October 21, 2019

History of Labor Day

Labor Day 2019

On September 2, 2019, the U.S. Department of Labor celebrates and honors the greatest worker in the world – the American worker. Labor Day 2019 is the 125th anniversary of Labor Day being celebrated as a national holiday.

Labor Day: What it Means

Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

Labor Day Legislation

The first governmental recognition came through municipal ordinances passed in 1885 and 1886. From these, a movement developed to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During 1887, four more states – Colorado, Massachusetts, New Jersey, and New York – created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 more states had adopted the holiday, and on June 28, 1894, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

Founder of Labor Day

More than a century after the first Labor Day observance, there is still some doubt as to who first proposed the holiday for workers.

Some records show that Peter J. McGuire, general secretary of the Brotherhood of Carpenters and Joiners and a co-founder of the American Federation of Labor, was first in suggesting a day to honor those “who from rude nature have delved and carved all the grandeur we behold.”

But Peter McGuire’s place in Labor Day history has not gone unchallenged. Many believe that Matthew Maguire, a machinist, not Peter McGuire, founded the holiday. Recent research seems to support the contention that Matthew Maguire, later the secretary of Local 344 of the International Association of Machinists in Paterson, N.J., proposed the holiday in 1882 while serving as secretary of the Central Labor Union in New York. What is clear is that the Central Labor Union adopted a Labor Day proposal and appointed a committee to plan a demonstration and picnic.

The First Labor Day

The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883.

By 1894, 23 more states had adopted the holiday, and on June 28, 1894, President Grover Cleveland signed a law making the first Monday in September of each year a national holiday.

A Nationwide Holiday

Women's Auxiliary Typographical Union

The form that the observance and celebration of Labor Day should take was outlined in the first proposal of the holiday — a street parade to exhibit to the public “the strength and esprit de corps of the trade and labor organizations” of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement.

The character of the Labor Day celebration has changed in recent years, especially in large industrial centers where mass displays and huge parades have proved a problem. This change, however, is more a shift in emphasis and medium of expression. Labor Day addresses by leading union officials, industrialists, educators, clerics, and government officials are given wide coverage in newspapers, radio, and television.

The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pays tribute on Labor Day to the creator of so much of the nation’s strength, freedom, and leadership – the American worker.

SOURCE: U.S. Department of Labor

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Administration and Operation of the [Connecticut] Courts

The Chief Justice of the Supreme Court is the head of the Judicial Branch. Its administrative director is called the Chief Court Administrator.

Judicial Functions
The judicial functions of the Branch are concerned with the just disposition of cases at the trial and appellate levels. All judges have the independent, decision-making power to preside over matters in their courtrooms and to determine the outcome of each case before them.

Administrative Operations
The Chief Court Administrator is responsible for the administrative operations of the Judicial Branch. In order to provide the diverse services necessary to effectively carry out the Judicial Branch’s mission, the following administrative divisions have been created: Administrative Services Division | Court Support Services Division | External Affairs Division | Information Technology | Superior Court Operations

 

Administrative Services Division – Provides a wide array of centrally conducted, statewide services for the benefit of all divisions within the Judicial Branch, such as data processing, financial services, personnel matters and facilities management.

Court Support Services Division

  • Office of Adult Probation – Conducts presentence investigations ordered by the Superior Court and supervises probationers in all cases except juvenile matters.
  • Office of Alternative Sanctions – Creates and sustains a full range of alternatives to incarceration for both pre- and post-conviction adult and juvenile populations.
  • Bail Commission – Interviews and investigates individuals accused of crimes to assist the Superior Court in determining terms and conditions of pretrial release.
  • Family Services Division – Assists the Superior Court in the resolution of problems and the adjudication of cases involving family relationships, family support, child protection and juvenile delinquency. Among the services provided by the Family Division are: mediation of domestic disputes, evaluation of child custody and visitation conflicts, juvenile probation services, divorce counseling, residential placement, restitution and community services.
  • Division of Juvenile Detention Services – Provides pretrial secure detention and programming services to juveniles accused of delinquent acts.

External Affairs DivisionCoordinates a variety of legislative, educational and informational activities designed to inform and educate the public and private sectors about the mission, activities and goals of the Judicial Branch.

Information Technology Division –
The Information Technology (IT) Division consists of:

  • The Commission on Official Legal Publications (COLP) – COLP prints and distributes all Judicial publications including such things as the Connecticut Law Journal, Connecticut Reports, the Connecticut Practice Book and official court forms.
  • Judicial Information Systems (JIS) – JIS is responsible for Applications Development and Support, Network and Systems Support, Architecture & Standards as well as Service & Delivery Support.

Superior Court Operations – The Superior Court Operations Division includes the following:

  • Administration – Provides support services and guidance to all segments of the Division by directing the administrative, strategic planning, staff training and business activities, and provides for court transcript services, interpreter services, and the preservation and disposition of seized property; and, the maintenance, retrieval and destruction of records.
  • Court Operations – Ensures that the Superior Court Clerk’s offices process all matters in accordance with Statutory, Practice Book and Judicial Branch policy provisions in an efficient and professional manner through the provision of technical assistance and support services including the Centralized Infractions Bureau and Jury Administration.
  • Judge Support Services – Ensures the prompt delivery of services and programs to Superior Court judges and Family Support Magistrates pertaining to law libraries, legal research, judicial performance evaluations, continuing education and support for technology; and manages grants program.
  • Legal Services – Determines legal issues and provides support services in the areas of attorney ethics, discipline and bar admission.
  • Support Enforcement Division – Enforces, reviews and adjusts family support orders in accordance with federal and state regulation, rules and statutes.
  • Office of Victim Services – Advocates for victims of crime, arranges services, provides assistance and financial compensation.

