According to the Census Bureau, 7% of divorce decrees include a provision for alimony or spousal support. When your spouse, who owes you alimony or support files for bankruptcy, it may lead you to wonder whether you can still collect. For the party receiving alimony, those payments are considered income under your bankruptcy estate. When your monthly income is calculated to determine whether you qualify for Chapter 7, alimony payments will be included in the amount. However, under most exemption laws, alimony is exempt from...
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There are hundreds of thousands of bankruptcy petitions filed every year in America. A major disagreement in the area is whether or not many of these bankruptcy filings are fraudulent. About 95% of all bankruptcies are filed by individuals every year. Most consumer bankruptcy filings are Chapter 7 filings, usually about 65%. Additionally, many filers in Chapter 13 end up not completing their plans or reaching discharge, and have their cases converted to Chapter 7. When Congress passed amendments to the Bankruptcy Code in 2005,...
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In February, the Department of Justice announced its decision to not enforce Section 3 of the Defense of Marriage Act (“DOMA”), which bars the federal government from recognizing same-sex couples as married. The President concluded that this section is unconstitutional and ordered the Department to halt its defense of DOMA. This policy has caused confusion even in bankruptcy court, where the policy prescribed in DOMA, which is still technically good law, conflicts with the Department of Justice’s announcement. In a decision made on May 4,...
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Bankruptcy Myth #7: I must be a US citizen to file for bankruptcy. Also, if I file for bankruptcy I will not be considered for citizenship. Both of these myths are completely false. First, there is no requirement that you be a US citizen to file for bankruptcy. In reality the only requirement you need to meet in order to file bankruptcy is that you either reside, are domiciled, or have most of your property located in the district where you want to file for...
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Are you thinking about filing for Bankruptcy? Don’t fall for these Bankruptcy myths! In Part I of this feature we explored three common bankruptcy myths. Here we explore a few more common bankruptcy myths that are floating around online. Bankruptcy Myth #4: It is simply just too expensive to file for bankruptcy. I won’t be able to afford it. In reality, you really can't afford NOT to file for bankruptcy. While you may think that you lack the necessary funds to file for bankruptcy right...
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Filing Order – Bankruptcy or Divorce? Bankruptcy and divorce often go hand in hand – sometimes, the financial strain of divorce and support obligations leads to the filing of a bankruptcy action. Other times, the stress of financial crisis, which often precedes bankruptcy, may lead to additional strains on a marriage. In some situations, when you know you are heading for both, the question simply becomes: which do you file first? It is important to realize that the answer may depend on the type of...
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Filing for Bankruptcy may seem like a complex process. The average person probably knows very little about bankruptcy. But the process doesn’t have to be scary. There are certified Arizona Bankruptcy Attorneys who can help you through this process. However, whether you are thinking about filing for bankruptcy or are in the process of filing bankruptcy there are certain things you should now. Here we explore a variety of Bankruptcy myths that are just plain false! Myth #1: I will lose all of my property...
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If you are getting calls from the utility company for past due bills you may wonder how bankruptcy will affect those services. Will my utility company be mad at me for filing bankruptcy? Will they turn of my electricity, water, gas and telephone? No! There are certain restrictions on utility service providers that restrict their ability to terminate services if you file bankruptcy. First off, it is important to define what is considered a utility service. Generally utility services include electricity, water, natural gas, and...
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Giving to charities and religious institutions is an important part of many people’s lives. Giving is an important spiritual component in many religions and plays an important role in funding a variety of important social projects. It is important to know that Congress has recognized the importance of such charitable donations and has allowed persons filing for bankruptcy to continue to make such donations under certain circumstances. Charitable Donations Made Prior to Bankruptcy One thing the drafters of the bankruptcy code were worried about is...
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No. Although outside of bankruptcy you can be taxed on the amount of debt that one of your creditor’s discharges for you, inside of bankruptcy the IRS does not consider your discharge of debt as income. But wait a minute! You may be thinking: How can a discharge of debt be considered income? Well, the reason that cancellation of your debt is consider income is simple. The IRS rule that makes a discharge of debt “income” is designed to prevent people from defrauding the IRS....
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