussions of the meaning and purpose of the Second Amendment. Until we can all at least understand the amendment’s purpose, fruitful discussion is impossible.
So, what does the amendment say? “A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”
Most of the controversy about the Second Amendments stems from the phrase “a well regulated militia”. Many take the position that a well-regulated militia is a military body bound by governmental restrictions, akin to the Armed Forces or the National Guard. However, at the end of the late 18th Century, the term “well regulated”, especially with respect to troops, is more accurately defined as “properly disciplined”. Also, it should be noted that, unlike today, there was no Federal standing army. The defense of the fledgling colonies fell to individual citizens – the people.
If we were to translate the text of the Second Amendment into modern American English: “A properly disciplined body of citizens is necessary for the security of the citizens of a free Country. Therefore, the right of the people to possess and use firearms shall not be infringed.”
Today, the “security of the free state” is maintained by one of the largest professional military organizations in the world. Still, the Supreme Court has recognized the relevance of the Second Amendment. In 2008 and 2010, the Supreme Court issued two landmark decisions officially establishing individuals' rights to possess firearms and employ them for lawful purposes. In District of Columbia v. Heller, the Court ruled that the Second Amendment protects an individual's right to possess a firearm, unconnected to service in a militia, and to use that arm for traditionally lawful purposes, such as self-defense within the home. In McDonald v. Chicago, the Court ruled that the Second Amendment limits state and local governments to the same extent that it limits the federal government. Nevertheless, the Supreme Court has ruled that the modern Second Amendment is not absolute, and holds that some restrictions on firearms are consistent with the Constitution.
Still, I think the Court missed the mark by focusing primarily on personal protection and “militia service”. While certain limitations have practical import, the drafters of the constitution did not intend the amendment to protect an individual’s ability to defend his hearth and home against vagabonds, delinquents and criminals. The founding fathers did not have the Wild West in mind – they feared a much more powerful enemy. The Second Amendment’s purpose is very sobering, very heavy and very real: It is to ensure that the governed have a way to forcibly limit the actions of those who govern them. It is an implicit challenge which states that if representative politics fail, the people still hold the power to exert their collective will on a corrupt or tyrannical governing body. The Second Amendment as it was written never contemplated the rights of sportsmen, hunters, or the potential victim of a crime.
We should not view the importance of the Second Amendment as a partisan political issue. The question is not “should people be allowed to have guns”, but rather “should the people have the ability to protect themselves from an oppressive government”. This cornerstone right protects individuals hailing from all sides of the political divide.
We all want to limit crime, protect our children and protect ourselves. But, we need to be cautious – a knee-jerk reaction to address incidents like Newtown will have long-term and detrimental consequences to all our collective rights. After 9/11, many people responded out of fear and anger, calling on the government to ensure that something like that would “never happen again”. What it got us, though, was a systematic gutting of other rights, liberties and privacy in the interest of safety. We need to ask ourselves if we are willing to go down that road again.
In 221 years since the Second Amendment was ratified, we have thankfully never needed to implement its true purpose, and I hope that we never do. Still, it doesn’t mean it is not important and worth saving.
Following the Newtown shooting, people asked for an open and honest discussion about firearms rights and gun control. This has inexorably led to discussions of the meaning and purpose of the Second Amendment. Until we can all at least understand the amendment’s purpose, fruitful discussion is impossible.
So, what does the amendment say? “A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.”
Most of the controversy about the Second Amendments stems from the phrase “a well regulated militia”. Many take the position that a well-regulated militia is a military body bound by governmental restrictions, akin to the Armed Forces or the National Guard. However, at the end of the late 18th Century, the term “well regulated”, especially with respect to troops, is more accurately defined as “properly disciplined”. Also, it should be noted that, unlike today, there was no Federal standing army. The defense of the fledgling colonies fell to individual citizens – the people.
If we were to translate the text of the Second Amendment into modern American English: “A properly disciplined body of citizens is necessary for the security of the citizens of a free Country. Therefore, the right of the people to possess and use firearms shall not be infringed.”
Today, the “security of the free state” is maintained by one of the largest professional military organizations in the world. Still, the Supreme Court has recognized the relevance of the Second Amendment. In 2008 and 2010, the Supreme Court issued two landmark decisions officially establishing individuals' rights to possess firearms and employ them for lawful purposes. In District of Columbia v. Heller, the Court ruled that the Second Amendment protects an individual's right to possess a firearm, unconnected to service in a militia, and to use that arm for traditionally lawful purposes, such as self-defense within the home. In McDonald v. Chicago, the Court ruled that the Second Amendment limits state and local governments to the same extent that it limits the federal government. Nevertheless, the Supreme Court has ruled that the modern Second Amendment is not absolute, and holds that some restrictions on firearms are consistent with the Constitution.
Still, I think the Court missed the mark by focusing primarily on personal protection and “militia service”. While certain limitations have practical import, the drafters of the constitution did not intend the amendment to protect an individual’s ability to defend his hearth and home against vagabonds, delinquents and criminals. The founding fathers did not have the Wild West in mind – they feared a much more powerful enemy. The Second Amendment’s purpose is very sobering, very heavy and very real: It is to ensure that the governed have a way to forcibly limit the actions of those who govern them. It is an implicit challenge which states that if representative politics fail, the people still hold the power to exert their collective will on a corrupt or tyrannical governing body. The Second Amendment as it was written never contemplated the rights of sportsmen, hunters, or the potential victim of a crime.
We should not view the importance of the Second Amendment as a partisan political issue. The question is not “should people be allowed to have guns”, but rather “should the people have the ability to protect themselves from an oppressive government”. This cornerstone right protects individuals hailing from all sides of the political divide.