(Reposted from the Connecticut Judicial Branch Website)

New Bankruptcy Form, Rules Take Effect

Individuals filing for bankruptcy under Chapter 13 must use a new form that presents their payment plan in a more uniform and transparent manner, and creditors will have less time to submit a proof of claim, under new bankruptcy rules and form amendments that took effect Dec. 1.

By creating greater uniformity of where specific types of information must be entered, the new national Chapter 13 plan form will make it easier for creditors, lawyers and judges to ensure that all elements of a bankruptcy agreement reached under Chapter 13 comply with federal laws. Chapter 13, sometimes known as the wage earner’s plan, enables qualified individual filers to reschedule and make debt payments, allowing them to keep their homes and other property.

Bankruptcy courts previously had relied on local versions of Chapter 13 plans, which varied from district to district, in resolving Chapter 13 cases. They now must either use a new national Bankruptcy Form 113, or create a locally adapted form that contains key elements of the national form. In recent months, courts have been updating electronic filing systems and notifying local bankruptcy lawyers and filers of the pending changes.

The deadline for creditors to file a proof of claim was revised in an amendment to Federal Rules of Bankruptcy Procedure 3002.

The new deadline will affect bankruptcies filed under Chapter 7, in which debtors liquidate assets; Chapter 12, which enables family farmers and fishermen to restructure their finances; and Chapter 13. Previously creditors had 90 days after an initial meeting of creditors was held. Now, a proof of claim must be submitted within 70 days of the filing of a bankruptcy petition.

Federal rules amendments typically follow a three-year process, which includes multiple layers of review and extensive public comment.

In April, the Supreme Court transmitted the new rules regarding bankruptcy, as well as amendments to Appellate and Civil Rules of Procedure, and Rules of Evidence, to Congress. The new rules took effect Dec. 1 when Congress did not act to prevent their implementation.

Find a full list of the new rules and form amendments and the Current Rules of Practice and Procedure. Find additional information about the bankruptcy process.

(Re-posted from http://www.uscourts.gov/news/2017/12/01/new-bankruptcy-form-rules-take-effect)

What is a Conservator?

A conservator is a person appointed by the Probate Court to oversee the financial and/or personal affairs of an adult who is determined by the Probate Court to be incapa-ble of managing his or her affairs or unable to care for himself or herself. A conservator may also be appointed for a person who voluntarily requests such assistance.

The term “respondent” refers to a person for whom a conservatorship petition has been filed. If the Probate Court determines that the respondent is incapable and appoints a conservator, he or she is then referred to as a “conserved person.”

There are two basic types of conservatorships to accommodate the different needs of individuals. A “conservator of the person” is appointed to supervise the personal affairs of an individual who is found by the court to be unable to meet essential requirements for personal needs. These needs may include, but are not limited to, food, clothing, shelter, health care and safety. A “conservator of the estate” is appointed to supervise the financial affairs of an individual who is found by the court to be incapable of doing so himself or herself to the extent that property will be wasted unless adequate property management is provided. This may include, but is not limited to, actions to manage assets, income and public assistance benefits.

A person may be in need of one or both types of conservators. Two separate individuals may perform these two roles, or one person may serve in both capacities. A conservator of the estate or person may be an individual, a legally authorized municipal or state official, a nonprofit organization or a business. However, a hospital or nursing home cannot be appointed as conservator.

When a conservator is appointed, a successor conservator can be named as well. The successor conservator replaces the appointed conservator if the appointed conservator resigns, is removed, is deemed incapable or dies. If such an event occurs, the Probate Court will issue a decree confirming the authority of the successor conservator.

An adult with intellectual disability may be in need of a conservator of the estate to manage his or her financial affairs, while a guardian of the person with intellectual disability is appropriate to oversee his or her personal affairs.

Reposted from http://www.ctprobate.gov/Documents/User%20Guide%20-%20Conservators.pdf

Process – Bankruptcy Basics

Article I, Section 8, of the United States Constitution authorizes Congress to enact “uniform Laws on the subject of Bankruptcies.” Under this grant of authority, Congress enacted the “Bankruptcy Code” in 1978. The Bankruptcy Code, which is codified as title 11 of the United States Code, has been amended several times since its enactment. It is the uniform federal law that governs all bankruptcy cases.

The procedural aspects of the bankruptcy process are governed by the Federal Rules of Bankruptcy Procedure (often called the “Bankruptcy Rules”) and local rules of each bankruptcy court. The Bankruptcy Rules contain a set of official forms for use in bankruptcy cases. The Bankruptcy Code and Bankruptcy Rules (and local rules) set forth the formal legal procedures for dealing with the debt problems of individuals and businesses.

There is a bankruptcy court for each judicial district in the country. Each state has one or more districts. There are 90 bankruptcy districts across the country. The bankruptcy courts generally have their own clerk’s offices.

The court official with decision-making power over federal bankruptcy cases is the United States bankruptcy judge, a judicial officer of the United States district court. The bankruptcy judge may decide any matter connected with a bankruptcy case, such as eligibility to file or whether a debtor should receive a discharge of debts. Much of the bankruptcy process is administrative, however, and is conducted away from the courthouse. In cases under chapters 7, 12, or 13, and sometimes in chapter 11 cases, this administrative process is carried out by a trustee who is appointed to oversee the case.

A debtor’s involvement with the bankruptcy judge is usually very limited. A typical chapter 7 debtor will not appear in court and will not see the bankruptcy judge unless an objection is raised in the case. A chapter 13 debtor may only have to appear before the bankruptcy judge at a plan confirmation hearing. Usually, the only formal proceeding at which a debtor must appear is the meeting of creditors, which is usually held at the offices of the U.S. trustee. This meeting is informally called a “341 meeting” because section 341 of the Bankruptcy Code requires that the debtor attend this meeting so that creditors can question the debtor about debts and property.

