estate – Page 2 – Laws Regulations

I got divorced after my case was filed. What happens to my property settlement?

bankruptcy divorce consumer bankruptcy

I got divorced after my case was filed. What happens to my property settlement?

If you are entitled to receive a property distribution as a result of a settlement agreement or a divorce decree that happens within 180 days after you file, that distribution becomes part of your bankruptcy estate. Any portion of the settlement that is for your support would be exempt.

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Will bankruptcy affect my right to recover for injuries I previously suffered in an accident?

bankruptcy accident consumer bankruptcy

Will bankruptcy affect my right to recover for injuries I previously suffered in an accident?

Subject to some exceptions, your right to recover damages for personal injury is part of your estate. Subject to the exemption rules, therefore, any money you end up recovering will go to pay off your creditors.

It is crucial that you claim the injury as property and must list it as such in the bankruptcy petition; otherwise you will be judicially stopped from bringing that lawsuit after you are out of bankruptcy.

If you were injured on the job, you probably have a worker’s compensation claim under state law or a like claim under federal law. Your right to receive compensation under these laws is fully exempt. Any right you might have to recover against a third party, however, would be part of your bankruptcy estate.

Similarly, your right to recover under laws that compensate victims of crime would be fully exempt.

Personal injury damages, not including damages for pain and suffering, are exempt to the extent of $18,450 if you elect the federal exemptions (and if your state even allows you to elect the federal exemptions).

Note that what matters is when the injury occurred, not when you file suit. If you were injured in an accident yesterday, your bankruptcy estate owns your right to recover for those injuries if you file for bankruptcy today and file a personal injury lawsuit tomorrow.

(Reviewed 11.14.08)

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I am middle age, engaged to be married shortly. I have a 19 and 24-year old; my fiance has a 12 and 10 year old. Each of us has wills leaving our assets to our own children. When we marry, what should be done in regard to our estates? Our assets are not likely to exceed $600,000.

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Assets Remarriage Children Asset Protection Estate Planning

I am middle age, engaged to be married shortly. I have a 19 and 24-year old; my fiance has a 12 and 10 year old. Each of us has wills leaving our assets to our own children. When we marry, what should be done in regard to our estates? Our assets are not likely to exceed $600,000.

There is no one answer, but what you each want makes sense and seems fair and reasonable. Here are some recommendations:
1. Prepare a pre-marital agreement that waives claims against the other’s estate. It may also allow you to keep the property you bring into the marriage separate, so if things don’t work out, neither of you lose what you started with. That’s not being “unromantic”, just realistic.
2. Prepare new wills. One approach is to leave your pre-marital property to your kids from the first marriage and leave your post-marital property (other than any future inheritances) to each other.
3. Buy an inexpensive TERM life insurance policy on each other to protect each of you financially in the event of the other’s death. If you are in decent health and in your 40s-50s, these policies can be relatively inexpensive, perhaps $800 per year for $100,000 worth of coverage.
4. Agree to re-examine your situation in 5 years. If you still both feel the same way, leave it alone. However, you may feel differently in 30 years.
5. Realize that most people’s major assets are their life insurance policies, IRAs, 401(k)s and similar plans. Name new beneficiaries and get consent from the other to name your own kids as beneficiaries and waive any spousal rights.
6. Consider using Q-TIP trusts for a jointly owned home that gives the surviving spouse the value of the other’s half for life and then at the second death, the value of one spouse’s half goes to the first to die’s kids unless it is actually needed for the survivor’s support.

A lender has a mortgage lien. What is a lien and does it affect my bankruptcy case?

mortgage lien consumer bankruptcy

A lender has a mortgage lien. What is a lien and does it affect my bankruptcy case?

A lien is a claim by a creditor against some specific item of your property. The property is called “collateral” for the loan. It guarantees payment in the event that you fail to make the required payments. A mortgage lien is a special type of lien on real estate that’s used to secure repayment of a loan for the purchase price or a home-equity loan.

Your home may be subject to more than one lien (e.g., tax liens, judgment liens, “second” and “third” [or even higher numbered] mortgages). If you fail to make payments, the creditor may enforce its rights by taking the collateral (this is called “foreclosing”), in order to get paid off. Filing Chapter 7 bankruptcy blocks a foreclosure sale temporarily, while filing under Chapter 13 blocks it if your plan provides for paying off the arrearages and keeping payments current during the life of your case (see our discussion on the effect of bankruptcy on foreclosures).

Even though your personal liability to repay a judgment or other debt will probably be wiped out (“discharged”) at the end of your bankruptcy case, liens do not automatically go away. If you do nothing about a lien, the creditor will eventually be able to foreclose and sell the collateral. You have several options to avoid losing your property:

(1) You can “avoid” judicial liens against exempt property. See the discussion of “WHAT DOES IT MEAN TO AVOID A LIEN”.

(2) You can “redeem” the collateral by paying the lender its current market value. See the topic “WHAT IS REDEMPTION.”

