The Nomberg Law Firm: August 2020

Sunday, August 30, 2020

EXEMPTIONS HELP PROTECT YOUR PROPERTY IN BANKRUPTCY

exemptions bankruptcy

Exemptions are laws that the Bankruptcy Courts follow to determine what assets may be available to pay your creditors. Which exemptions you use in your bankruptcy case vary depending on where you live and where you have lived for the past three years.

Alabama is an opt-out state, which means it does not use the Federal exemptions. The State exemptions allow each individual to claim a homestead exemption on their residence up to $15,500.00 and up to $7,750.00 of personal property. So, a married couple filing for bankruptcy who jointly own their home can claim as much as $31,000.00 of their equity exempt and as much as $15,500.00 of personal property, like cars, furniture, and money in the bank.

For most people seeking to file bankruptcy, those exemptions are more than enough to protect everything you own. The whole concept behind filing for bankruptcy is to give someone a fresh start. If they took everything you have, it would defeat the purpose of filing for bankruptcy.

In most cases, you can keep property over and above the value of your exemptions, but you need to have an accurate inventory of your property and discuss how this works with a bankruptcy lawyer before your case is filed.

Various forms of Individual Retirement Accounts and Life Insurance, for the most part, are 100% exempt from garnishment or levy from creditors, so they are usually 100% exempt from bankruptcy. However, other retirement products, such as an Annuity, may not be fully exempt.

An Annuity is a contract between you and your insurance company in which you make a lump sum payment and then receive regular disbursements from the insurance company over time. Under Alabama law, you can only exempt up to $250.00 per month. So, if you have the right to withdraw the money from the insurance company, then everything over the $250.00 is subject to being garnished by your creditors. If you are only entitled to $250.00 per month or less and nothing more, then the funds should be exempt in bankruptcy.

Again, it is very important that you speak with a bankruptcy attorney to review your assets and help you understand what is protected and what is not protected should you decide to file bankruptcy. Knowing what is protected, may also help you decide whether you should consider filing Chapter 13 instead of Chapter 7.

In Chapter 7, your assets are reviewed by a Chapter 7 trustee to determine what is exempt and what can be sold to pay your creditors. If you have a property with too much equity and you are concerned about losing it, you may have to consider other alternatives to bankruptcy or possibly file Chapter 13.

In Chapter 13, you propose a plan to repay your creditors over time, usually anywhere from 36 to 60 months. How much you must pay your creditors depends on your disposable income, but it also depends on the value of your non-exempt assets. Creditors must receive as much as they would receive in a Chapter 7. This is also known as the “Best Interest of Creditors Test”. So, if you have a property that is not exempt and subject to being sold by a Chapter 7 trustee, you must propose a plan that pays your creditors an amount that is at least equal to the value of this property. If you can claim the property exempt, then that property will not be included in your plan payment calculation.

Whether you are considering filing Chapter 7 or need a Chapter 13 instead, please talk with an experienced bankruptcy lawyer before you file.

If you are struggling to pay your debts and concerned about the future welfare for you and your family, it is important that you seek the advice of a bankruptcy lawyer to ensure that your assets are protected and the debts you seek to eliminate are dischargeable. Our attorneys have been assisting consumers and business owners with bankruptcy matters for over 25 years. If you are considering filing for bankruptcy, please consider contacting the Nomberg Law Firm. Our office number is 205-882-5005.

Steven D. Altmann has been a lawyer for more than 25 years. Steve has earned an AV rating from Martindale-Hubbell’s peer-review rating and was recently named a Super Lawyer and Top Attorney by Birmingham Magazine in the area of Bankruptcy Law.