We all want to limit crime, protect our children and protect ourselves. But, we need to be cautious – a knee-jerk reaction to address incidents like Newtown will have long-term and detrimental consequences to all our collective rights. After 9/11, many people responded out of fear and anger, calling on the government to ensure that something like that would “never happen again”. What it got us, though, was a systematic gutting of other rights, liberties and privacy in the interest of safety. We need to ask ourselves if we are willing to go down that road again.
In 221 years since the Second Amendment was ratified, we have thankfully never needed to implement its true purpose, and I hope that we never do. Still, it doesn’t mean it is not important and worth saving.
Friday, December 21, 2012
The Mayans were Wrong... Now what?
I woke up this morning, and noticed the sun had, in fact,
come up.
Once I had finished a cup of coffee, I realized that my back
yard had not been converted into a smoking hole in the ground, nor had my house
been swallowed by an earthquake. The earth appeared to be, for the most
part, still here. A brief check of the news and various social media
sites confirmed what I had already suspected...the world did not end on
December 21, 2012.
The news might not be so good for everyone, though. Over
the past year, I had heard anecdotal reports that some people who
believed that the Mayans accurately predicted that the end of the world on December 21, 2012 have maxed out credit cards and incurred large
amount of debt under the belief that they would not have to repay. Essentially
they were counting on cosmic happenstance to intervene as a sort of galactic loan forgiveness program.
Wishful thinking, perhaps.
Then again, the reason others are struggling with debt they
cannot afford to pay may be a bit more grounded: the loss of a job, persistent
unemployment, medical expenses, foreclosure, poor spending
habits, etc. Whatever the case, Kelsey & Trask, P.C. stands
ready to help. To schedule a consultation with an attorney to address
bankruptcy or debt relief, call 508.655.5980.
Friday, December 7, 2012
New Figures for Median Family Income Released
It's time for our bi-annual median family income update again. The United States Department of Justice twice per year releases new Median Family income figures for each state and territory. These figures are used to calculate a debtor's eligibility to file for bankruptcy under Chapter 7 of the Bankruptcy Code. If your income is greater than the median income for your state of residence and family size, you many not be able to file a Chapter 7 bankruptcy case.
The Means Test calculation compares your average monthly income (as calculated over the last six (6) months) to the median family income in your state for a household of your size. If your average monthly income is lower than the median family income for your state of residence and family size, then you meet the means test and there is a presumption that you may file for Chapter 7 relief.
The Median Family Income for Massachusetts as of May 1, 2012 were as follows:
Family size 1: $55,185 per year
Family size 2: $66,200 per year
Family size 3: $82,873 per year
Family size 4: $102,194 per year
add an additional $7,500 per year for each additional household member.
These figures went down slightly in each category from these figures.
The Median Family Income for Massachusetts as of November 1, 2012 are as follows:
Family size 1: $54,475 per year
Family size 2: $66,076 per year
Family size 3: $80,822 per year
Family size 4: $101,523 per year
add an additional $7,500 per year for each additional household member.
If your income is greater than the median income for your state of residence and family size, you still might meet part (b) of the means test after taking into consideration certain expenses as defined by the Bankruptcy Code and other deductions, including regular charitable donations (up to 15% of your income), school expenses, payments on 401(k)/IRA loans, and health Insurance. If you are subject to this calculation an attorney can help you perform this task.
Click here to learn more about The Means Test or use our Means Test Calculator.
To have an attorney help you with these calculations call 508.655.5980 to schedule a consultation or e-mail us here.
The Means Test calculation compares your average monthly income (as calculated over the last six (6) months) to the median family income in your state for a household of your size. If your average monthly income is lower than the median family income for your state of residence and family size, then you meet the means test and there is a presumption that you may file for Chapter 7 relief.
The Median Family Income for Massachusetts as of May 1, 2012 were as follows:
Family size 1: $55,185 per year
Family size 2: $66,200 per year
Family size 3: $82,873 per year
Family size 4: $102,194 per year
add an additional $7,500 per year for each additional household member.
These figures went down slightly in each category from these figures.
The Median Family Income for Massachusetts as of November 1, 2012 are as follows:
Family size 1: $54,475 per year
Family size 2: $66,076 per year
Family size 3: $80,822 per year
Family size 4: $101,523 per year
add an additional $7,500 per year for each additional household member.
If your income is greater than the median income for your state of residence and family size, you still might meet part (b) of the means test after taking into consideration certain expenses as defined by the Bankruptcy Code and other deductions, including regular charitable donations (up to 15% of your income), school expenses, payments on 401(k)/IRA loans, and health Insurance. If you are subject to this calculation an attorney can help you perform this task.
Click here to learn more about The Means Test or use our Means Test Calculator.
To have an attorney help you with these calculations call 508.655.5980 to schedule a consultation or e-mail us here.
Tuesday, November 20, 2012
Bankruptcy and Student Loans: Another Infographic
The infographic below provides a summary of the student loan debt problem and the limitations of the current bankruptcy law to resolve that problem. For a more in depth review of these issues see our previous post: Can bankruptcy help with my student loans?.
From: OnlineColleges.net
Reprinted from OnlineColleges.net.
Kelsey & Trask, P.C. provides this graphic for informational purposes only. We do not endorse nor claim endorsement from the source site or organization. Kelsey & Trask, P.C. is not responsible for any information contained therein, unless indicated specifically on that site.
From: OnlineColleges.net
Reprinted from OnlineColleges.net.
Kelsey & Trask, P.C. provides this graphic for informational purposes only. We do not endorse nor claim endorsement from the source site or organization. Kelsey & Trask, P.C. is not responsible for any information contained therein, unless indicated specifically on that site.
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