Filing Bankruptcy After Your First Case Was Dismissed
If you filed a Chapter 13 bankruptcy case and the case was dismissed, you can file a new bankruptcy case right after the dismissal. However, the automatic stay expires after 30 days unless you file a Motion to Extend the Automatic Stay with the Bankruptcy Court.
If you have two prior Chapter 13 Bankruptcy cases that were dismissed within the last year, then the Bankruptcy Stay is not effective against creditors who are going after your property or taking action against your estate. A Motion needs to be filed by the Attorney on behalf of the filing debtor with the Bankruptcy Court in order to impose or the Automatic Stay against all creditors.
The importance of this provision means that a creditor can take action without the need to ask the Bankruptcy Court for relief from the automatic stay, or permission to proceed, unless you obtained an Order imposing the automatic stay.
There is another rule. You are not eligible to be a debtor for a period of 180 days if you were a debtor in a previous case and you withdrew the Bankruptcy Petition by filing for a voluntary dismissal of your prior case following the filing of a Motion for Relief from Automatic Stay by a creditor in the case.
Which Transfers Count As Constructive Fraud
Unlike actual fraud, constructive fraud can happen even if you didnât intend to deceive or defraud anyone. There are two requirements for a transfer of property to be considered constructive fraud. First, you must have received less than the property was worth at the time. For example, you needed money quickly, so you sold your car for $5,000, even though it was worth $9,000. Giving assets away is another example.
The second requirement for constructive fraud is that you were insolvent at the time of the transfer, or you became insolvent because of the transfer. Insolvent means that the total of your debts is more than the total value of your assets. By law, itâs presumed that you were insolvent during the 90 days before the date you filed bankruptcy. Both requirements must be met for a transfer to be constructive fraud.
Speak With A Bankruptcy Lawyer
Ultimately, filing a Chapter 7 bankruptcy is a serious step. Once filed, its unlikely that the court will let you dismiss the matter. When it comes to timing issues, you wont go wrong seeking the advice of a seasoned bankruptcy attorney.
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Bankruptcy Court Permits Chapter 7 Trustee To Utilize Irs Look
Bottom Line
In its recent decision in Mitchell v. Zagaroli, Adv. Pro. No. 20-05000, 2020 WL 6495156 , the Bankruptcy Court for the Western District of North Carolina held that the Chapter 7 trustee could step into the shoes of the IRS and utilize the IRS longer look-back period to avoid fraudulent transfers.
What Happened?
Individual Peter Zagaroli filed for Chapter 7 bankruptcy relief in a North Carolina bankruptcy court in 2018. The IRS filed a proof of claim for approximately $4,200. In 2020, the Chapter 7 trustee filed an adversary proceeding to avoid certain transfers of real property to the defendants, the parents of the debtor. The trustee alleged that in 2010 and again in 2011, the debtor transferred multiple parcels of land to the defendants for no consideration while he was insolvent.
Among other arguments, the defendants argued that the trustee did not have the power to bring avoidance actions grounded in tax evasion claims that are only available to the United States outside of bankruptcy and that the trustee could not take advantage of the longer look-back period. The court concluded that the majority view is that the plain language of Section 544 allows the trustee to step into the shoes of the IRS. The court refused to look past the plain language of the statute, concluding that when the statutory language is clear, the court must simply apply the plain language.
Why This Case Is Interesting
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If you have concerns about the changes in your financial circumstances for your six-month look back for Chapter 13, talk to ourbankruptcy attorney. Don’t assume you will not qualify. In most cases, we can find a solution that makes your petition successful. Learn more about your six-month look back for Chapter 13 bankruptcy. Call an experienced Florida bankruptcy attorney atThe Golden Law Group. We are ready to answer all of your questions about bankruptcy,debt relief and illegalcollections practices.
From convenient office locations, we represent individuals, families and business owners in bankruptcy matters in Tampa, Brandon, Sarasota, and communities throughout the Florida Gulf Coast region. If you are over your head in debt and don’t know where to turn for relief, turn to us.
Contact us today for a free, no-obligation consultation about the bankruptcy lookback period. The Golden Law Group is here for you.
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What Is Foreclosure Defense
If your lender has filed or is threatening a foreclosure action, mortgage foreclosure defense is a possible alternative to bankruptcy. Foreclosure defense can help keep you in your home by raising legitimate defenses to a foreclosure action . Many lenders have wrongfully foreclosed upon homeowners, engaged in predatory lending practices, and made egregious mistakes in both setting up the mortgage loan and foreclosing on the homeowner. Mortgage defense is about forcing the banks to follow the rules. For more on foreclosure defense, see âForeclosure Defense and Bankruptcyâ in our âStopping Pennsylvania Foreclosureâ series. > > More
Requirements Before Filing Bankruptcy In Pennsylvania
Filing for bankruptcy is difficult and stressful. Do not do it alone. At Melaragno, Placidi & Parini we help you navigate the often confusing process and provide you with the information to make informed decisions on what Chapter best suits your needs.
