Bankruptcy Lawyer MA Matthew T. Desrochers » bankruptcy lawyer MA

Taxes and Canceled Mortgage Debt…Do I have to Pay?

admin — Wed, 16 Mar 2011 22:48:59 +0000

Normally, one would have to pay taxes anytime a past debt is forgiven in an amount that is over $600. However, there is a special exemption that exists that keeps people from paying taxes when the debt forgiven is related to losing their home. There are several common misconceptions that are good for everyone to know whether you are a current homeowner or a former homeowner.

The test to qualify for the special tax treatment is that the debt that has been canceled must have been used by you “to buy, build or substantially improve your principal residence.”

The house cannot be your second home; it must be your primary residence.
The debt can only be for acquiring or constructing a house and making capital improvements to the house; it cannot have been for non-qualifying purposes, such as refinanced mortgage debt used for kid’s tuition, buying cars, or paying off credit cards.
If you do refinance your mortgage with non-qualifying debt, you will only get the difference in the tax exemption.
The mortgage cancellation relief is capped at $2 million for singles and married taxpayers, $1 million for married owners filing separately.
The form on the IRS website, irs.gov, is Form 982 and Publication 4681

If you would like to learn more and/or receive assistance with loan modification or foreclosure, please contact us at (857) 244-1940 or fill out the form on the right.

Bankruptcy, a Viable Option, Not the Bottom of the Barrel

admin — Sat, 08 Jan 2011 14:55:12 +0000

With 15 million people jobless and about one in four homeowners underwater on their mortgages, many people have learned that charging today on the belief that they can pay tomorrow is a dangerous trap. For the first time since the Depression, the economy has pushed people who never would have dreamed of bankruptcy to ask themselves whether they dare file now.

Following a lull in bankruptcies after Congress tightened rules in 2005, personal bankruptcies are increasing. According to the U.S. government, about 1.5 million Americans filed for bankruptcy in the 12 months ended Sept. 30, a 14 percent increase over the number who filed during the 12 months ended Sept. 30, 2009.

Fear holds many back, as they worry their financial options will be ruined for life. But that is hardly the case, Experts agree that bankruptcy does not ruin your life, but they emphasize that those considering it should look into other options, including working out new arrangements with lenders. People who are serious about putting their lives in order often can get a home loan two to three years after coming out of bankruptcy.

If you would like assistance with determining what would be the best option for you regarding your debts or you would like to file for bankruptcy, please contact MATTHEW T. DESROCHERS, ESQ. at (857) 244-1940 or fill out the form on the right.

Signs That You Might Be Headed Towards Bankruptcy

admin — Tue, 19 Oct 2010 14:25:14 +0000

U.S. consumer bankruptcies are trending UPWARDS-big time!!!, 1.6 million filings estimated to come by the end of 2010.

That puts bankruptcy filings at their highest level since 2005, according to the American Bankruptcy Institute In 2005 Congress sought to limit bankruptcies through the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA).

But bankruptcies have soared just the same, says the ABI. “While the 2005 bankruptcy overhaul law aimed to reduce filings, overall consumer debt and continued financial stress have led to consumer bankruptcies climbing back to pre-BAPCPA levels,” said ABI Executive Director Samuel J. Gerdano. “We expect that there will be nearly 1.6 million new bankruptcy filings by year end.”

How can you avoid getting on that undesirable list? Start by knowing the key signs that you might be headed toward bankruptcy. With enough warning, you may be able to take steps to avoid financial calamity and get back on solid financial ground.

Here are a few signs that you are heading towards BANKRUPCTY

You’re using credit cards to pay for critical items like housing or groceries – Credit cards aren’t meant to pay ongoing household bills, especially if you have any outstanding balance. If you’re using a card to pay your mortgage each month, or are down at the Safeway (Stock Quote: SWY) sliding your card through the checkout line scanner for food and supplies every week, you may be headed down a slippery path.

You have no health insurance – Full-blown health reform doesn’t kick in until 2014 – that is, if the courts allow it. Until then, if you don’t have health insurance you’re just asking for financial trouble. Studies show that medical bills are a common trigger for bankruptcy proceedings. If you don’t have insurance, and you suffer a major accident or illness, that’s a surefire way to go broke.

