Aiken & Aiken, LLC – Attorneys at Law

Can I Sell My Personal Property to Someone for $1 Before I File Bankruptcy?

Michele Aiken — Sun, 27 Jun 2010 17:02:54 +0000

Occasionally, someone facing bankruptcy will transfer ownership of property to someone else (usually a friend or family member) for less than fair market value under the assumption that this transfer will protect the property during bankruptcy. However, if the transfer is done within a certain amount of time from the bankruptcy filing, not only does it not protect the property, such a transfer can be a reason not to grant a discharge in bankruptcy entirely.

Section 548 of the Bankruptcy Code allows trustees to recover property that was transferred for less than fair market value in the two years prior to filing. Additionally, Section 727 denies a Chapter 7 discharge to an individual who transferred property with the intent to hinder, delay or defraud creditors within one year of filing. If you are considering filing for bankruptcy, you should consult with an attorney before transferring or selling any property to make sure that your actions don’t bring about the results you were trying to avoid.

When Can I File Bankruptcy Again?

Sheila Aiken — Tue, 27 Apr 2010 14:11:23 +0000

Life is full of the unexpected, so it frequently happens that individuals need to file for bankruptcy relief more than once in their lifetime. There is no limit to the frequency of bankruptcy filings, but there are limits to how frequently a discharge of debts in bankruptcy is allowed. Generally, the time frames are:

8 years between Chapter 7 filings
2 years between Chapter 13 filings
4 years between a Chapter 7 and a Chapter 13 filing
6 years between a Chapter 13 and a Chapter 7 filing (if the Chapter 13’s payment plan was less than 70%)

The time period is measured from filing date to filing date. However, there may be circumstances where it would be beneficial to file for bankruptcy even if no discharge is available. You should discuss your individual circumstances with a bankruptcy attorney to formulate a plan that is right for you. Please contact our office for additional information or to schedule an appointment.

Should I Repay the Loan from My Parents Before I File?

Michele Aiken — Fri, 05 Mar 2010 14:49:46 +0000

Bankruptcy is based on the proposition that all similarly situated creditors are (or should be) treated equally. In the eyes of bankruptcy, unsecured loans from friends and family members are viewed in the same manner as unsecured loans from credit-granting agencies (such as credit cards). Friends and family members are viewed as “insiders” and any more than nominal payments made to them in the year prior to filing for bankruptcy must be disclosed during the case as a preferential transfer. In that case, the trustee has the option of bringing suit against the insider who received the repayment in order to recover the payment for equal distribution among all your creditors. So, while repaying your family before filing may feel like the right thing to do, it could be the worst thing you can do for them! Please contact our office for more information about preferential transfers or to speak with an attorney about your specific circumstances.

Can Income Tax Debt Be Discharged in Chapter 7 Bankruptcy?

Michele Aiken — Thu, 04 Mar 2010 14:49:01 +0000

You may be able to discharge federal income tax in a Chapter 7 bankruptcy case if the tax debt meets certain criteria:

You must have filed a tax return for the years in question at least 2 years before you file for bankruptcy
Your tax return must have been originally due at least 3 years before you file for bankruptcy
The IRS assessed the income tax debt at least 240 days prior to your bankruptcy filing (with certain exceptions)
Your tax return was not fraudulent
You did not attempt to willfully evade taxes

Discharging tax debt is a complex area with many rules surrounding it. If you are burdened with federal income tax debts, you should consult with a bankruptcy attorney to determine whether, and to what extent, the debt would be dischargeable in bankruptcy.

Do I Need an Attorney to File My Bankruptcy Petition?

Sheila Aiken — Mon, 22 Feb 2010 14:00:56 +0000

If you are an individual (rather than a corporation), you are not required to have an attorney file your petition on your behalf – you can do it yourself (called pro se). The court required documents are usually available on the bankruptcy court’s website. However, you may be doing yourself a disservice by “going it alone”. Filing for bankruptcy includes much more than just filing out forms. It is a complex area of law and there can be significant consequences if the law is not followed – including dismissal without discharge and allegations of fraudulent behavior. Although you may be looking to save the attorney fees up front, it could cost you even more in the long run if you file on your own, run into problems, and then have to pay even more to an attorney to help fix the situation. Even if you don’t choose our firm to represent you, we strongly advise you to seek other competent counsel. Your chances of a successful discharge increase greatly with representation.