We are a Federal Debt Relief Agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

from The Nomberg Law Firm – Birmingham Workers' Compensation & Personal Injury Lawyers https://www.nomberglaw.com/blog/bankrupcty/exemptions-help-protect-property-in-bankruptcy/

Monday, August 24, 2020

DO I HAVE TO PAY 100% OF WHAT I OWE CREDITORS IN A CHAPTER 13?

how much of what i owe do i have to pay in a chapter 13 bankruptcy

Chapter 13 is a great way to repay your creditors without worrying about harassment from bill collectors while eliminating high-interest rates and fees on credit card debt. Ultimately, the question that comes up is do I have to repay the full amount that I owe? The answer is NO, you only have to pay what you can afford to pay (disposable income) as long as you satisfy the Bests Interest of Creditors Test.

Section 1325(a)(4) of the Bankruptcy Code sets out the Best Interest of Creditors Test, also known as a liquidation test, which basically requires you to pay your unsecured creditors as much as they would have received under a Chapter 7 distribution. For most people, this won’t be a problem since the bankruptcy exemptions let you keep a fair amount of assets. But, the more stuff you have that is not exempt or the more equity you have in your home, the more you will have to pay in your Chapter 13 bankruptcy.

The liquidation test exists to ensure that creditors are receiving the most value from the debtor. The test guarantees that you are not able to pay such a small amount of money under a repayment plan so that creditors end up with less overall than if your assets were sold by a Chapter 7 Trustee.

In a Chapter 13 bankruptcy, you get to hold onto all their property in exchange for paying a portion of all your debt in a repayment plan. Paying less than 100% to your unsecured creditors is considered a “Composition Plan” or a “Pot Plan”. A Composition Plan will pay unsecured creditors a pro-rata percentage of their unsecured claims in addition to 100% of secured, priority and administrative claims. A Pot Plan is where you only have a certain amount that you can pay each month and all of your creditors (secured, priority, administrative and unsecured) are all paid from the pot of money that you are able to generate over the term of your plan. The typical term for a plan is a minimum of 36 months and a maximum of 60 months.

You can propose a Composition or Pot Plan so long as you satisfy the Best Interest of Creditors Test. If a creditor would stand to make more under Chapter 7 it would be unfair to allow you to file Chapter 13and keep your property.

The amount that you must pay unsecured creditors is the greater of your disposable income or the value of your nonexempt property. So, your creditors will usually get at least an amount equal to your nonexempt property, regardless of whether you file for Chapter 7 or 13 bankruptcy—and even more if your disposable income exceeds the value of your nonexempt property.

Your disposable income is the amount of your total net household income less total household living expenses. This figure is presumably what you have available to pay your creditors. Very few people are able to stick to their budget to the penny, so as long as you haven’t included any unusually high expenses, most courts will confirm a plan even if the payment that you propose is a few dollars less than your disposable income.

The “best interest of creditors” test calculates the minimum amount you must pay to your unsecured creditors through your Chapter 13 plan. If you can’t repay this minimum amount or come close as I mentioned above, the court will not confirm your Chapter 13 plan, which means you will either need to convert to Chapter 7 or your case will be dismissed.

This is why the timing of your bankruptcy filing is critical. If you have too many assets, you may have to consider selling some of your property in order to work out settlements with your creditors before attempting to file a Chapter 13. You can also propose to sell your assets while in a Chapter 13 case so that you can fund your plan by using the proceeds from the sale of your property and pay off the balance of the debt using your disposable income. You should speak with a bankruptcy lawyer about your options before deciding to file for bankruptcy.

We are a Federal Debt Relief Agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

from The Nomberg Law Firm – Birmingham Workers' Compensation & Personal Injury Lawyers https://www.nomberglaw.com/blog/bankrupcty/how-much-of-what-i-owe-do-i-have-to-pay-in-chapter-13/

Monday, August 17, 2020

THE DISABILITY RIGHTS MOVEMENT AND COVID-19

picture of a disabled person in a wheelchair

[1]

