Archive for February, 2016

Increased Thresholds for the “Presumption of Fraud”

Because of modest changes in the “presumption of fraud” creditors will be a little less likely to challenge the writing off of recent uses of credit.   As of April 1, 2016 creditors will have slightly harder time showing that recent credit purchases or cash advances were fraudulent and so can’t be written off (“discharged”) in bankruptcy. That’s because to qualify for a “presumption of fraud,” creditors will need to have a higher dollar amount threshold before that presumption kicks in. The “presumption of fraud” makes it easier for a creditor to object to the discharge of a debt. With the…

The Increasing Federal Exemptions

The federal exemptions are nudging up on April 1. That mostly doesn’t matter in Utah because we can’t use them anyway. Learn here why  not.   

States with Access to the Federal Exemptions

This blog post may seem like it’s not for everyone. It mostly affects the residents of 19 states—Alaska, Arkansas, Connecticut, Hawaii, Kentucky, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington, and Wisconsin, and the District of Columbia. It’s also for anybody who’s moved within the last 2 years from any of these places. What makes these residents…

More Increased Dollar Amounts Coming to Bankruptcy Soon

Here are the rest of the increased dollar amounts affecting consumer bankruptcy cases filed in Utah and elsewhere on or after April 1, 2016.   Our last blog post a couple days ago described how every 3 years many of the dollar amounts within the bankruptcy laws are adjusted for inflation. The next set of these adjustments will be effective April 1, 2016. The changes don’t apply to ongoing bankruptcy cases but only to new ones filed on or after that date. The upward adjustments are relatively small, reflecting a 3% or so increase in the consumer price index over the…

New Utah Bankruptcy Dollar Amounts Effective April 1, 2016

Every 3 years many of the dollar amounts in the bankruptcy statutes are adjusted for inflation. Here’s a summary of the important changes applicable in Utah and around the country.   Various bankruptcy laws include important threshold dollar amounts. These laws about dollar amounts can affect everything from what assets you can keep to the kinds of debts you can discharge (legally write off). Every three years about 50 of these dollar amounts are adjusted to reflect the change over this time in the consumer price index. The new dollar amounts were just published today in the Federal Register. They…

Protection From Your Co-Signer in Utah

If  you need protection from a co-signor in Utah, bankruptcy will work.     A friend or relative may have helped you earlier by co-signing a debt for you. But now you find yourself needing relief from all or most of your debts through either a Chapter 7 “straight bankruptcy” or a Chapter 13 “adjustment of debts.” So what happens to your co-signed debt? And what happens to whatever responsibility you may feel towards your co-signer? In the last two blog posts we explained how either a Chapter 7 “straight bankruptcy” or a Chapter 13 “adjustment of debts” may help you…

Protecting Your Utah Co-Signer Better

The “co-debtor” stay, available in a Utah Chapter 13, is a creative tool for protecting your co-signer from being forced to pay your debt.   The last blog post was about filing a Chapter 7 “straight bankruptcy” case to “discharge” (legally write off) all or most of your other debts so that you could better afford to pay your co-signed debt. Today we get into how a Chapter 13 “adjustment of debts” gives you much more time to pay a co-signed debt if Chapter 7 doesn’t free up enough money to let you do so. And if you don’t want to…

Protecting Your Co-Signer in Utah

 A Utah Bankruptcy may give a fresh start not just to you, but also to your relationship with your co-signer.   Bankruptcy Can Be the Best Way to Help Your Co-Signer Even if you think that filing bankruptcy would give you the financial relief you need, you may not want to do it because you don’t want to hurt a co-signer. If so, we commend you. And if don’t want to hurt your co-signer (or anyone otherwise obligated with you on a debt), you will be happy to hear that by filing bankruptcy you can often get both financial relief for…

The Chapter 13 Option if Your Home Equity is Partly Encumbered by a Tax Lien

When a tax lien exceeds the amount of equity in the home, Chapter 13 provides an extraordinary way to reduce what you pay on that lien.   In our last two blog posts we dug into tax liens, and we do so one more time today. Two blog posts ago it was about tax liens that have no equity at all to attach to. Then the last blog post was about tax liens that have enough equity in the home to cover the entire amount of the tax lien. Today we get into the in-between situation—where there’s enough equity in the…

Utah Home Equity and a Tax Lien

A tax lien encumbering the equity in your Utah home is dangerous. Chapter 13 takes away the danger.    If the IRS or your state tax collector records an income tax lien against your home, and you want to keep the home, sometimes through bankruptcy you don’t have to pay the tax. If there’s no equity at all in the home to cover the tax lien, and if the tax meets the conditions for being “discharged” –written off, mostly by being old enough—you may not have to pay most of that tax. You might even not have to pay any…

An Income Tax Lien When There’s No Equity in Your Home

Under the right circumstances Chapter 13 can write off the tax and get a release of the income tax lien.   Income Taxes that Can Be “Discharged” (Legally Written Off) If you owe an income tax debt, it can be discharged like most other debts. The tax debt just needs to meet certain conditions for that to happen. Essentially, two conditions have to be met:
  • 3 years must have passed since the tax return for the tax was due, and
  • 2 years must have passed since that tax return was actually submitted to the IRS or state.
There are a…