Don’t Ignore Your Post-Filing Credit Counseling!

admin — Thu, 11 Feb 2010 16:23:58 +0000

One of the changes that was made in 2005 to the Bankruptcy laws was the inclusion of a credit counseling requirement. Individuals are now required to complete a credit counseling course prior to filing a bankruptcy petition and a personal financial management course after filing a bankruptcy petition. While the pre-filing course is almost impossible to forget (because a certificate of completion generally has to accompany your bankruptcy filing), the post-filing course is not as memorable. However, it is no less important. If you do not complete the post-filing course and file it with the court in a timely manner, your case is closed without a discharge and must be re-opened to file the completed course certificate and receive a discharge. Unfortunately, re-opening the case can cost you additional fees – both court filing fees and attorney fees. Don’t run the whole “bankruptcy marathon” only to stumble at the finish line!

Can I File for Bankruptcy Individually Even Though I’m Married?

Sheila Aiken — Mon, 08 Feb 2010 14:55:48 +0000

Bankruptcy does allow for married couples to file for individual bankruptcy – the better question would be “SHOULD I file individually even though I’m married?”

The decision to file for bankruptcy individually while married should be made carefully after looking at your individual circumstances. Many different factors can impact this decision, such as the number and amount of joint debt, how real estate property is held, and whether you and your spouse maintain separate residences. In some situations, filing individually would be the most beneficial, but not in all cases. Talk with your attorney to determine the pros and cons of filing individually, without your spouse.

Can I Keep Any Property When I File?

Sheila Aiken — Fri, 05 Feb 2010 21:55:40 +0000

Bankruptcy law allows for individuals to keep property from being sold to pay creditors through “exemptions”. In a Chapter 7 filing, any property which is not claimed as “exempt” is potentially available to be taken by the trustee for paying creditor claims. Therefore, prior to a bankruptcy filing, individuals must list their assets as well as the value of the asset or the equity owned in the asset to determine whether the available exemptions are enough to protect all of the assets.

You should consult with an attorney to determine which exemptions are applicable to you and what is the best way to protect as many of your assets as possible during the bankruptcy.

Are Student Loans Dischargeable in Bankruptcy?

Michele Aiken — Wed, 27 Jan 2010 16:23:07 +0000

Generally, student loans are not dischargeable in bankruptcy, unless repaying the student loan causes an “undue hardship”. Unfortunately, meeting the standard of undue hardship can be very difficult. Most courts use a three-part test to determine whether an undue hardship exists:

Whether the debtor could maintain a minimal standard of living for self and dependents if loans were required to be repaid;
If a minimal standard of living cannot be maintained, whether that circumstance is likely to continue for an extended amount of time; and
Whether a good faith effort to repay the loan has been made

Please contact our office to discuss your specific circumstances or to receive additional information about your options under bankruptcy.

Illinois Gestational Surrogacy Act

Sheila Aiken — Mon, 23 Feb 2009 22:28:11 +0000

In 2005, the Illinois Gestational Surrogacy Act went into effect. This Act made Illinois one of the most progressive states with regard to assisted reproductive law.

Some of the requirements of the Act include:

a written contract between the surrogate and the intended parent(s)
at least one of the gametes must be contributed by the intended parent(s)
Intended parents must:
- Provide an affidavit from a Illinois physician certifying that either one or both of the intended parents have a medical need for the surrogacy
- Have undergone psychological evaluations
- Have consulted with independent legal counsel
In order for an individual to be a surrogate, she must:
- Be at least 21 years of age,
- Have given birth to at least 1 other child,
- Have undergone both medical and psychological evaluations,
- Have consulted with independent legal counsel, and
- Have health insurance that covers pregnancy, hospitalizations, major medical treatments, and post-partum care

The Illinois Gestational Act does not apply if the surrogate is also the egg donor. Therefore, to be covered under the law, the intended parent(s) must either contribute the egg or must use the egg of a third party (not the surrogate).

If the Illinois Gestational Act also provides that a parent child relationship between the child and the intended parent(s) may be legally established prior to the birth of the child. In order to establish this relationship prior to the child’s birth, the attorneys for both parties to the agreement must certify that both parties to the agreement intended to comply with the Act and file the certification with the Illinois Department of Public Health.

If you are considering surrogacy as an option, it is vital to consult with an attorney to explore the legal requirements of gestational surrogacy in Illinois. Please contact our office for more information or to speak with an attorney about your individual circumstances.