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lawyer
10 Sep, 2019
The answer to this question is very simple: your family. I constantly find myself trying to explain to people that writing a will is only half the battle when it comes to planning your estate. The reason is complicated. When you write a will, it’s normal to think “okay, I got that taken care of. I know who’s getting my stuff”. This is true, but you may not realize that you’re still leaving your family with the expense, time, and anxiety of going through probate. Your will may say who gets what, but there is no automatic mechanism in that will that transfers the property. Let’s say you die leaving a house worth $100,000. You might say in your will that you want that house to go to your nephew when you die. However, simply saying this in a will doesn’t make it so. The title on your house doesn’t suddenly change due to your death. The only way that happens is by going through probate. Probate costs money. More money than writing a trust would cost. There’s a lot of time involved, a lot of paperwork to be filed, and during the probate, no one can touch any of the property. Probates often take six or more months. During the probate, the judge will read the will and he authorizes the legal transfer of the house and any other property. They will just tell the judge what to do, but it doesn’t do away with him. This is where a trust comes in. As stated earlier, trusts are generally a lot less expensive than a probate. You can put your house and other assets into a trust during your lifetime. What this essentially means is that you can transfer your house and other assets from yourself and to the trustee of your trust. Then, when you pass away, the trustee simply transfers the house and any other property by moving it from him/herself as trustee, to the rightful heir, as stated elsewhere in the trust. No judge involved. No time. Little effort. Huge savings. It will save your family a lot of anguish and money. A will comes along with a trust. This kind of will is known as a pour-over will. In the event you forget to transfer something to your trust during your life, the will will cover you. Of course, like a will, it will, of course, have to be probated if it becomes necessary to do so. I always try to get my clients to write a trust. If you do, believe me, your family will thank you. For more on wills and trusts, see our probate page.
24 Jun, 2016
Sometimes things happen to us in life that we really have no control over. One of these things, off the top of my head, is getting laid off. It may have been nothing you did wrong. Maybe the company you worked for was just downsizing. So you lost your job? Now, what happens? Hopefully, you’ll be one of the really lucky people in the world and get another equal paying job immediately. But what if you don’t? What if you’re on unemployment for six months? What if during this time you’ve not been able to make any payments on your home mortgage, and soon you know foreclosure is coming? Well, if you still can’t find any kind of job that allows you to make your mortgage payment, then you would probably want to file Chapter 7 bankruptcy, wipe out your mortgage debt, give back your house, and move on with life. But what if you do get another worthy job just in time to stop foreclosure? Well, this is when it would be a good idea to file for Chapter 13 Bankruptcy. You see, Chapter 13 is a form of bankruptcy where you pay a trustee one payments a month for a given 36-60 months in an attempt to catch up on any mortgage payments you’re behind. Of course, it doesn’t only work for mortgage payments. If you owed thousands in back taxes and the IRS was coming for you, Chapter 13 could provide you some respite as well. You would have 36-60 months to pay off your taxes. One of the best things about Chapter 13 is that you usually only have one payment to make on debt each month. All of your payment goes to one place, and the trustee then distributes it as necessary. Of course, during the pendency of your Chapter 13, none of your creditors are allowed to harass you, collect money from you, or proceed with legal actions against you. All we have to hope for now is that you have enough income to both pay your regular mortgage payment (or whatever you’re making payments for) AND catch up for those months when you got behind. Sixty months is a long time. Generally, if you were able to get another well paying job, you should be able to catch up on your payments in Chapter 13. In the end, when all the money has been paid back, you come out clean. Your mortgage is now back to being current, or your taxes are now paid off (or I suppose it could be both). Now, assuming you continue in that new job, you can get back with a normal life. So, when is it a good idea to file Chapter 13? When you are behind on payments on something you want to keep (like a mortgage, or a car note, etc.) or need to pay back some taxes. For more information on bankruptcy, see our bankruptcy page.