The Disability Rights Movement has a vast history that is still being written today. The 1900’s saw the greatest advancements in the dignities afforded to Americans living with a disability. Beginning in the wake of World War II, veterans of the War started a new effort for their country to repay those military men who incurred a disability through their service. Their fight gained servicemen vocational training and rehabilitation treatment for the injuries that left them disabled. While this win may not have encompassed the full reparation deserved for the social group that historically endured shame and ridicule of those not otherwise encumbered, it did bring about a new sense of awareness for the disproportionate treatment of individuals living with a disability.[2]

During the 1960’s, while the Civil Rights Movement was taking shape, Disability advocates joined forces with these minority groups to further awareness and demand legislation which called for equal treatment. The Rehabilitation Act was finally passed in 1973, which made the rights of people with disabilities protected by law.[3] This Act provided equal employment opportunities and prohibited discrimination of such individuals with a disability. But the greatest advancement for the rights of disabled individuals came in the form of the 1990 Americans with Disabilities Act (the ADA). This Act caused a surge of equality in the rights afforded to these individuals within their public life, one example mandate held that all businesses must provide reasonable accommodations for disabled individuals.[4]

Now that the ADA turned thirty years old on July 26th, it stands to wonder how public spaces are still a space of equality during the global pandemic the country as a whole is experiencing. Disability Rights Nebraska has filed a complaint charging that the current methodology for COVID-19 testing discriminates against individuals with disabilities because the plan in place is for drive through testing, meaning that disabled individuals that cannot drive are not able to receive testing with the same ease as individuals without the same obstacles. Disability advocates have also noted that the CARES Act, which allocates three trillion dollars to coronavirus relief efforts, provides less than one billion dollars to states in order to care for their elderly and disabled individuals.[5]

In response to this disproportionate treatment, the International Disability Alliance has launched a campaign to end the discrimination highlighted by the coronavirus pandemic. This campaign urges people the world over to call for equality and inclusiveness in accessing services delivered in response to COVID-19 at the local, national, and global scales. Since the nearly one billion individuals with a disability are at the greatest risk where the pandemic is concerned, it is imperative that these persons receive equal representation and relief.[6]

If you are hurt on the job due to unsafe working conditions, seek legal counsel, as you may be entitled to workers’ compensation or other benefits. As we have since 1967, we will continue to protect the legal rights of our clients – those who are hurt on the job while working for Alabama employers. If you have been injured on the job and want to learn your rights, please consider contacting the Nomberg Law Firm. Our office number is 205-930-6900.

[1] https://validity.ngo/2020/04/20/disability-rights-during-the-coronavirus-pandemic-launch-of-the-covid-19-disability-rights-monitor/.

[2] https://www.adl.org/education/resources/backgrounders/disability-rights-movement.

[3] https://ability360.org/livability/advocacy-livability/history-disability-rights-ada/.

[4] https://www.nps.gov/articles/disabilityhistoryrightsmovement.htm.

[5] https://theconversation.com/the-americans-with-disabilities-act-at-30-a-cause-for-celebration-during-covid-19-143399.

[6] https://www.internationaldisabilityalliance.org/discrimination-covid19.

Bernard D. Nomberg has been a lawyer for more than 20 years. Bernard has earned an AV rating from Martindale-Hubbell’s peer-review rating. In 2019, Bernard was named a Super Lawyer for the 7th year in a row.

from The Nomberg Law Firm – Birmingham Workers' Compensation & Personal Injury Lawyers https://www.nomberglaw.com/blog/disability-rights-and-covid-19/

Monday, August 10, 2020

THE AUTOMATIC STAY – STOP BILL COLLECTORS IMMEDIATELY!

illustration of a man being chased by a bill collector taking his money

One of the benefits of filing for bankruptcy is the Automatic Stay that goes into effect. It is one of the most powerful aspects of any bankruptcy filing. But what is the Automatic Stay? What does it mean? And why should you care?

When I first started practicing law, the phrase Automatic Stay seemed odd to me. When I think of stay, I think of a command you give to your dog “to stay”. It didn’t occur to me that the word ‘stay’ could be used as a noun in the way that it is used in the Bankruptcy context.