Home equity line of credit –DON’T ABUSE IT!!!!! This one is hard to accomplish these days, as banks have really tightened the reins on home equity loans. But if you fall behind on your home equity payments, the bank treats it like you’ve fallen behind on your mortgage – and it could try to foreclose on your home. It’s imperative that you keep up to date on your home equity payments – banks and mortgage lenders are watching those payments very closely.

Living paycheck-to-paycheck: Another sign that you’re in danger of sliding into bankruptcy is not having any savings in your financial picture. This tees you up for serious financial trouble if you lose your job or suffer a debilitating illness.

Co-signing loans: Never co-sign a loan for anyone – even a family member. If the borrower forecloses on the loan, the bank will come to you looking for payment in full. If you can’t make good on the loan, then it’s your neck on the chopping block. Co-signed loans are another common theme in bankruptcy proceedings.

Bankruptcy doesn’t have to be inevitable. If you suspect you’re in deep financial straits, take concrete steps to avoid the “final straws” listed above. Your current debt situation may be difficult, but it needn’t lead to bankruptcy.

If you are struggling financially and feeling that money is tight; you must speak to a qualified bankruptcy attorney. Please contact the Law Offices of Matthew T. Desrochers, P.C.
We offer FREE consulations and in home appointments.

5 Do’s And Don’ts When Considering Bankruptcy in Massachusetts

admin — Tue, 14 Sep 2010 18:27:50 +0000

My name is Matthew T. Desrochers and I am a practicing bankruptcy attorney. I often find myself advising clients not to do things they were planning on doing before they came in to see me. After all, that’s why they are in my office, to get advice on how to handle their debt issues. Some of the actions they contemplate, if they did carry through with them, would result in disastrous outcomes for their bankruptcy. Below you will find a few DO’s and DON’TS for anyone considering filing bankruptcy.

1. DO: When completing your bankruptcy petition, list all of your property and assets, as well as all of your debts and creditors.

Your bankruptcy petition is the paperwork they you fill out and your bankruptcy lawyer later files with the Court. The Debtor, the person filing bankruptcy, must reveal all of their assets and all of their debts in this petition. This is one of the main prerequisites when filing bankruptcy. In other words, you have to list everyone who you owe money to (including friends and family) and all of your possessions (even that old motorcycle your dad gave you).

2. DON’T: If you are represented by a bankruptcy lawyer, DO NOT call the Trustee’s office.

Recently I attended a “brown bag luncheon” (us bankruptcy lawyers aren’t the “wine and dine” type) with the Chapter 13 Trustee. At the luncheon, the Trustee made it very clear that if a client calls her office, only bad things could come of that call. In fact, she advised every lawyer to go back and tell our clients NOT to call her office. When a client calls in to the Trustee, their file immediately pops up on the screen. The person viewing that screen then looks for any little thing that may have gone unnoticed in the client’s case. Is a Plan payment a little late? Was there a tax refund that previously went uncollected?

3. DO: Keep your bankruptcy lawyer updated about changes in your Income during a Chapter 13 case

When you enter into a Chapter 13 bankruptcy, it can go on for up to 5 years. Think of a Chapter 13 as a partnership between you and your bankruptcy lawyer. We will be friends for the next few years. To reach the intended successful outcome, each party must perform their duties. One of the obligations of a person filing bankruptcy under Chapter 13 is to ensure their bankruptcy lawyer

is aware of any changes in their income, whether an increase, or decrease, during the entire case. While you may be hesitant to let your bankruptcy lawyer know about an income increase, you must keep in mind that it does not always result in an increased plan payment.

4. DON’T: Give away or remove your name from expensive assets you own before filing bankruptcy.

This DON’T might be the biggest and most important. Just re-read the statement after DON’T above, it doesn’t sound honest, does it? The bankruptcy Court certainly doesn’t believe that it is. In fact, the Court calls this FRAUD and you can get in a lot of trouble for it. Transferring any property out of your name before filing bankruptcy is just something you shouldn’t do.