lawyer
15 Apr, 2016
I found out something this week that surprised me immensely. Did you know that if you are on VA benefits, or need to qualify for need-based benefits, you can put all of your property in an irrevocable trust so that it’s out of your name, and file and qualify for benefits the next day? This came as a great surprise to me. Generally, when people try to hide or give away assets, they can’t just apply for financial aid benefits the next day. Let’s take Medicaid, for example. Before Medicaid will pay you any benefits, it will look back at everything you’ve transferred, given away, or spent in the last five years. That means you can’t exactly be a millionaire and give away all your assets, or put them in an irrevocable trust, and qualify for benefits the next day. This only makes sense. If you can pay for your own long term care facility, you should have to do so. Medicaid should be left for those who truly can’t afford to live. If you plan way ahead, however, you can transfer assets into a trust or to anyone else as long as you do so five years in advance of needing Medicaid assistance. Of course, like with everything, there is a catch. Once you give away your property or put it in a trust, you can no longer be allowed to access the assets in the trust or receive and distributions from the income of the trust. That is oftentimes enough to dissuade someone from doing so. What it would mean is basically giving up your good lifestyle, living like a pauper for five years, and then being able to qualify for benefits. Of course, if you need long term care benefits within that five years Medicaid’s going to unwind the trust and make you use that money to live on. As I stated earlier, this is not the case with the Veteran’s Administration. You can transfer property out of your name today and apply for long term care benefits tomorrow, and qualify to receive them. This is a great option available only to veterans.
05 Oct, 2015
Lately, I have seen an increasing number of clients failing to perform all the necessary requirements to receive a discharge (discharge is the process of getting rid of your debt) in both Chapter 7 and Chapter 13 bankruptcies. Most Chapter 7 bankruptcies are quite straight forward. You take a credit counseling class before you file, either over the phone or via the internet. You provide your attorney with all the information he/she needs to file your bankruptcy, you attend one hearing, and then lastly, before receiving your discharge, you have to take a financial management class. All of these things must happen in order to receive a discharge. Unfortunately, some people pay for a bankruptcy, they get just about all the way through, and then they forget one simple thing: taking their financial management class. This basically ruins the whole case. A discharge is not received and creditors can once again begin harassing you and trying to collect from you. This class is very cheap, not time-consuming, and yet an essential part of the bankruptcy process. Too many times now I have seen former Chapter 7 clients forget this last part of their bankruptcy only to start getting garnished several months later. To fix the problem, they have to then reopen their bankruptcy and beg a judge to allow them to take this class late. Reopening can be expensive, and getting a judge to agree can be quite the hassle. I don’t know how many times I stress to people to take the class, and yet still see them fail to do so. Not only do I remind them, but the court itself sends out a reminder. Now, I understand, you may have moved. You may no longer be reachable at the address you used in your petition for bankruptcy. No matter. You should ALWAYS inform your attorney of any new addresses. This problem is even worse in Chapter 13s. In a chapter 13 bankruptcy, the debtor (person filing bankruptcy) spends three to five years paying off some of their debt, knowing that what they can’t pay will be discharged at the end. However, again, the financial management course must be taken before discharge. It breaks my heart to see a client work hard for five years, make all their required payments, and then forget to take the financial management class and have their case dismissed without the benefit of a discharge. I’ve seen judges who are loath to allow them to reopen their case after making this oversight. In Chapter 13, not only do I tell my clients about the financial management class many times, along with the court itself but during the first bankruptcy hearing, the Chapter 13 trustee even informs everyone that he offers a FREE class that you can take at any time during your Chapter 13 plan. Still, people forget or just never manage to get the class taken. It’s very important to make sure you have fulfilled all of your duties when filing for bankruptcy. Don’t forget, TAKE A FINANCIAL MANAGEMENT CLASS. It will save you a lot of heartache at the end of the day. For more information on bankruptcy, see our page on bankruptcy.