A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:

[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.

Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This goal is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts. This publication describes the bankruptcy discharge in a question and answer format, discussing the timing of the discharge, the scope of the discharge (what debts are discharged and what debts are not discharged), objections to discharge, and revocation of the discharge. It also describes what a debtor can do if a creditor attempts to collect a discharged debt after the bankruptcy case is concluded.

Six basic types of bankruptcy cases are provided for under the Bankruptcy Code, each of which is discussed in this publication. The cases are traditionally given the names of the chapters that describe them.

Chapter 7, entitled Liquidation, contemplates an orderly, court-supervised procedure by which a trustee takes over the assets of the debtor’s estate, reduces them to cash, and makes distributions to creditors, subject to the debtor’s right to retain certain exempt property and the rights of secured creditors. Because there is usually little or no nonexempt property in most chapter 7 cases, there may not be an actual liquidation of the debtor’s assets. These cases are called “no-asset cases.” A creditor holding an unsecured claim will get a distribution from the bankruptcy estate only if the case is an asset case and the creditor files a proof of claim with the bankruptcy court. In most chapter 7 cases, if the debtor is an individual, he or she receives a discharge that releases him or her from personal liability for certain dischargeable debts. The debtor normally receives a discharge just a few months after the petition is filed. Amendments to the Bankruptcy Code enacted in to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 require the application of a “means test” to determine whether individual consumer debtors qualify for relief under chapter 7. If such a debtor’s income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief.

Chapter 9, entitled Adjustment of Debts of a Municipality, provides essentially for reorganization, much like a reorganization under chapter 11. Only a “municipality” may file under chapter 9, which includes cities and towns, as well as villages, counties, taxing districts, municipal utilities, and school districts.

Chapter 11, entitled Reorganization, ordinarily is used by commercial enterprises that desire to continue operating a business and repay creditors concurrently through a court-approved plan of reorganization. The chapter 11 debtor usually has the exclusive right to file a plan of reorganization for the first 120 days after it files the case and must provide creditors with a disclosure statement containing information adequate to enable creditors to evaluate the plan. The court ultimately approves (confirms) or disapproves the plan of reorganization. Under the confirmed plan, the debtor can reduce its debts by repaying a portion of its obligations and discharging others. The debtor can also terminate burdensome contracts and leases, recover assets, and rescale its operations in order to return to profitability. Under chapter 11, the debtor normally goes through a period of consolidation and emerges with a reduced debt load and a reorganized business.

Chapter 12, entitled Adjustment of Debts of a Family Farmer or Fisherman with Regular Annual Income, provides debt relief to family farmers and fishermen with regular income. The process under chapter 12 is very similar to that of chapter 13, under which the debtor proposes a plan to repay debts over a period of time – no more than three years unless the court approves a longer period, not exceeding five years. There is also a trustee in every chapter 12 case whose duties are very similar to those of a chapter 13 trustee. The chapter 12 trustee’s disbursement of payments to creditors under a confirmed plan parallels the procedure under chapter 13. Chapter 12 allows a family farmer or fisherman to continue to operate the business while the plan is being carried out.

Chapter 13, entitled Adjustment of Debts of an Individual With Regular Income, is designed for an individual debtor who has a regular source of income. Chapter 13 is often preferable to chapter 7 because it enables the debtor to keep a valuable asset, such as a house, and because it allows the debtor to propose a “plan” to repay creditors over time – usually three to five years. Chapter 13 is also used by consumer debtors who do not qualify for chapter 7 relief under the means test. At a confirmation hearing, the court either approves or disapproves the debtor’s repayment plan, depending on whether it meets the Bankruptcy Code’s requirements for confirmation. Chapter 13 is very different from chapter 7 since the chapter 13 debtor usually remains in possession of the property of the estate and makes payments to creditors, through the trustee, based on the debtor’s anticipated income over the life of the plan. Unlike chapter 7, the debtor does not receive an immediate discharge of debts. The debtor must complete the payments required under the plan before the discharge is received. The debtor is protected from lawsuits, garnishments, and other creditor actions while the plan is in effect. The discharge is also somewhat broader (i.e., more debts are eliminated) under chapter 13 than the discharge under chapter 7.

The purpose of Chapter 15, entitled Ancillary and Other Cross-Border Cases, is to provide an effective mechanism for dealing with cases of cross-border insolvency. This publication discusses the applicability of Chapter 15 where a debtor or its property is subject to the laws of the United States and one or more foreign countries.

In addition to the basic types of bankruptcy cases, Bankruptcy Basics provides an overview of the Servicemembers’ Civil Relief Act, which, among other things, provides protection to members of the military against the entry of default judgments and gives the court the ability to stay proceedings against military debtors.

This publication also contains a description of liquidation proceedings under the Securities Investor Protection Act (“SIPA”). Although the Bankruptcy Code provides for a stockbroker liquidation proceeding, it is far more likely that a failing brokerage firm will find itself involved in a SIPA proceeding. The purpose of SIPA is to return to investors securities and cash left with failed brokerages. Since being established by Congress in 1970, the Securities Investor Protection Corporation has protected investors who deposit stocks and bonds with brokerage firms by ensuring that every customer’s property is protected, up to $500,000 per customer.

The bankruptcy process is complex and relies on legal concepts like the “automatic stay,” “discharge,” “exemptions,” and “assume.” Therefore, the final chapter of this publication is a glossary of Bankruptcy Terminology which explains, in layman’s terms, most of the legal concepts that apply in cases filed under the Bankruptcy Code.

