Do I Have to Pay my Homeowner’s Association Dues after Filing Bankruptcy?

What is the Fair Debt Collection Practices Act?

The Fair Debt Collection Practices Act is an act that was passed to keep consumers from being abused by creditors.  Already feeling abused and harassed by the constant calls or the condescending tones or the threatening letters?  There is something you may be able to do about it.

Blue Credit Card

Whenever my mother was frustrated by someone or some corporation she would firmly state, “I’ll show them, I am going to write them a letter.”  It doesn’t sound empowering, yet in this case, she was definitely onto something.  Under this act, you are allowed to write a letter to each creditor requesting they stop contacting you.  This is also commonly revered to as a cease and desist letter. Make sure you make copies of this letter and send it certified mail to all your creditors.  One caveat: this only prevents them from contacting you on a regular basis; the company is still within their own rights to take legal action they deem necessary.  Also, this letter does not magically erase this debt- but a Chapter 7 bankruptcy may be able to wipe out your debt!  Once the creditor has received this letter the only contact they may engage in is to let you know they have received your request and will honor it, or to let you know they have taken legal action.

In addition, this Act also limits the times and the places a creditor may solicit payment from you.  For instance, they are only limited to the hours of 8am to 9pm to call- not that your phone gets much rest, but at least you can sleep with your phone on and know only emergencies are calling you during the night!

Now the important question: are creditors allowed to contact me at work? Unfortunately, they may call once if they somehow obtain your work number, but if they are verbally told or in writing told they are prohibited, it is in violation of this act if they continue to do so.  This also goes for third parties, such as family members.

I have retained Duncan Law, PLLC for our bankruptcy, will that stop creditor calls? Once you have retained an attorney, you may give the creditor your attorney’s information.  At that point, they will typically stop contacting you because they know they aren’t going to be able to collect the debt – they would rather move on to the next person they think they may actually be able to get money from.  However, they are not required to stop all forms of communication to collect a debt until you have actually filed the bankruptcy.

If you feel as though you are being treated unfairly by a creditor who is trying to collect a debt from you, visit the Federal Trade Commission’s Guide for Consumers to learn how to report improper collection attempts.

Garnishment- yikes! Can creditors take my paycheck or tax refund or bank account? The only way a creditor may access your funds and assets is by entering a legal action with the court, such as a suing you.  If the creditor wins, then the court will enter a garnishment order on the creditor’s behalf.  Federal Benefits: most of these are protected and may not be garnished under any circumstance.  However, if you owe student loans, taxes, child support or alimony, be prepared to have you monthly income docked automatically if you are behind on these payments.

If you are being sued, always answer the complaint.  You may represent yourself, which is also known as pro se representation. If you choose to work with us we can help show you how to answer the complaint served against you.

When all seems lost and you feel as though no one is on your side, take a second and read over your rights under the Fair Debt Collection Practices Act.  Most people in your position are at this point due to unforeseen circumstances and have already exhausted every option.  Bankruptcy is a way to get a fresh financial start, but until then, use this Act to protect your privacy, your phone, and your sanity.

Am I Required to Pay Property Taxes On My Vehicle if I Surrender it in Bankruptcy?

What is a Motion to Avoid a Judicial Lien in Bankruptcy?

What Are the Most Common Reasons A Bankruptcy Case is Dismissed?

There are numerous reasons a bankruptcy case may be dismissed. A dismissal of a bankruptcy case is when the federal judge issues an order terminating a case.  Usually the debts are not eliminated if the case is dismissed.  In contrast, a “discharge” means the debts have been eliminated.  Listed below are the most common reasons a bankruptcy case could be dismissed:

Working at Laptop

1)    The debtor gives a false oath or information on the bankruptcy petition with the intent to defraud creditors,

2)    The debtor has filed a previous bankruptcy within a certain time period and is not eligible to file another bankruptcy and receive a discharge of the debts,

3)    The debtor has not filed all the required documents with the bankruptcy court,

4)    The debtor did not take and complete the required court approved credit counseling and/or financial management courses as required by federal law,

5)    The debtor fails to provide certain documentation to the bankruptcy Trustee upon request of such documents by the Trustee,

6)    The bankruptcy Trustee has objected to the discharge of the debtor’s debts based upon his investigation of the debtor,

7)    In a Chapter 13 repayment plan, the debtor fails to make the required Chapter 13 plan payments to the Chapter 13 Trustee,

8)    The debtor has non-exempt property and fails to turn such property over to the Trustee upon request,

9)    The debtor fails to obey a lawful order of the court, and

10) The bankruptcy judge believes there is good cause to deny the debtor a discharge and dismisses the bankruptcy case.

In conclusion, the above list is not exhaustive, but does highlight some of the most common reasons a bankruptcy case could be dismissed.

Am I Required to File Tax Form 941 Before Filing Bankruptcy?

April 15 Tax DayIf you own a business or owned a business in the past and had employees, you were most likely required to file IRS Form 941 on a quarterly basis or IRS Form 944 on an annual basis.  Form 941 is the quarterly report reflecting the taxes you withheld from your employees’ payroll checks as well as the employer portion owed the federal government for Social Security and Medicare taxes.  In many cases, small employers pay their payroll tax liability at the same time they file the 941s.  You can obtain an understanding of the IRS guidelines for filing Forms 941 and 944 on the IRS website, www.IRS.gov.   You can type the term “Form 941” or “Form 944” in the search box to access the instructions.

This blog is not intended to provide instructions on when and how to complete the tax forms, rather the impact of not filing these returns may have on your bankruptcy.  Depending on how the company is legally organized will impact your personal responsibility.  If you are a sole proprietor, single-member LLC or 100% owner of the corporation, you are mostly likely personally responsible for the taxes.  Even if the business entity is no longer doing business or has even been dissolved with the state, you are responsible for the payment of these taxes.

If you file Chapter 13 bankruptcy, you will need to have your tax returns including 941s or 944s filed with the Internal Revenue Service.  At your meeting of creditors some bankruptcy districts require you to sign an affidavit stating you have filed your tax returns, inclusive of 941s or 944s, for the past four years.  If you are unable to sign this affidavit, your case will not be recommended for approval or confirmation and will most likely be dismissed.  If you sign the affidavit, not realizing it applies to 941s as well as your other tax returns, you will be met with a surprise.  The Internal Revenue Service may file a motion to have your bankruptcy case dismissed.  They may also estimate your tax liability and file a proof of claim in your bankruptcy for the amount they have estimated you owe.  This claim will most likely be greater than your actual tax liability, sometimes much great.  As a result, your bankruptcy may not appear viable if you cannot afford to make the Chapter 13 bankruptcy payments including the liability estimated for the payroll taxes owed.

As a result, it is extremely important to file the 941 reports as soon as you anticipate you will file bankruptcy.  The taxes owed for the employee payroll taxes and reported on the 941s can be added into your monthly bankruptcy payments.  As a result, you should be able to resolve any payroll tax liability to the IRS within your bankruptcy.