(3) You can “reaffirm” the debt on terms that you and the lender mutually agree upon and that are fair to you in the judgment of your attorney or the court. See the topic “WHAT IS REAFFIRMATION.”

(4) You can also avoid the hassle of a foreclosure sale by “surrendering” the collateral to the lender. See the topic “WHAT IS SURRENDER”

(Reviewed 11.14.08)

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What are the liability issues involved in a mold case?

Mold Case Liability Issues Injury Law

What are the liability issues involved in a mold case?

The most common “theories of liability” that an attorney would look at in a mold cases might include:

· Negligence – where the plaintiff must establish that a defendant’s (or more than one defendants’) failure to live up to a responsibility (also known as a “breach of a duty”) caused the damage. When someone has been careless and has caused injury or costly damages to another person, they can be held responsible for the damage or injury under a “negligence” theory. In a mold case, an example of negligence might be if a subcontractor left wood or paper-coated sheet rock building supplies out in the rain, then used the still-wet supplies to construct the foundation or inner walls of a house, leading to a serious mold problem.

· Breach of contract – an example would be claims against contractors, architects and builders for construction defects that would not be reasonably expected based on your agreement with them. For example, when you contract with a builder to follow an architect’s plan to construct your home but the builder cuts corners on the plan, leading to a method of construction that causes a mold problem, this is likely a violation, or “breach,” of your contract by the builder. Or if your contract with a builder states specifically that your walls will be built out with Dens Glass Gold sheet rock, which has a moisture-proof coating, but the builder uses a different and inferior gypsum board that becomes moldy from exposure during the construction of your home, you would also have a breach of contract claim.

· Breach of warranty (express or implied) – claims for breach of express warranties are contract claims that focus on the terms and conditions of the contract involved. For example, if a contract between you and a builder states that the builder warrants that the finished construction product will be “free from defect,” but it turns out a construction method has resulted in gaps in your siding that cause mold in your walls, this is a breach of an express warranty. Breach of implied warranties are based upon the idea that a house or building was designed and is usable for its intended purpose. For example, if you hire an architect to design your home and the architect’s design includes a type of flat roof that is inherently prone to serious and damaging leakage, and the roof does leak, you likely have a claim for a breach of implied warranty because it is implied in the contract with an architect that the roof he or she designs will be usable as a functioning, non-leaky roof.

· Fraudulent misrepresentation/concealment – in a sale of real estate, the seller has a duty to disclose latent defects to the buyer which are known or should be known and that are not necessarily discoverable to the buyer upon reasonable inspection. This duty also extends to a realtor when known conditions are not disclosed or are concealed. For example, if the sellers of a house know of a serious mold problem such as the presence of fungi and black within the main walls of a house but there are no outward signs at all of this hidden problem, the sellers, and the sellers’ realtor, must disclose this problem to potential buyers or be at risk for a claim against them for fraudulent misrepresentation once the problem is discovered. The sellers and realtor could also face a fraudulent concealment claim in the case where outward signs of mold, such as damages sheet rock, are replaced and painted-over, to hide the underlying problem without fixing it. An attorney can advise you as to what types of claims you may have that are worth pursuing. You should contact an attorney as soon as possible, since each state limits has a statute of limitations which limits how long you have to sue. If you would like an experienced lawyer to assess your case at no cost or further obligation, please fill out Free Advice’s case evaluation form, and an attorney will contact you directly.

What property will I lose in a Chapter 7 case?

property lost consumer bankruptcy

What property will I lose in a Chapter 7 case?

What you can lose and keep depends on your state’s law.

Generally, you might lose the following items of property:

(1) your second residence,

(2) recreational vehicles,

(3) your second car,

(4) stamp, coin and other collections and heirlooms,

(5) stocks and bond certificates,

(6) cash on hand (unless it comes from unemployment insurance),

(7) deposits of money (e.g., bank accounts, CDs, escrow accounts, money market accounts),

(8) property that you own but donï¿½t have in your physical possession (e.g., security deposits),

(9) money you have a present right to receive at some future date (e.g., tax refunds, vacation pay, wages),

(10) your part of a marital estate,

(11) any inheritance, marital property settlement, or life insurance payment (to the extent not exempt) that you receive within 180 days after filing.

(Reviewed 11.14.08)

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My stepmother gave up her right to an outright distribution of my father’s 401k plan through a post nuptial agreement. The agreement as well as my father’s will clearly state that she is to get 10% of the principal value of the plan per year while my brother and I receive the balance. My stepmom is now trying to void the post-nup because my father did not disclose a life insurance policy worth 100k. Does she have a leg to stand on?

My stepmother gave up her right to an outright distribution of my father’s 401k plan through a post nuptial agreement. The agreement as well as my father’s will clearly state that she is to get 10% of the principal value of the plan per year while my brother and I receive the balance. My stepmom is now trying to void the post-nup because my father did not disclose a life insurance policy worth 100k. Does she have a leg to stand on?