However, the Automatic Stay is a federal injunction that prevents the places and companies that you owe money from taking certain actions against you. They are required to stop or halt any actions or attempts to collect a debt. Creditors that you owe are not allowed to call you anymore, send bills, repossess your assets, garnish your wages or bank account, file or continue lawsuits against you or proceed with foreclosure on your house.

There are certain debts where this stay does not apply. These debts typically include actions related to establish or enforce child support or custody, certain criminal proceedings, perfecting a lien against your property, cashing of certain checks, getting new student loans, payment on 401k loans. There are many others, so make sure you consult with your bankruptcy attorney.

The stay happens immediately upon the filing of your bankruptcy case. When you file for bankruptcy protection, the bankruptcy stay automatically goes into effect. It applies even if the creditor has no knowledge of the bankruptcy. Think about it this way: if your auto lender repossesses your car after you file for bankruptcy protection, they will have to return the car, even if at the time they took the car they didn’t know about the bankruptcy. The bankruptcy protection is automatic and absolute once your case is filed.

The stay requires that all of your creditors deal with you on a level playing field under the bankruptcy rules. Creditors MUST seek and get court permission to continue to pursue certain actions. Any creditor who ignores the rules does so at its own peril and may be fined or even sanctioned by the Judge for violating your automatic stay. The protection starts the moment you file for bankruptcy. It is one of the most useful tools that will help you achieve the fresh start that you deserve.

We are a Federal Debt Relief Agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

from The Nomberg Law Firm – Birmingham Workers' Compensation & Personal Injury Lawyers https://www.nomberglaw.com/blog/bankrupcty/automatic-stay-stop-bill-collectors-immediately/

Wednesday, August 5, 2020

THREE FACTORS TO CONSIDER BEFORE FILING FOR CHAPTER 7

three road signs that say chapter 7

As Americans who are currently unemployed brace for a reduction in their unemployment check, many will look to find other ways to manage their household budget. Some will use their savings or cut back on expenses even further, while others will undoubtedly need to file bankruptcy. Those who attempt to file bankruptcy may want to file Chapter 7, but they first must qualify for Chapter 7. Otherwise, they may be relegated to having to formulate a repayment plan in Chapter 13.

Chapter 7 is the quickest way to eliminate your debt problems and begin to rebuild credit. In order to take advantage of Chapter 7, there are 3 primary factors to consider:

Do you and your spouse make too much money? What is your total household income?

Unless your debt is primarily business debt, in order to qualify for Chapter 7, you must first pass the Means Test. The Means Test considers your total household income and your allowable expenses (based on National and Local Standards used by the Internal Revenue Service) to determine whether you have enough disposable income to propose a repayment plan to creditors. If your income is below the median income level for your county/state, then you will qualify. If your income is above the median income, you may still qualify, but you may also need to consider Chapter 13. Talk with your bankruptcy lawyer to see if you pass the Means Test.

Do you stand to lose any assets? How much equity is built up in your house?

If you own a home with a substantial amount of equity or have other assets that could be sold to pay your creditors, you may want to consider filing Chapter 13 or selling those assets and using the money to work out settlements with your creditors. Most creditors are willing to work with you and will take less than the full balance due in order to settle the debt rather than receiving nothing if you file Chapter 7.

Have you sold or transferred any property in the last year?

If you have sold or transferred property to anyone in the past year, you will need to disclose the details of the transaction in your bankruptcy petition. If the person who received your property was related to you or if the consideration received was for less than fair market value, the transfer will be scrutinized by the Chapter 7 Trustee and the Bankruptcy Court. It is possible that you could jeopardize your ability to receive a discharge because of the transfer, so be sure to discuss these transfers with your bankruptcy lawyer before you decide to file a case.

We are a Federal Debt Relief Agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

from The Nomberg Law Firm – Birmingham Workers' Compensation & Personal Injury Lawyers https://www.nomberglaw.com/blog/bankrupcty/three-factors-to-consider-before-filing-for-chapter-7/