Reprinted from http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/process-bankruptcy-basics

CONTEMPLATING A BANKRUPTCY AFTER DIVORCE

Oftentimes Bankruptcy and Divorce go hand-in-hand.  If you are in the process of getting divorced, it would be wise to consult a consumer attorney to analyze your financial circumstances, ensuring all of your obligations will be accounted for in the Divorce Decree/Separation Agreement, and to determine if you can handle paying them once you go back to a single income after the divorce.  Bankruptcy may be a safe option once you are divorced if you find you cannot afford living on a single income.

If you will be taking the bulk of the debt once you separate and do not have the income to support it, you may consider filing for bankruptcy and starting over all together once the divorce is finalized.  Here are some topics that often arise from divorce when contemplating a bankruptcy or may lead you to file for bankruptcy after your divorce:

  1. Who will take the marital home and pay its related expenses?

If you are getting a divorce and taking over possession of the marital home, along with taking over the related expenses, especially the mortgage(s) on the home, be sure to have your Divorce Decree state the terms of this transfer accurately.

Also, making a budget before the divorce is final will help you determine if you will be able to afford to stay in the home.

If it is determined that you can, in fact, afford to live in the home after the divorce, then make sure the proper documents are recorded on the Land Records after the transfer.  This will give you a paper trial you may need to provide in your bankruptcy case later on.

  1. Will you be responsible for credit cards in your ex-spouses name?

If so, make sure the Divorce Decree/Separation Agreement spells out all debt you will be taking responsibility for once the divorce is final, along with the last four digits of any account numbers.  Once the divorce is final, be sure to contact each company in writing and have the accounts switched into your name.  Wait at least six weeks and then review your credit report(s) to ensure accurate reporting, so as not to inadvertently leave off a debt you are responsible for on your Bankruptcy petition, among other things.

  1. Will you be ordered to pay alimony or child support?

Keep in mind, that these particular types of “debts” are allowable deductible expenses in your Bankruptcy case; this means that they are taken into consideration when qualifying for Bankruptcy.  Also, it is important to note that court-ordered Alimony and Child Support are what is known in the Bankruptcy realm as “priority debts” and cannot be discharged in most cases.  (Taxes and loans involving the government are also included in the priority category.)  It is vitally important to have all obligations in this category fully defined and explained in your Divorce Decree/Separation Agreement, as you will likely be fulfilling these obligations regardless of ever filing for Bankruptcy.

Filing for bankruptcy after a divorce is not the end of the world.  In fact, it may be the best thing that ever happened to you, and will help you to move on and start fresh.

Chapter 7 Bankruptcy Series Part Five: Preparing, Signing and Filing a Bankruptcy Petition

In this blog we will explore a very important step in your Chapter 7 Bankruptcy process: Your Chapter 7 Bankruptcy Petition Signing and Filing.

Once you have met with me for your free initial consultation, retained me to file your Chapter 7 Bankruptcy Petition and delivered to me all of the required documents, I will then prepare your Chapter 7 Bankruptcy Petition and schedule a convenient time for you to come in to our office to sign your Petition.

Your Bankruptcy Petition signing is a very serious step in your Bankruptcy Process and you will be required to carefully read your petition.  This appointment will take approximately one hour in which I will go over each and every page with you and answer any questions you may have.  Ultimately, you will be asked to sign several pages of the Petition under oath, swearing that the information provided is true and accurate to the best of your ability, and I will then electronically file your Petition with the Bankruptcy Court.

This blog is intended to give you preview of the many parts of a typical Chapter 7 Bankruptcy Petition. Please keep in mind that your Petition may differ according to your specific financial circumstances and that it is vitally important to always disclose all of your income, assets, debts (liabilities).  Not fully disclosing all of your information could lead could be deemed Bankruptcy Fraud which is a crime.

The first part of your Chapter 7 Bankruptcy Petition consists mainly of identification and general information.  It will list your name, address, and the last four digits of your social security number.  It will give a rough estimate (or a “range”) of how many creditors, assets and liabilities you have.  It will also include your signature (as the “Debtor”) and mine (as your “Attorney”), affirming that the information provided is true and accurate under the penalties of perjury.  Please note that your Bankruptcy Petition is a public document and due to that fact your Social Security Number will always be redacted to the last four digits for anti-identity theft purposes.

The next several pages in your packet will be your Means Test, the assessment used to determine if you qualify for a Chapter 7 Bankruptcy filing.  For more information on your Means Test please consult me, and/or my previous Blog in this Chapter 7 Series.

Your Means Test will be followed by Exhibit D which is your statement to the Court that you successfully completed your Credit Counseling requirement.  Credit Counseling is a mandatory course taken usually on the telephone or internet, which takes about one hour, analyzes your financial circumstances and helps you create a budget.  For more information on the Credit Counseling requirement please consult me, and/or my previous Blog in this Chapter 7 Series.

The next part of your Chapter 7 Bankruptcy Petition will be a Summary of the Schedules to follow.  This is a snap-shot view of your income, assets and liabilities as more fully reported on each individual schedule (described in detail below) and a Statistical Summary of Certain Liabilities (in layman’s terms that mean you “debt-to-income ratio”).