We have handled hundreds of Pennsylvania bankruptcies and over the years have taken care of our clients by providing them with in depth knowledge on how declaring bankruptcy works. Here are some tips that you might find useful.
There are several requirements you need to meet before you file bankruptcy. These include:
1. You must be a resident in Pennsylvania for at least 91 of 180 days before filing. Each court has a jurisdiction.
2. Do your homework before you make a decision about declaring bankruptcy. Think about which Chapter you want to choose when you file. Know where you will file. Will it be the federal or state system? Be aware that the exemptions in a federal bankruptcy are different than a state bankruptcy.
3. There is no waiting period to file bankruptcy. However, there may be a waiting period of up to two years for successive bankruptcy discharges depending on the circumstances of the case.
4. All debtors are required by law to take pre-bankruptcy credit counselings. There is a small fee for the course. It must be completed up to 6 months before filing and can be taken online, on the phone or in person.
5. The amount of debt you have, in part, determines which Chapter you file.
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Gifts Made During The Look
While the Department of Human Services publishes the penalty divisor in terms of both days and months, the regulations state that the period of ineligibility is determined by dividing total gifts by the daily penalty divisor. Partial days of ineligibility are rounded down.
For example, the penalty in 2022 for a $20,000 gift would be calculated as follows: $20,000 ÷ $482.50 = 41.45, rounded down to 41. The period of ineligibility is therefore 41 days.
The rationale for this rule is that if the applicant hadnt given away, say, $44,000 of her assets, then she would have been able to pay for approximately three months of care at a rate of $14,676.04 per month. So the penalty will be the three months she could have paid for herself, if not for the gift.
What Is Chapter 7 Bankruptcy
Chapter 7 bankruptcy is a federal procedure that, if you qualify, allows you to eliminate some or all of your debts. Most debt is dischargeable under Chapter 7, although there are a few exceptions. In the vast majority of Chapter 7 cases, the debtors keep all of their personal property, such as cars, household goods, furnishings, retirement accounts, personal items, etc. Moreover, it is often possible for debtors to keep their home.
One of the major advantages of Chapter 7 is that the process is short. Most Chapter 7 cases take about four months from the time that you file until you receive your discharge of debt. Thus, Chapter 7 gives you the opportunity to get a fresh financial start in a relatively brief period. > > More
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What Are The Signs That I Should Consider Bankruptcy Or A Bankruptcy Alternative
You may wish to review your financial situation with a bankruptcy attorney if you are experiencing any of the following:
- Falling behind on home or car payments or paying on âthe last dayâ
- Making minimum credit card payments
- Paying one card with another
- Purchasing necessities, such as food and medicine, with credit cards
- Having little or no savings
- The sudden termination of a credit card or credit line
- Lack of health insurance or other necessary insurance coverage
- Financial concerns are beginning to affect your health, work, and family relationships
A good bankruptcy attorney will review all of your options with you, such as debt settlement, debtor defense, mortgage foreclosure defense, and mortgage modification, not just bankruptcy. In fact, a visit to an experienced bankruptcy attorney may help you avoid bankruptcy, if there are viable alternatives. If you do need to file for bankruptcy, your attorney should thoroughly explain the chapters of bankruptcy available to you and the pros and cons of each. > > More
Disclosures In The Statement Of Financial Affairs
At the outset of a bankruptcy filing, debtors are required to provide complete disclosure of assets, liabilities, creditors and financial affairs. Failure to disclose such a transfer will be considered bankruptcy fraud, which can subject a debtor to various penalties, including jail time. Transferring property without receiving fair compensation will be problematic for the individual or entity receiving the transfer, since the trustee will likely seek to recover the asset from the recipient.
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Don’t Forget To Complete Bankruptcy Education Requirements
Before receiving a bankruptcy discharge, you must complete credit counseling and debtor education requirements.
- You’ll need to take a credit counseling course from an approved agency and submit your completion certificate when filing your bankruptcy case. Otherwise, the court will dismiss your case.
- Debtor education. After filing your case, you must complete a personal financial management course or “debtor education course.” The bankruptcy court won’t issue your discharge if you don’t satisfy the debtor education requirement.
Chapter 7 Bankruptcy Pennsylvania Income Limits
The Pennsylvania median income figures for the Means Test are adjusted periodically, based on IRS and Census Bureau data. Pennsylvania median income for bankruptcy cases filed on or after April 1, 2022, is:
| # of People | |
|---|---|
| 9 | $162,537 |
For Pennsylvania households with more than 9 members, add $9,000 for each additional family member. You should always double-check the US Trustees website for the most current figures when calculating the Means Test.