5. DO: Disclose, Disclose, Disclose

There is a favorite saying in the bankruptcy lawyer community: “The three most important words in bankruptcy are Disclose, Disclose, Disclose”. Yeah, we’re such a clever bunch! The point is, when in doubt about whether to “list” an asset or anything really, in the Petition, Disclose it. Let everyone know about it. Maybe it turns out to be nothing important and you’ve lost nothing by the disclosure. On the other hand, maybe the non-disclosure is uncovered by the Trustee and interpreted as an attempt to mislead the Court. In that case, you may have just lost everything. Clients should take this saying to mean “Tell your bankruptcy lawyer everything”.

While there are many, many more Do’s and Don’ts when filing bankruptcy, these 5 will get you well on your way to a successful outcome.

The Importance Of Hiring A Massahcusetts Bankruptcy Lawyer

admin — Wed, 28 Apr 2010 22:54:36 +0000

f you are planning to file bankruptcy, Massachusetts Bankruptcy lawyers can help you to have the best possible results.

Although it sometimes gets a bad name, bankruptcy exists to protect individuals as well as businesses who have had the unexpected happen. A Massachusetts bankruptcy attorney understands the laws and will fight to get the best possible settlement for you to protect your assets.

Individuals may file bankruptcy for any number of reasons. Sometimes the filing may be brought on because of a loss of a job, medical bills or just poor planning. By filing for bankruptcy, you can protect your home from debtors placing liens on the property and prevent wage garnishment. While you may need to enter into a repayment schedule, eventually, in three to five years, you can have the debts all satisfied.

With businesses, filing bankruptcy can help to keep debtors away while you rebuild a business after a difficult time. The protection may be what is needed to get your business back on track and allow you to start to see a profit made by the money you have already invested in that business.

Bankruptcy may have serious consequences to your credit and ability to borrow money in the future. It may limit your ability to buy a home. The mark remains on your credit report for up to ten years, so you will want to discuss these effects with the attorney before filing for bankruptcy.

Bankruptcy is no one’s first choice. However, if you find yourself in a situation where there seems to be no where else to turn, sometimes due to circumstances beyond your control, bankruptcy may be your only option. Consult with Massachusetts bankruptcy lawyer, Matthew Desrochers, who can help you through the process of bankruptcy. Call him today for a free consultation at (857) 244-1940. He can often help you to preserve more assets than if you had tried to file bankruptcy for yourself.

Discharge Student Loans in Massachusetts Bankruptcy?…..YUP!!!

admin — Mon, 26 Apr 2010 17:46:14 +0000

Current Bankruptcy law prevents debtors/clients from discharging any student loans except in cases of EXTREME hardship. Well things are changing!

Democrats Introduce Legislation to Make Private Student Loans Dischargeable in Bankruptcy

Democratic lawmakers introduced legislation yesterday that would allow private student loan borrowers to once again discharge their private student loans in bankruptcy. Since 2005, private student loans have not been dischargeable in bankruptcy. Before changes were made to the bankruptcy code in 2005, only federal student loans and private loans where substantially all of the funds were provided by a nonprofit institution were non-dischargeable in bankruptcy.

Senators Dick Durbin (D-IL), Sheldon Whitehouse (D-RI) and Al Franken (D-MN) cosponsored the legislation in the Senate and Representatives Steve Cohen (D-TN) and Danny Davis (D-IL) cosponsored the legislation in the House. “People who seek higher education to better their futures should not be dissuaded from doing so by the threat of financial ruin,” said Cohen in a press statement. “The bankruptcy system should work as a safety net that allows people to get the education they want with the assurance that, should their finances come under strain by layoffs, accidents, or other unforeseen life events, they will be protected.”

“One of the great inequities in student aid is the inability for private student loan borrowers to receive the same consumer protections that are provided to countless other types of borrowers,” said NASFAA Interim President Joan Crissman. “We support this legislation and urge lawmakers to do likewise.”

The bills in the House and Senate differ slightly. The House bill would return the bankruptcy law to the language that was in place before 2005, with minor tweaks. The Senate bill would allow all private education loans — including nonprofit loans — to be dischargeable in bankruptcy. Before changes were made to the bankruptcy code in 2005, only government issued or guaranteed student loans and private loans where substantially all of the funds were provided by a nonprofit institution were non-dischargeable in bankruptcy. This protection has been in place since 1978 and was intended to safeguard federal investments in higher education, according to lawmakers.