The Summary will be followed by a series of Schedules as follows:

  • Schedule A – Real Property: This Schedule will list any Real Estate that may be in your name according to the Land Records with a brief description and its location, along with the nature of your interest in the property (e.g. whether you own it solely or jointly), its current value and the amount of any liens (e.g. mortgages) against the property.  This list may also include time shares, if any.
  • Schedule B – Personal Property: This Schedule will list all of your personal belongings, such as cash, contents of bank accounts and safe deposit boxes, security deposits with public utilities or landlords, clothes, jewelry, antiques, collectibles, firearms, sports equipment, household goods and furnishings, stocks, bonds, retirement accounts, patents, copyrights, or other intellectual property, future interests in any estates or life insurance policies, legal claims against other persons or entities, vehicles and any other personal property not already listed.
  • Schedule C – Property Claimed as Exempt: This Schedule will list all of your property that is exempt (or, in other words, immune) from being liquidated by your Chapter 7 Trustees in order to pay back your creditors.  It will also list the specific law that provides for each exemption.  A typical exemption is that for the equity in your car, or home (usually referred to as a “homestead exemption”).  Depending on your specific set of financial circumstances, I will determine if it is in your best interests to utilize the State or Federal exemption scheme in order to maximize the protection of your assets under the law.  (Check back to the Consumer Legal Services, LLC Blog site in the future for an extended explanation of the exemption system!)
  • Schedule D – Creditors Holding Secured Claims: This Schedule will list any creditors you have holding a security interest in any of your property.  Common examples of such interests are mortgages for homes and and car loans for cars.
  • Schedule E – Creditors Holding Unsecured Priority Claims: This Schedule will list any of your creditors that are holding unsecured (for which they do not have a lien) priority claims.  These types of claims arise when you have child support obligations, government student loans or tax debt.  These types of debts are considered “priority” and take precedence over your other debts.  They are usually not discharged in Bankruptcy and you will continue to pay them while your Chapter 7 case is pending.  Some exceptions apply, especially with regard to taxes. (Check back to the Consumer Legal Services, LLC Blog in the future for an extended explanation of taxes in bankruptcy!)
  • Schedule F – Creditors Holding Unsecured Non-Priority Claims: This Schedule will list all of your unsecured debt, such as credit cards, personal loans and medical debt.  Unless otherwise determined by the Bankruptcy Court, all of the debts listed on this Schedule will be discharged.  There will be an ancillary document related to this Schedule called the Verification of the Creditor Matrix.  This verification will include a list of your creditors in a matrix format for easy uploading to the Bankruptcy Court.
  • Schedule G – Executory Contracts and Unexpired Leases: This Schedule will list all unperformed contracts and leases that you may be subject to.  The example I often give for an executory (or unperformed) contract is for snow plowing when it has not yet snowed and/or you have not yet paid the plowman.  A lease, for example, for an apartment or a car is an executory contract to the extent that it has not expired.
  • Schedule H – Codebtors: This Schedule will list any persons you have become liable with on a debt, other than a spouse in a joint petition.  Examples often include parents you have co-signed a loan for a child.
  • Schedule I – Current Income of Individual Debtor(s): This Schedule will list all current income you are receiving at the time of the signing of the petition.  If you are married, your spouse’s income must be included whether or not your spouse is filing Bankruptcy.
  • Schedule J – Current Expenditures of Individual Debtor: This Schedule will list all of your expenses that you will continue paying regardless of ever having filed for Bankruptcy, such as your mortgage, utilities, transportation and food expenses.

At the end of all of the Schedules there will be a “Declaration Concerning Debtor’s Schedules” which you will sign under oath stating that all of the foregoing information contained in the various schedules is true and accurate to the best of your ability.

Next there will be a document called “Statement of Financial Affairs.”  This statement will include information about such things as any pending lawsuits you are involved in, how much you paid for debt counseling and information related to any businesses you may own or have owned, among other pertinent information.

That statement will be followed by a Disclosure of Compensation of Attorney for Debtor.  On this document I will list the amount of money you have paid for my services.

The final document in your Chapter 7 Bankruptcy Petition will be your Form B21, otherwise known as your “Statement of Social Security Number.”  This statement is the only non-public part of your Bankruptcy Petition and will only be seen by, you, me and the Bankruptcy Court.  It is not a public document and therefore, your entire Social Security Number will be protected against identity theft.  This is quite possibility the most important document you will read and sign at the time of filing.  In fact, I will require that you re-read this document several times, and even show me your Social Security Card to confirm the accuracy of your Social Security Number.  If your social security number is wrong on this form, your debts will not be discharged…but someone else’s may be!  So always triple check…and then check again!

After you have read and signed all of the documents you will be given a copy of your entire Petition.  After you go home, I will then electronically file your Petition.  During the e-filing process a Case Number, a Chapter 7 Trustee, and a date for your 341 Meeting will be randomly generated and assigned to your Chapter 7 Bankruptcy Case.  I will deliver this information to you by phone or email, and a Notice will be delivered to you directly on the mail by the Bankruptcy Court including this and other pertinent information about your Chapter 7 Bankruptcy Case.

Stay tuned for our next blog entry in this Chapter 7 Series which will explain just who and what the Chapter 7 Trustee is and why the Trustee plays such a vital role in your Chapter 7 Bankruptcy!

For more information or to find out if you qualify for Bankruptcy, please call our office at 203-713-8877.

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3 Ways To Make The Most Of Your Tax Refund

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If you’re living on a tight budget and find yourself barely scraping by from paycheck to paycheck, getting your tax refund might seem like an incredible gift. However, you want to use this gift wisely. While it is natural to want to spend your tax refund immediately, there are better ways to use this money, especially if you are in debt. Of course you might be tempted to use that money to buy your daughter the Christmas gift you couldn’t afford a few months ago, or to upgrade to a better car, but spending the money in this way will only increase your money troubles down the line. Here are my top 3 ways that you can use your tax refund to get out of debt.