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How Does Your Income Stack Up
There is something called the means test that is applied to your household income to determine whether you qualify to file for Chapter 7 bankruptcy. The first part of the test compares your current monthly income with the Pennsylvania state median income. The latest Pennsylvania median income numbers are as follows:
Eligible sources of income include the following:
- Wages, salary, tips, bonuses, overtime, pay, and sales commissions
- State disability insurance
- Gross income from a business, profession, or farm
- Regular child support or spousal support
- Pension and retirement income
- Annuity payments
You dont have to include income tax refunds or payments from Social Security retirement.
If your monthly income falls equal to or below the median, you can file for Chapter 7. If your income exceeds that number, you still have a chance to pass the second part of the means test, below.
How To File Bankruptcy More Than Once
Congress has provided the means for individuals and couples to file for bankruptcy relief more than one time. There are a number of rules, however with which we must comply in order to determine the eligibility to file a new bankruptcy case.
First, there are no rules limiting the number of times that you can file for bankruptcy relief.
Second, some cases require a waiting period or a court motion in order to allow you to file bankruptcy again. There are different time limits on how long you need to wait before filing for bankruptcy relief again. What time limit applies depends on what Chapter of Bankruptcy you have filed for in the past and what chapter you wish to file now.
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What Happens If I Transfer Property Before Filing Bankruptcy
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In a Nutshell
Transferring property includes selling it or giving it away. If you file bankruptcy, you have to report any property transfers in the two years before you filed on your bankruptcy forms. If the bankruptcy trustee finds that you fraudulent transferred any property, they can undo the transfer to get the property back and sell it to pay your creditors. Read on to learn more about property transfers and how to deal with them when filing bankruptcy.
Written byAttorney Paige Hooper.
Itâs no surprise that when you file bankruptcy paperwork, you must list all your assets and debts. Youâre also required to provide information about your income and expenses. But did you know you must also list any property transfers for the past two years?
Is There A Maximum Debt Limit To File For Chapter 13 Bankruptcy
Yes. There are limits to how much debt you can have and file under chapter 13. The limits depend upon the kind of debt.
For secured debts, the Chapter 13 debt limit is $1,257,850 and includes mortgage loans, loans for vehicles and other personal property, taxes secured by liens, etc.
The Chapter 13 debt limit for unsecured debts is $419,275 per file. Unsecured debts include credit cards, personal loans, medical bills, taxes not secured by a lien, etc.
For a married couple filing jointly, these limits double. The limits are good through the end of 2021 and adjusted every three years.
If you exceed these debt limits, you may need to file under Chapter 11 or consider Chapter 7. However, donât assume that you will not qualify if you believe you are over these limits. Often, there are exceptions to the debt limits, which is a good reason to speak to a qualified bankruptcy attorney.
Note that there is no debt limit to file for Chapter 7 or Chapter 11 bankruptcy.
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Be Wary Of Suing People Before Filing Chapter 7
Any legal claim you have is an asset in your bankruptcy case, even if the matter is unresolved or the amount you’re owed isn’t known. Even claims you have against others are property of the bankruptcy estate.
If you have any type of legal claim, whether you’ve filed a lawsuit or not, talk to a lawyer before filing for bankruptcy.
What Is Debt Negotiation Or Debt Settlement
Debt negotiation, also called debt settlement, can be an alternative to bankruptcy for many people. In debt negotiation, your attorney negotiates with your creditors with the goal of reaching a settlement for significantly less than the full amount owed. Under the right circumstances, debtors have settled debts for a fraction of the initial balance. Although not all cases are appropriate for debt negotiation, it can be a valuable tool in dealing with creditors. > > More
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Filing A Chapter 13 Bankruptcy After A Chapter 13 Bankruptcy
You can file Chapter 13 immediately after receiving a Chapter 13 discharge, but you will not be eligible to receive a bankruptcy discharge in the new case. However, the discharge may not be your goal. Instead, you may just need the protection of the Bankruptcy Court.
A perfect example is the case where someone receives a Chapter 13 discharge of debts. They then fall six months behind on their mortgage. Their goal in filing another Chapter 13 is to save the house.
Other examples include:
- Missing car payments and wanting to avoid auto repossession, and
- Owing non-dischargeable taxes and wanting to prevent the IRS from garnishing your paycheck.
Strategies To Avoid Penalties
In order to avoid violating the Medicaid look-back period and being penalized, there are strategies that are utilized to help families retain some of their assets or to help them gain Medicaid eligibility. However, it is highly recommended that one consult a professional Medicaid planner prior to proceeding with any of the strategies that follow, as they can be exceedingly complex. Disqualifying a loved one, unfortunately, is easy to do and difficult to rectify.
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