19 Mar, 2014
“But I just don’t think it’s moral or the right thing to do.” That’s a sentence I hear a lot, and many times it’s this thought process that will keep someone who really, legitimately needs to file for bankruptcy from doing so. Individuals who decide against filing bankruptcy because of its implications with morality will only prolong the agony and embarrassment that comes from being in debt, receiving never-ending phone calls from creditors, dealing with debt collection companies, getting sued, and having their wages or bank accounts garnished. I’m here to tell you that all the pain and suffering you will endure as you feverishly try to elude creditors is unnecessary. To the great surprise of many, bankruptcy is actually a concept introduced in the Bible. In fact, it is mentioned favorably on more than one occasion. In Deuteronomy, Chapter 15, verses 1 and 2, Moses says to the people, “At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor; he shall not exact it of his neighbor, his brother, because the LORD’S release has been proclaimed.” In other words, God wants us to forgive one another of all debts every seven years. There is further evidence for this in the Book of Nehemiah, Chapter 10, verse 31 where it is said: “………every seventh year we will forego working the land and will cancel all debts.” The idea of the forgiveness of debts exists in the New Testament too. One such example lies in the Parable of the Unforgiving Servant (Matthew 18: 21-35) in which Jesus tells the story of a lord forgiving his servant of all of his debts out of the kindness of his heart. There are of course numerous other mentions of forgiveness of debt in the Bible, but the important thing to remember is that debtors are not condemned in the Bible. Anyone contemplating bankruptcy in modern-day America should keep this in mind, and perhaps it would make them feel better about the prospect of filing for bankruptcy. The founding fathers of the United States also had strong feelings about the forgiveness of debt. They felt so strongly in fact, that they put the power to regulate bankruptcies in the Constitution. They recognized that occasionally people may need a fresh start in life. Of course, none of this is to suggest that one should file bankruptcy just for bankruptcy’s sake. We all like to pay back our creditors. We all make mistakes at times. Most of us will get in financial trouble at some point in our lives. When we do it’s nice to know that Christianity and our wise founding fathers provide a way out. That doesn’t mean one should file bankruptcy without thinking about it, however. It’s perfectly normal to have some misgivings about filing bankruptcy. If you didn’t, I might question your motive for doing so. As long as your motive is pure, you should rest easy that you aren’t doing anything wrong in the eyes of God. For more information on bankruptcy, please see our bankruptcy page
06 Jul, 2012
Tomorrow, Saturday, July 7, 2012, I will be live on AM 890 and 94.1 KTLR in Oklahoma City at 7:30 a.m. to discuss bankruptcy and assorted topics.
11 Jun, 2012
Over the last 12 years of practicing bankruptcy law, I have found that there is one issue many people are concerned with, which often keeps them from filing bankruptcy. Due to this “fear”, several people end up not filing and instead find themselves in much worse trouble in the future. I’ve even met people who would rather face garnishment and foreclosure than have to suffer what they feel is the “indignity” of bankruptcy. It seems that many people are under the impression that their bankruptcy will appear in the paper the day after they file it, allowing all their friends to see it, having to suffer the pain and embarrassment that would go along with it. Let me calm your fears. Although bankruptcy is public record, very few people will ever find out about it unless they go looking. Creditors will find out of course because they receive written notice. The trustee who handles your case will know. Obviously, anyone else present at your hearing will know, and the credit bureaus will know, but there really isn’t any reason anyone else would ever find out. The Daily Oklahoman doesn’t have time to worry about such things. At one point, the Journal Record published notices of bankruptcy throughout the state (as it is present in Oklahoma City and Tulsa), but even they no longer have any interest in publishing them. It requires a lot of work. Someone would have to go online to the federal court database every day to keep track of bankruptcies since they are all filed electronically now. It’s just too much trouble. Even if the Journal Record did still publish notices of bankruptcy, how many people do you know who read the Journal Record? Not many and most who do are lawyers and people involved in legal or business matters. Notices of probate hearings are filed there. Benign notices. Even most attorneys I know don’t read it. My point is that unless someone is looking, or has reason to look, the odds of any of your friends ever finding out you filed bankruptcy is extremely low. I realize there is a social “stigma” that comes with filing, and I understand the concern, but it’s unfounded. Don’t let the fear of people finding out keep you from getting yourself out of financial problems and receiving your “fresh start” you are entitled to.