  1. Establish an emergency savings account. If you don’t already have an emergency savings account, it is a good idea to create one. Even if you have significant debt, if you aren’t sure where your tax refund money should go, a good idea is to set up an emergency account and leave the money alone for now. You can establish this account and allow the money to collect interest while you wait until you really need it. Emergencies can occur at any time, and even if you have debt, you should be saving so that if you suddenly need surgery or money to pay your mortgage, you can use the funds in this account.
  2. Pay off a debt. If you have debt, you can use this money to chip away at it. Do you have a lingering student loan that you can’t seem to get rid of? Is your credit card debt getting out of control? Nobody likes to be in debt, so putting this money toward living a debt free life can give you confidence and help you start focusing on other financial goals. If you have multiple debts, start paying off the one with the most interest first.
  3. Use the money to pay for bankruptcy. Is your debt just out of control? Have you been thinking about filing for bankruptcy? When you have a little extra money, it might be the best time to file for bankruptcy. Your tax returns can cover the filing fees and attorney fees. If you’ve been putting off bankruptcy because you didn’t think that you could hire a bankruptcy lawyer, this is your opportunity to get the help you need by using some extra money. Using your tax return to chip away at debt is a good option, but keep in mind that you can also use that money to file for bankruptcy and have all of your debts discharged.

Using your tax refund to its fullest ability will help you improve your financial situation. If you have been considering bankruptcy, now is a good time to do so because you can afford to file and hire a lawyer. If you would like to discuss good ways to use your tax refund with me, I am happy to help. As someone who has filed for bankruptcy and paid off several debts, I can give you some advice about managing your money and how to best pay off your debt. If you think that bankruptcy is the right option for you, you can contact me by clicking here.

Answers to Common Bankruptcy Questions

A decision to file for bankruptcy should be made only after determining that bankruptcy is the best way to deal with your financial problems.  This blog can not explain every aspect of the bankruptcy process.  If you still have questions after reading it, contact Consumer Legal Services, LLC for a FREE consultation today!

What Is Bankruptcy?

Bankruptcy is a legal proceeding in which a person who can not pay his or her bills can get a fresh financial start.  The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court.  Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

What Can Bankruptcy Do for Me?

Bankruptcy may make it possible for you to:

* Eliminate the legal obligation to pay most or all of your debts.  This is called a “discharge” of debts.  It is designed to give you a fresh financial start.

* Stop foreclosure on your house or manufactured home and allow you an opportunity to catch up on missed payments.  (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.)

* Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.

* Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.

* Restore or prevent termination of utility service.

* Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.

What Bankruptcy Can Not Do

Bankruptcy can not, however, cure every financial problem.  Nor is it the right step for every individual.  In bankruptcy, it is usually not possible to:

* Eliminate certain rights of “secured” creditors.  A creditor is “secured” if it has taken a mortgage or other lien on property as collateral for a loan.  Common examples are car loans and home mortgages.  You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money on the debt if you decide to give back the property.  But you generally can not keep secured property unless you continue to pay the debt.

* Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, most student loans, court restitution orders, criminal fines, and most taxes.

* Protect cosigners on your debts.  When a relative or friend has cosigned a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.

* Discharge debts that arise after bankruptcy has been filed.

What Different Types of Bankruptcy Cases Should I Consider?

There are four types of bankruptcy cases provided under the law:

* Chapter 7 is known as “straight” bankruptcy or “liquidation.”  It requires an individual to give up property which is not “exempt” under the law, so the property can be sold to pay creditors.  Generally, those who file chapter 7 keep all of their property except property which is very valuable or which is subject to a lien which they can not avoid or afford to pay.

* Chapter 11, known as “reorganization,” is used by businesses and a few individuals whose debts are very large.

* Chapter 12 is reserved for family farmers and fishermen.

* Chapter 13 is a type of “reorganization” used by individuals to pay all or a portion of their debts over a period of years using their current income.

Most people filing bankruptcy will want to file under either chapter 7 or chapter 13.  Either type of case may be filed individually or by a married couple filing jointly.

Chapter 7 (Straight Bankruptcy)

In a bankruptcy case under chapter 7, you file a petition asking the court to discharge your debts.  The basic idea in a chapter 7 bankruptcy is to wipe out (discharge) your debts in exchange for your giving up property, except for “exempt” property which the law allows you to keep.  In most cases, all of your property will be exempt.  But property which is not exempt is sold, with the money distributed to creditors.

If you want to keep property like a home or a car and are behind on the mortgage or car loan payments, a chapter 7 case probably will not be the right choice for you.  That is because chapter 7 bankruptcy does not eliminate the right of mortgage holders or car loan creditors to take your property to cover your debt.

If your income is above the median family income in your state, you may have to file a chapter 13 case.  Median family income is different in each state.  For example, in 2009, the median income for a family of four ranged from a low of just under $60,000 inOklahomato almost $100,000 inMaryland.  Other states fall in between.  Higher-income consumers must fill out “means test” forms requiring detailed information about their income and expenses.  If the forms show, based on standards in the law, that they have a certain amount left over that could be paid to unsecured creditors, the bankruptcy court may decide that they can not file a chapter 7 case, unless there are special extenuating circumstances.

Chapter 13 (Reorganization)

In a chapter 13 case you file a “plan” showing how you will pay off some of your past-due and current debts over three to five years.  The most important thing about a chapter 13 case is that it will allow you to keep valuable property–especially your home and car–which might otherwise be lost, if you can make the payments which the bankruptcy law requires to be made to your creditors.  In most cases, these payments will be at least as much as your regular monthly payments on your mortgage or car loan, with some extra payment to get caught up on the amount you have fallen behind.

You should consider filing a chapter 13 plan if you:

* Own your home and are in danger of losing it because of money problems;

* Are behind on debt payments, but can catch up if given some time;

* Have valuable property which is not exempt, but you can afford to pay creditors from your income over time.

You will need to have enough income during your chapter 13 case to pay for your necessities and to keep up with the required payments as they come due.

What Does It Cost to File for Bankruptcy?

