Wednesday, January 10, 2018

Bankruptcy Chapter 13 - How much will my monthly payment be? (Part 3)

This is the third part of a blog series. In Part 1, I explained the first step in determining the amount of the monthly chapter 13 payment. In Part 2, I explained the second step is to determine what debts must be paid in full through the plan. The next step is to complete the Disposable Income analysis, which is referred to as the "Means" Test.  


The means test uses a series of calculations using some local, regional and national statistics along with some actual allowable deductions from the debtors' gross income to determine what the debtors "should be able to pay" each month. This is will set the minimum monthly payment.

Also, it sets duration of the payment plan. If the calculations show the debtor's income is above the median income for the local population, the payment plan will probably be for 60 months. If the calculation show's the debtor's income is below the median income, the plan can be as short as 36 months providing the 36 payments can pay the amount of debt discussed in parts 1 and 2 of this series.

After completing the means test calculations for Jane and John, for this case, we determined their income is over the median income for their region and family size and the should have $375.00 disposable income for the plan. The plan will need to be 60 months.  

The means test is a complex analysis and really difficult to explain in detail. If you compare the minimum amount that needs to be paid ($26,000.00 see part 2) to the minimum amount required above ($375.00), you will find it is not enough to pay off the full debt.

The next step is to determine actual disposable income. In upcoming parts of this series I will discuss actual disposable income, the trustee's commission, and try to wrap all this with an estimated payment.

If you want assistance, legal representation, or just want to know more about me, Mark M. Medvesky, or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

 #bankruptcy Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania
    

  

Friday, December 22, 2017

USCIS - Form Update - Form I-751, Petition to Remove Conditions on Residence


Direct from USCIS  Bulletin:

" New edition dated 12/05/17. Starting 02/19/2018, we will only accept the 12/05/17 edition. Until then, you can use the 12/23/16 edition." You can fine the new Form I-751 on USCIS Website.

All USCIS forms are free on the USCIS website at www.uscis.gov/forms.

For more information on USCIS and its programs, you can visit www.uscis.gov or you can follow USCIS on Twitter (@uscis), YouTube (/uscis), Facebook(/uscis), and Instagram (@uscis)."

If you want to know more about Mark Medvesky or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.medveskylaw.com.

#BucksCounty #Immigration #lawyer #lawyers, #MontgomeryCounty #Souderton #Law_Firm

Monday, December 4, 2017

Bankruptcy Chapter 13 - How much will my monthly payment be? (Part 2)

This the second part of a blog series. In Part 1, I explained the first step in determining the amount of the monthly chapter 13 payment. In order to qualify for Chapter 13 protection, creditors must receive at least as much in a Chapter 13 payment plan as they would get if debtor filed a Chapter 7 case. That means the creditors must receive the full value of property that is not exempt under the bankruptcy law. I find this a good starting point.

The next step is to determine what debts must be paid in full through the plan. In Part 1, we found Jane and John had $18,000.00 is non-exempt assets probably requiring Jane and John pay at least $18,000.00 through their plan. That does not mean the credit card companies will receive all that money. There are different kinds of debt. People have secured debt, priority debt, and unsecured debt.

Secured debt includes mortgages and car loans. Priority debts are debt like taxes and some other government debts. Credit card are considered general unsecured debt and are discharged at the end of the case.

In this example, we find Jane and John have missed 10 mortgage payments in the last 18 months and their home is in foreclosure proceedings.  Their mortgage payment is $1,250/month so they have mortgage arrears of $15,000 and owe the mortgage company $4,000 in late fees and attorney's fees. This is secured debt and, in order to keep the home, Jane and John must pay the full debt of $19,000 by the end of the plan.

Also, two years earlier, Jane and John withdrew money from their 401(k) retirement plans. They incurred $7,000 tax liability with the IRS. Because they were so far behind on everything else, they could not pay the taxes and penalty for early withdraw of retirement funds. This is priority debt and also must be paid by the end of the plan. This means the minimum amount of the plan increases from $18,000 to $26,000. Jane and John will need to pay at least $26,000 over the length of the plan if they intend to keep their home.

Again, this is not the end of the analysis. We still need to consider the "Means" Test and the couple's actual disposable income. I will discuss these factors in upcoming parts of this series.

If you want assistance, legal representation, or just want to know more about me, Mark M. Medvesky, or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

 #bankruptcy Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania
    

Thursday, November 23, 2017

Reward Points ... financial benefit or burden? some personal thoughts and opinions from a bankruptcy attorney

A small law practice is like any other small business. It has good months and bad. If you string several bad months together it can cause the demise of the office just like any other small business. So, when I opened my office in 2013, and before I joined my partners, I needed credit cards to get through the tight months and try to find an office supply company that will sell you office supplies and bill you later. Needless to say, my credit card balances started to grow.

Image courtesy of phanlop88
at FreeDigitalPhotos.net
Once I started stringing good months together, I thought I should start using more cash and rely less on credit cards ... makes sense right? But I had these great cards that offered me "points." So I decided to use those cards and pay what ever I placed on them as well as pay towards the balance. This way I could offset the use of the cards with the benefit of the points. I have a Costco Executive Business Credit Card, which actually pays cash back at the end of the year. I also use it for discounts on a couple business services I use.

Another card I use is my AMEX. It can earn points quickly and I even used points in the past to buy business supplies on Amazon. My wife has her cards with points and we even used some of those points for airline tickets once. The lure of reward points is why I decided to continue to use the cards.

While I expected to pay the charges each month, I found it was easier said than done. At the end of the month life would happens and the cash meant for the cards would be used  for something else. I found my cards continued to climb. The whole reward points thing wasn't really helping me. In fact, these programs encouraged me to use my cards more than I expected and should.

I suggest this is the purpose of "rewards" programs. The programs encourage use. When a family is financially strong, these are nice perks. When a family is financially stressed, I also suggest, these programs may cause a distraction and a false sense of benefit. Just take a moment to think about why you are using the credit cards you do. Maybe it will help you to avoid meeting with someone like me.

But if you need to meet me or just want to know more about me, Mark Medvesky, or our firm of Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

#bankruptcy #Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania

Wednesday, November 15, 2017

Should I assume my car lease in my bankruptcy?

Keeping a car lease during in a bankruptcy case is an important consideration. Debtors can reject without any penalty or further obligation or assume contracts. A lease is a contract and debtors need to decide how they want to deal with leases. 
Image courtesy of nitinut at FreeDigitalPhotos.net

Debtors can reject a lease and give up the property or assume the lease to keep the leased property. Debtors have the responsibility and are required by the bankruptcy law to "assume" a lease if they want to keep the leased property. 

But a debtor must remember when he or she keeps the property, he or she keeps all the obligations. The most obvious obligation is the over-mileage fees. If the debtor has already driven the car over the contracted mileage rate, it might be a good time to give up the car in the bankruptcy and prevent any additional fees.

Another consideration might be the performance of the car. Has it been a maintenance burden... not quite a lemon but far from being cherry? Maybe it is a good opportunity to dump it and to find something else.

Whatever the result, a Debtor should make sure it was a thoughtful decision. If the lease is a burden, rejecting the lease and giving up the car may be the best decision.

If you want assistance, legal representation, or just want to know more about me, Mark M. Medvesky, or Wells, Hoffman, Holloway & Medvesky LLP, check out our website at www.whhmlaw.com.

 #bankruptcy #Chapter7 #Chapter13 #MontgomeryCounty #lawfirm #BucksCounty #Pennsylvania