20 Mar, 2012
I’ve been practicing law for about 12 years now, but never have I had to deal with the following scenario so often or in such detail. In fact, I would say that the issue presented in this post has come up maybe 5 times as often this year as in any time in the past. Perhaps it’s just because the volume of bankruptcies is so high. Perhaps the recession has people unable to seek legal advice. Perhaps everyone got together and decided this would be a good idea. I don’t know what has caused it, but whatever the cause, it’s actually hurting those who participate. Let’s say you can see that you are slowly falling into the abyss of insolvency. It’s becoming evident that you are becoming unable to make your payments on all your debts as they become due. Maybe you are just trying to stave off bankruptcy for a few more months. Maybe you are hoping to avoid it altogether. Whatever your reason for doing so you decide to go ahead and sell some valuable asset of yours. Maybe you have some $25,000 car, all paid off, just sitting around. You think to yourself, “I can sell that quickly, make a few thousand bucks, and keep myself out of bankruptcy a little longer, or even recover from my situation altogether”. So you do it. You sell it. Thing is you need the money and you need it badly, so you don’t wait until someone comes along and offers you the full value of the car, you sell it to the first person who comes along and is willing to pay you anything for it. Maybe you end up selling it for $10k instead of the $15k it’s worth. That helps you get by for a few months. But then, you realize that it was only a momentary respite. You only saved yourself a couple of months and now you have no choice. Creditors start suing. They start garnishing. You have to file bankruptcy. You go see an attorney. All your numbers look good. You qualify for bankruptcy. Then suddenly your attorney gets this really bad look on his face as he is going through your bank records. “What’s this $10,000?”, he asks you. You explain it to him. Suddenly, your attorney looks like death warmed over as he realizes you might have made a huge, terrible mistake. You sold an asset for much less than it was worth just before filing bankruptcy. You made a “fraudulent conveyance”, or worse yet, you just committed fraud. Maybe you didn’t mean to. Maybe you were completely innocent in your thought process, but you might have just eliminated the possibility of filing bankruptcy. Why? Because when you file bankruptcy, the bankruptcy trustee’s job is to get together all of your non-exempt assets and sell them. Then he/she will turn around and distribute the money obtained from selling them to your creditors equally. The kicker, however, is that they have to be sold by the trustee, usually for market value. Under the bankruptcy laws, the trustee gets to look back at actions you performed prior to bankruptcy and “undo” them if you did something wrong. In the case of selling the truck, guess what? You did something wrong. That truck, which is exempt up to $7,500, was worth $25k. You sold it for $10k. You sold it for $15,000 less than it was worth, which is a huge NO-NO. The trustee can undo that sale, get the truck back, and then sell it for what it’s really worth, giving the proceeds to your creditors. In the meantime, what does it look like you just did? It looks like you sold an asset prior to bankruptcy so that creditors couldn’t get what they were entitled to. If the trustee can prove you actually did this on purpose (intended on getting rid of stuff for less than market value prior to bankruptcy), you just committed actual fraud, which is a crime. Even if the trustee can’t prove you knew what you were doing, you’ve still created a serious problem in the bankruptcy world, and there’s no telling how it may turn out, who you may end up owing more money to, or how much money it may cost you to defend yourself. I’ve had this happen a few times this year. The bottom line is, if you think you may be headed to bankruptcy, BEFORE you sell anything or do anything, go see a lawyer. I think you’d much rather give the property to the trustee before you sell it to someone else, rather than be tried for fraud and denied bankruptcy altogether and possibly face criminal penalties. And I don’t care if someone else tells you it’s okay to do this; unless that someone else is a lawyer, just don’t do it. While we’re on the subject, please, and I can’t stress this enough; pretty please with sugar on top…. don’t give money to family members just before you file bankruptcy, even if you do owe it to them. It’s a violation of the bankruptcy code and once again, depending on the facts, could be a crime. If you think bankruptcy might be in your future, other than making mortgage payments and car payments, PLEASE don’t give any money to anyone else without consulting an attorney. It’s for your own good.
lawyer
10 Sep, 2019
The answer to this question is very simple: your family. I constantly find myself trying to explain to people that writing a will is only half the battle when it comes to planning your estate. The reason is complicated. When you write a will, it’s normal to think “okay, I got that taken care of. I know who’s getting my stuff”. This is true, but you may not realize that you’re still leaving your family with the expense, time, and anxiety of going through probate. Your will may say who gets what, but there is no automatic mechanism in that will that transfers the property. Let’s say you die leaving a house worth $100,000. You might say in your will that you want that house to go to your nephew when you die. However, simply saying this in a will doesn’t make it so. The title on your house doesn’t suddenly change due to your death. The only way that happens is by going through probate. Probate costs money. More money than writing a trust would cost. There’s a lot of time involved, a lot of paperwork to be filed, and during the probate, no one can touch any of the property. Probates often take six or more months. During the probate, the judge will read the will and he authorizes the legal transfer of the house and any other property. They will just tell the judge what to do, but it doesn’t do away with him. This is where a trust comes in. As stated earlier, trusts are generally a lot less expensive than a probate. You can put your house and other assets into a trust during your lifetime. What this essentially means is that you can transfer your house and other assets from yourself and to the trustee of your trust. Then, when you pass away, the trustee simply transfers the house and any other property by moving it from him/herself as trustee, to the rightful heir, as stated elsewhere in the trust. No judge involved. No time. Little effort. Huge savings. It will save your family a lot of anguish and money. A will comes along with a trust. This kind of will is known as a pour-over will. In the event you forget to transfer something to your trust during your life, the will will cover you. Of course, like a will, it will, of course, have to be probated if it becomes necessary to do so. I always try to get my clients to write a trust. If you do, believe me, your family will thank you. For more on wills and trusts, see our probate page.