It now costs $299 to file for bankruptcy under chapter 7 and $274 to file for bankruptcy under chapter 13, whether for one person or a married couple.  The court may allow you to pay this filing fee in installments if you can not pay it all at once.  If you hire an attorney you will also have to pay the attorney fees you agree to.

If you are unable to pay the filing fee in installments in a chapter 7 case, and your household income is less than 150 percent of the official poverty guidelines (for example, the figures for 2009 are $21,855 for a family of two and $33,075 for a family of four), you may request that the court waive the chapter 7 filing fee.  The filing fee can not be waived in a chapter 13 case, but it can be paid in installments.

What Must I Do Before Filing Bankruptcy?

You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed.  The agency will review possible options available to you in credit counseling and assist you in reviewing your budget.  Different agencies provide the counseling in-person, by telephone, or over the Internet.  If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed.

Most approved agencies charge between $30/-/$50 for the pre-filing counseling.  However, the law requires approved agencies to provide bankruptcy counseling and the necessary certificates without considering an individual’s ability to pay.  If you can not afford the fee, you should ask the agency to provide the counseling free of charge or at a reduced fee.

If you decide to go ahead with bankruptcy, you should be very careful in choosing an agency for the required counseling.  It is extremely difficult to sort out the good counseling agencies from the bad ones.  Many agencies are legitimate, but many are simply rip-offs.  And being an “approved” agency for bankruptcy counseling is no guarantee that the agency is good.  It is also important to understand that even good agencies won’t be able to help you much if you’re already too deep in financial trouble.

Some of the approved agencies offer debt management plans (also called DMPs).  A DMP is a plan to repay some or all of your debts in which you send the counseling agency a monthly payment that it then distributes to your creditors.  Debt management plans can be helpful for some consumers.  For others, they are a terrible idea.  The problem is that many counseling agencies will pressure you into a debt management plan as a way of avoiding bankruptcy whether it makes sense for you or not.  You should not consider a debt management plan if making the monthly plan payment will mean you will not have money to pay your rent, mortgage, utilities, food, prescriptions, and other necessities.  It is important to keep in mind these important points:

* Bankruptcy is not necessarily to be avoided at all costs.  In many cases, bankruptcy may actually be the best choice for you.

* If you sign up for a debt management plan that you can’t afford, you may end up in bankruptcy anyway (and a copy of the plan must also be filed in your bankruptcy case).

* There are approved agencies for bankruptcy counseling that do not offer debt management plans.

It is usually a good idea for you to meet with an attorney before you receive the required credit counseling.  Unlike a credit counselor, who can not give legal advice, an attorney can provide counseling on whether bankruptcy is the best option.  If bankruptcy is not the right answer for you, a good attorney will offer a range of other suggestions.  The attorney can also provide you with a list of approved credit counseling agencies, or you can check the website for the United States Trustee Program office at www.usdoj.gov/ust.

What Property Can I Keep?

In a chapter 7 case, you can keep all property which the law says is “exempt” from the claims of creditors.  It is important to check the exemptions that are available in the state where you live.  (If you moved to your current state from a different state within two years before your bankruptcy filing, you may be required to use the exemptions from the state where you lived just before the two-year period.)  In some states, you are given a choice when you file bankruptcy between using either the state exemptions or using the federal bankruptcy exemptions.  If your state has “opted” out of the federal bankruptcy exemptions, you will be required to choose exemptions mostly under your state law.  However, even in an “opt-out” state, you may use a special federal bankruptcy exemption that protects retirement funds in pension plans and individual retirement accounts (IRAs).

If you are allowed to use the federal bankruptcy exemptions, they include:

* $21,625 in equity in your home;

* $3450 in equity in your car;

* $550 per item in any household goods up to a total of $11,525;

* $2175 in things you need for your job (tools, books, etc.);

* $1150 in any property, plus part of the unused exemption in your home, up to $10,825;

* Your right to receive certain benefits such as Social Security, unemployment compensation, veteran’s benefits, public assistance, and pensions–regardless of the amount.

The amounts of the exemptions are doubled when a married couple files together.  Again, you may be required to use state exemptions which may be more or less generous than the federal exemptions.

In determining whether property is exempt, you must keep a few things in mind.  The value of property is not the amount you paid for it, but what it is worth when your bankruptcy case is filed.  Especially for furniture and cars, this may be a lot less than what you paid or what it would cost to buy a replacement.

You also only need to look at your equity in property.  That means you count your exemptions against the full value minus any money that you owe on mortgages or liens.  For example, if you own a $50,000 house with a $40,000 mortgage, you have only $10,000 in equity.  You can fully protect the $50,000 home with a $10,000 exemption.

While your exemptions allow you to keep property even in a chapter 7 case, your exemptions do not make any difference to the right of a mortgage holder or car loan creditor to take the property to cover the debt if you are behind.  In a chapter 13 case, you can keep all of your property if your plan meets the requirements of the bankruptcy law.  In most cases you will have to pay the mortgages or liens as you would if you didn’t file bankruptcy.

What Will Happen to My Home and Car If I File Bankruptcy?

In most cases you will not lose your home or car during your bankruptcy case as long as your equity in the property is fully exempt.  Even if your property is not fully exempt, you will be able to keep it, if you pay its non-exempt value to creditors in chapter 13.

However, some of your creditors may have a “security interest” in your home, automobile, or other personal property.  This means that you gave that creditor a mortgage on the home or put your other property up as collateral for the debt.  Bankruptcy does not make these security interests go away.  If you don’t make your payments on that debt, the creditor may be able to take and sell the home or the property, during or after the bankruptcy case.

In a chapter 13 case, you may be able to keep certain secured property by paying the creditor the value of the property rather than the full amount owed on the debt.  Or you can use chapter 13 to catch up on back payments and get current on the loan.