Setting aside an agreement for fraud is a long established principle of law. And misleading statements can be fraud in some circumstances. Similarly lack of full disclosure or over-reaching in a pre- or post-marital agreement can be a basis for setting something in it, or the entire agreement itself, aside. The issue is was there a lack of disclosure, was it truly material, and how do you know your stepmother is right and can prove a failure — perhaps an intentional failure — to disclose? Eventually this would be decided by a judge or jury. Among the issues that would be influential was the nature and duration of the marriage, the parties’ relative wealth, the terms of the agreement (was she also comfortable, and did she want to protect her assets for her family if she died first), and how overreaching or generous it was or wasn’t, and if she made full disclosure.

If she is successful what would she get? It may not be as much as she is getting now, or it may be a lot more. The beneficiary of the 401(k), and probably the waiver, is governed by Federal law, but its value may impact her rights under other state laws of intestate succession or election. AND a court may not let her just set that aside and keep the benefit of everything else. For example, if she knew about the $100,000 policy, what more would she have received for her consent, 1/3rd of that — not the entire $401(k). Also, if she is to get 10% of the principal in the 401(k) per year, anyway, unless she is in her 80s or in bad health, the expected value of that income stream may pretty much equal the whole value. Further, if paid from the 401(k) the proceeds are subject to income tax as she withdraws it. So getting the 401(k) may not mean much financially. This cries out for an experienced lawyer. The lawyer may, after considering the law, the facts and the costs, suggest the matter be compromised, with her getting something more, but not nearly everything she wants.

How does bankruptcy affect a joint account holder?

joint account bankruptcy consumer bankruptcy

How does bankruptcy affect a joint account holder?

Someone who shares signing authority with you is not liable, simply for that reason, for your debts. Your interest in a joint account is an asset of your bankruptcy estate. That doesn’t mean that a Chapter 7 trustee will try to grab all the funds in a joint account, however. You can offer proof that only a certain amount of the money actually belongs to you, or that your name is on the account merely as a convenience to a friend or relative who really owns the account.

Don’t be tempted to use a joint account as a way of putting assets beyond the reach of your creditors. Say you open a joint account with your neighbor Fred. You sell your Porsche and deposit the check. Fred then withdraws the check and buries the money in a tin can in his backyard, right next to the fence. This transaction is a fraudulent transfer, and Fred can be required by a creditor or Chapter 7 trustee to return the payment.

(Reviewed 11.14.08)

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Suppose a creditor forgets to file a proof of claim?

file claim consumer bankruptcy

Suppose a creditor forgets to file a proof of claim?

Generally speaking a creditor who has knowledge of your case and fails to file a proof of claim will lose its right to receive any payment out of your estate. In a Chapter 7 case, that can lead to a surplus that will eventually be paid back to you. In a Chapter 13 case, that can reduce the amount you will have to pay under your plan or increase the amount that other creditors will receive.

There are some cases where you want a creditor to file a claim. For example, if a creditor has security that’s worth less than its claim, you will want to “strip down” the claim to the value of the security. Therefore, the Bankruptcy Code allows the debtor or trustee to file a proof of claim on behalf of a creditor who fails to file its own within the time limit. Unless the creditor objects, that substitute proof of claim binds the creditor.

(Reviewed 11.14.08)

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Texas Divorce & Finances

Texas-Divorce-Finances Divorce Law

Texas Divorce & Finances

Separating the intricacies of joint finances during a divorce can be complicated. How do you divide property? What are the tax consequences? Are there estate planning issues that need to be addressed? Will you pay spousal support, and if so how is the amount determined? Following are some laws specific to Texas Divorce and Finances.
Texas Property Division/Community Property/Debts:
Texas is a community property state. For an explanation of community property rules and the division of property in community property states, see Dividing Up Property in a Divorce: Community Property vs. Equitable Distribution. Courts can give more property to an innocent spouse in a divorce action based on fault. For the meaning of fault, see The Divorce Process: From Separation to Final Judgment.
Texas Spousal Support:
In Texas spousal support is called maintenance. This is a regular amount of money that a court orders a person to pay to a former spouse after a divorce. Whenever the court issues a decree for divorce, the court may also issue an order at that time that either the husband or wife pay maintenance for the other spouse.
This amount and the length of time it will be paid are determined by agreement of the parties or the decision of the court. A court’s decision will be based upon factors such as financial resources; education and employment skills; duration of the marriage; earning ability; and childcare.
A spouse is usually eligible for maintenance only if the marriage lasted 10 years or more, unless the spouse from whom the maintenance is asked has been convicted of domestic violence in the past 2 years. In either case, maintenance is not usually granted for more than 3 years.
You may need a lawyer to help you deal with the financial aspects of your divorce if you and your ex cannot agree. You can find a lawyer at:
Texas Divorce/Child Support/Child Custody Lawyers:
Find an experienced Texas Divorce Attorney at AttorneyPages.com
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