There are very few types of debts that the bankruptcy law subjects to a different standard, allowing for discharge in only the most extreme circumstances. For example, the bankruptcy code makes it especially difficult for people to escape child support responsibilities, overdue taxes, and criminal fines. Privately issued student loans should not be on that list, according to the lawmakers who introduced the bill.

Keep an eye out for these changes; they may help you get out of debt.

Property That May Be Exempt From Bankruptcy In Massachusetts

admin — Wed, 21 Apr 2010 21:01:37 +0000

Historically, state bankruptcy law supplied the property exemptions accessible to those seeking bankruptcy protection. Even so, the personal bankruptcy code now enables states to choose between the federal exemptions offered inside the bankruptcy code or the exemptions offered in state law. In Massachusetts you can choose between using the Federal Bankruptcy Exemptions or the Massachusetts state exemptions. Speaking with a qualified Massachusetts bankruptcy lawyer can help guide you towards the best option for your situation.

Common Bankruptcy Exemptions

A few typical kinds of property that are exempt from personal bankruptcy proceedings include:

Retirement Savings. The bulk of your retirement savings are protected by the personal bankruptcy code including pensions, stock bonus plans, Individual Retirement Accounts (IRAS), 401ks and other employer sponsored retirement plans.

Your Property. This is known as the homestead protection. Federal and state exemption laws let you protect your house from creditors in bankruptcy up with a certain dollar amount of money.

Your Automobile. Personal bankruptcy law recognizes that you have to have a car or truck in order to maintain a job and meet your monetary obligations. For that reason, a bankruptcy exemption exists for your car. The exemption does not permit you to spend money to drive a costly car while not repaying your monetary obligations. The exemption is limited to a specific dollar amount.

Home Products. Bankruptcy law sets an exemption amount for all of your home goods and a maximum amount of money per individual item. Usually, a personal bankruptcy trustee recognizes that there is little value in utilised household products and these items aren’t applied to satisfy debts even if they are cumulatively worth more than the greatest amount. Household goods can include things like pots and pans, bedding and decorative objects.

Personalized Items. Some particular things such as reasonably essential clothing are exempt. Jewelry, up with a specified amount, may possibly also be exempt.

Awards in personal injury cases are typically exempt from bankruptcy proceedings.

Tools of the trade are exempt up to certain dollar amounts established by law. For example, a professional photographer might be able to keep expensive cameras and processing equipment that an amateur photographer would need to sell to be able to satisfy his or her debts.

Tribune Co. gets go-ahead to pursue bankruptcy reorganization plan – Chicago Tribune

bankruptcy - Google News — Wed, 14 Apr 2010 01:52:20 +0000

Boston Globe

Tribune Co. gets go-ahead to pursue bankruptcy reorganization plan
Chicago Tribune
… its key creditor constituencies, Chicago-based Tribune Co. took one step forward and another one back at a hearing before a US bankruptcy judge Tuesday. …
Judge affirms Tribune's exclusive right to pursue bankruptcy planLos Angeles Times
Lendors Express Problems in Tribune's Bankruptcy PlanChicago Public Radio
Tribune Co. files bankruptcy reorganization planBoston Herald
BusinessWeek -Reuters -The Associated Press
all 548 news articles »

Mastro gives up future protection from his creditors – Seattle Times

bankruptcy - Google News — Wed, 14 Apr 2010 01:24:39 +0000

Mastro gives up future protection from his creditors
Seattle Times
Bankrupt Seattle real-estate magnate Michael R. Mastro has agreed to forgo any opportunity to have his massive debts wiped away by a federal bankruptcy …

and more »

Judge Rules On Trump Entertainment (TRMP) Bankruptcy – Casino Gaming Stock

bankruptcy - Google News — Tue, 13 Apr 2010 20:57:20 +0000

New Zealand Herald

Judge Rules On Trump Entertainment (TRMP) Bankruptcy
Casino Gaming Stock
Pending regulatory approval Trump Entertainment Resorts (TRMP: 0.40 0.00%) its set to exit its third Bankruptcy later this year. …
Trump Entertainment 4.0: Less debt, more IvankaThe Associated Press
Trump Beats Out Icahn for Control of CasinosNew York Times (blog)
U.S. judge clears Trump Entertainment revamp planMarketWatch
Wall Street Journal (blog) -Wall Street Journal -TopNews United States
all 341 news articles »