There are also several ways that you can keep collateral or mortgaged property after you file a chapter 7 bankruptcy.  You can agree to keep making your payments on the debt until it is paid in full.  Or you can pay the creditor the amount that the property you want to keep is worth.  In some cases involving fraud or other improper conduct by the creditor, you may be able to challenge the debt.  If you put up your household goods as collateral for a loan (other than a loan to purchase the goods), you can usually keep your property without making any more payments on that debt.

Can I Own Anything After Bankruptcy?

Yes!  Many people believe they can not own anything for a period of time after filing for bankruptcy.  This is not true.  You can keep your exempt property and anything you obtain after the bankruptcy is filed.  However, if you receive an inheritance, a property settlement, or life insurance benefits within 180 days after filing for bankruptcy, that money or property may have to be paid to your creditors if the property or money is not exempt.

Will Bankruptcy Wipe Out All My Debts?

Yes, with some exceptions.  Bankruptcy will not normally wipe out:

* Money owed for child support or alimony;

* Most fines and penalties owed to government agencies;

* Most taxes and debts incurred to pay taxes which can not be discharged;

* Student loans, unless you can prove to the court that repaying them will be an “undue hardship”;

* Debts not listed on your bankruptcy petition;

* Loans you got by knowingly giving false information to a creditor, who reasonably relied on it in making you the loan;

* Debts resulting from “willful and malicious” harm;

* Debts incurred by driving while intoxicated;

* Mortgages and other liens which are not paid in the bankruptcy case (but bankruptcy will wipe out your obligation to pay any additional money if the property is sold by the creditor).

Will I Have to Go to Court?

In most bankruptcy cases, you only have to go to a proceeding called the “meeting of creditors” to meet with the bankruptcy trustee and any creditor who chooses to come.  Most of the time, this meeting will be a short and simple procedure where you are asked a few questions about your bankruptcy forms and your financial situation.

Occasionally, if complications arise, or if you choose to dispute a debt, you may have to appear at a hearing.  In a chapter 13 case, you may also have to appear at a hearing when the judge decides whether your plan should be approved.  If you need to go to court, you will receive notice of the court date and time from the court and/or from your attorney.

What Else Must I Do to Complete My Case?

After your case is filed, you must complete an approved course in personal finances.  This course will take approximately two hours to complete.  Many of the course providers give you a choice to take the course in-person at a designated location, over the Internet (usually by watching a video), or over the telephone.  Your attorney can give you a list of organizations that provide approved courses, or you can check the website for the United States Trustee Program office at www.usdoj.gov/ust.  If you can not afford the fee, you should ask the agency to provide the course free of charge or at a reduced fee.  In a chapter 7 case, you should sign up for the course soon after your case is filed.  If you file a chapter 13 case, you should ask your attorney when you should take the course.

Will Bankruptcy Affect My Credit?

There is no clear answer to this question.  Unfortunately, if you are behind on your bills, your credit may already be bad.  Bankruptcy will probably not make things any worse.

The fact that you’ve filed a bankruptcy can appear on your credit record for ten years from the date your case was filed.  But because bankruptcy wipes out your old debts, you are likely to be in a better position to pay your current bills, and you may be able to get new credit.

If you decide to file bankruptcy, remember that debts discharged in your bankruptcy should be listed on your credit report as having a zero balance, meaning you do not own anything on the debt.  Debts incorrectly reported as having a balance owed will negatively affect your credit score and make it more difficult or costly to get credit.  You should check your credit report after your bankruptcy discharge and file a dispute with credit reporting agencies if this information is not correct.

What Else Should I Know?

Utility services–Public utilities, such as the electric company, can not refuse or cut off service because you have filed for bankruptcy.  However, the utility can require a deposit for future service and you do have to pay bills which arise after bankruptcy is filed.

Discrimination–An employer or government agency can not discriminate against you because you have filed for bankruptcy.  Government agencies and private entities involved in student loan programs also can not discriminate against you based on a bankruptcy filing.

Driver’s license–If you lost your license solely because you couldn’t pay court-ordered damages caused in an accident, bankruptcy will allow you to get your license back.

Cosigners–If someone has cosigned a loan with you and you file for bankruptcy, the cosigner may have to pay your debt.  If you file under chapter 13, you may be able to protect cosigners, depending upon the terms of your chapter 13 plan.

How Do I Find a Bankruptcy Attorney?

As with any area of the law, it is important to carefully select an attorney who will respond to your personal situation.  The attorney should not be too busy to meet you individually and to answer questions as necessary.  Contact Consumer Legal Services, LLC for a FREE consultation today!

Financial Calculators

Do you Qualify for Bankruptcy?

  1. Are you frequently late in paying your bills?
  2. Do unexpected expenses cause a serious strain on your finances?
  3. Do you constantly worry about paying your bills on time?
  4. Are you behind on any of your debts?
  5. Has your income decreased in the past six months?
  6. Have your wages been garnished in the last year?
  7. Do you find yourself repeatedly borrowing money to pay off your bills?
  8. Do you owe any back taxes?
  9. Are you unable to make the minimum payment on your credit card bills?
  10. Have you ever been contacted by a collection agency for unpaid debts?
  11. Have you recently been contacted at your home or place of business about unpaid bills?
  12. Has your car been repossessed in the last six months?
  13. Do you currently have any outstanding bounced checks?
  14. Do you regularly charge small items on your credit cards?

If you answered “yes” to any of these questions, you may want to contact us to discuss your options via our free consultation. We can explain the bankruptcy laws and help determine whether Chapter 7 or Chapter 13 bankruptcy is the right course for you. In some cases, we even recommend non-bankruptcy alternatives.

Contact us here for a Free Consultation.

This firm is a debt relief agency. We help people file for bankruptcy relief amongst other things, under the Bankruptcy Code.