24 Jun, 2016
Sometimes things happen to us in life that we really have no control over. One of these things, off the top of my head, is getting laid off. It may have been nothing you did wrong. Maybe the company you worked for was just downsizing. So you lost your job? Now, what happens? Hopefully, you’ll be one of the really lucky people in the world and get another equal paying job immediately. But what if you don’t? What if you’re on unemployment for six months? What if during this time you’ve not been able to make any payments on your home mortgage, and soon you know foreclosure is coming? Well, if you still can’t find any kind of job that allows you to make your mortgage payment, then you would probably want to file Chapter 7 bankruptcy, wipe out your mortgage debt, give back your house, and move on with life. But what if you do get another worthy job just in time to stop foreclosure? Well, this is when it would be a good idea to file for Chapter 13 Bankruptcy. You see, Chapter 13 is a form of bankruptcy where you pay a trustee one payments a month for a given 36-60 months in an attempt to catch up on any mortgage payments you’re behind. Of course, it doesn’t only work for mortgage payments. If you owed thousands in back taxes and the IRS was coming for you, Chapter 13 could provide you some respite as well. You would have 36-60 months to pay off your taxes. One of the best things about Chapter 13 is that you usually only have one payment to make on debt each month. All of your payment goes to one place, and the trustee then distributes it as necessary. Of course, during the pendency of your Chapter 13, none of your creditors are allowed to harass you, collect money from you, or proceed with legal actions against you. All we have to hope for now is that you have enough income to both pay your regular mortgage payment (or whatever you’re making payments for) AND catch up for those months when you got behind. Sixty months is a long time. Generally, if you were able to get another well paying job, you should be able to catch up on your payments in Chapter 13. In the end, when all the money has been paid back, you come out clean. Your mortgage is now back to being current, or your taxes are now paid off (or I suppose it could be both). Now, assuming you continue in that new job, you can get back with a normal life. So, when is it a good idea to file Chapter 13? When you are behind on payments on something you want to keep (like a mortgage, or a car note, etc.) or need to pay back some taxes. For more information on bankruptcy, see our bankruptcy page.
lawyer
15 Apr, 2016
I found out something this week that surprised me immensely. Did you know that if you are on VA benefits, or need to qualify for need-based benefits, you can put all of your property in an irrevocable trust so that it’s out of your name, and file and qualify for benefits the next day? This came as a great surprise to me. Generally, when people try to hide or give away assets, they can’t just apply for financial aid benefits the next day. Let’s take Medicaid, for example. Before Medicaid will pay you any benefits, it will look back at everything you’ve transferred, given away, or spent in the last five years. That means you can’t exactly be a millionaire and give away all your assets, or put them in an irrevocable trust, and qualify for benefits the next day. This only makes sense. If you can pay for your own long term care facility, you should have to do so. Medicaid should be left for those who truly can’t afford to live. If you plan way ahead, however, you can transfer assets into a trust or to anyone else as long as you do so five years in advance of needing Medicaid assistance. Of course, like with everything, there is a catch. Once you give away your property or put it in a trust, you can no longer be allowed to access the assets in the trust or receive and distributions from the income of the trust. That is oftentimes enough to dissuade someone from doing so. What it would mean is basically giving up your good lifestyle, living like a pauper for five years, and then being able to qualify for benefits. Of course, if you need long term care benefits within that five years Medicaid’s going to unwind the trust and make you use that money to live on. As I stated earlier, this is not the case with the Veteran’s Administration. You can transfer property out of your name today and apply for long term care benefits tomorrow, and qualify to receive them. This is a great option available only to veterans.
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