Lawyers, pay attention—correcting a mistake in bankruptcy papers is going to cost you pretty soon.
Starting Dec. 1, bankruptcy courts will charge $25 to file a motion seeking to redact information from previously filed papers. That means if you forget to slap a black bar over text you don’t want seen by the general public, you’ll have to pay to correct the mistake.
One other new fee will take effect next month, according to the Administrative Office of the U.S. Courts. The existing $157 fee to appeal a bankruptcy court ruling directly to a U.S. Court of Appeals, bypassing the district court, will increase by $50 to $207.
This isn’t the first time bankruptcy has become more expensive this year. On June 1, fee increases took effect for every chapter of the bankruptcy code as well as for filing lawsuits in bankruptcy court. Rather than paying a $46 administrative fee regardless of chapter, the change imposed a $550 fee on filings under Chapter 9, Chapter 11 and Chapter 15, the cases filed by bigger-pocket debtors like municipalities and companies in the U.S. and abroad. Administrative fees for chapters 7, 12 and 13 (the liquidation, family farmer and consumer chapters) increased to $75.
You may hear radio commercials offering the hope of eliminating tax debts in bankruptcy. But it's not as simple as it sounds. Most tax debts can't be wiped out in bankruptcy -- you'll continue to owe them at the end of a Chapter 7 bankruptcy case, or you'll have to repay them in full in a Chapter 13 bankruptcy repayment plan.
If you need to discharge tax debts, Chapter 7 bankruptcy will probably be the better option -- but only if your debts qualify for discharge (see below) and you are eligible for Chapter 7 bankruptcy (see the articles in Chapter 7 Bankruptcy Eligibility Rules).
When You Can Discharge a Tax DebtYou can discharge (wipe out) debts for federal income taxes in Chapter 7 bankruptcy only if all of the following conditions are true:
You Can't Discharge a Federal Tax LienIf your taxes qualify for discharge in a Chapter 7 bankruptcy case, your victory may be bittersweet. This is because bankruptcy will not wipe out prior recorded tax liens. A Chapter 7 bankruptcy will wipe out your personal obligation to pay the debt, and prevent the IRS from going after your bank account or wages, but if the IRS recorded a tax lien on your property before you file for bankruptcy, the lien will remain on the property. In effect, this means you'll have to pay off the tax lien in order to sell the property.
For More InformationTo find out more about which debts you can eliminate in bankruptcy, see The New Bankruptcy: Will It Work for You? by Stephen Elias (Nolo).
Updated by: Kathleen Michon, J.D.
Trump Casino Turns to Christie as Icahn Seeks State Aid By Christopher Palmeri and Terrence Dopp Oct 15, 2014 2:22 PM MT
Saving Atlantic City’s Trump Taj Mahal casino and its almost 3,000 jobs may now rest with New Jersey Governor Chris Christie.
Trump Entertainment Resorts Inc., the bankrupt casino operator that owns the Taj Mahal, has turned to state officials after the cash-strapped city rebuffed its effort to get $175 million in property tax abatements.
Trump Entertainment has asked Jon Hanson, chairman of the New Jersey Gaming, Sports and Entertainment Advisory Commission, to put together a package of state funds to keep the casino open, William Hardie, an adviser to the company, said at a bankruptcy court hearing yesterday. Trump Entertainment has said it may close its remaining casino next month without tax relief and labor concessions.
The request puts Christie, a Republican considering a run for president in 2016, in the position of having to back the tax breaks or see a prominent business close. Three years ago, Christie supported $261 million of incentives for Atlantic City’s Revel casino, which went bankrupt twice, closed on Sept. 2 and may reopen under new management.
Kevin Roberts, a spokesman for Christie, said he couldn’t comment on Trump Entertainment’s proposal without knowing the specifics. Revel, he said, never received taxpayer money because it didn’t turn a profit, a condition of its incentive.
‘Finite Dollars’ Hanson, founder and chairman of the Morristown, New Jersey, development firm Hampshire Cos., said Trump has inquired about subsidies and that there have been no negotiations. He said it’s possible a deal could be worked out on tax incentives.
“There are finite dollars available in Atlantic City, and most of those dollars are being geared toward attracting non-gaming facilities,” Hanson said in an interview today. “There’s no major pile of dollars sitting there waiting for people.”
The governor must weigh the importance of Atlantic City’s tourism industry against opposition to Trump Entertainment’s requests, voiced by some state lawmakers, including Democratic Senate President Stephen Sweeney, at a protest last week in Atlantic City.
“The Jersey shore is iconic,” said Israel Posner, executive director of the gaming and hospitality institute at Richard Stockton College of New Jersey. “This is a very political season with an election coming up in November and a governor who’s in the news.”
Casinos Close The state commission, which consists of seven members appointed by the governor, is charged with developing recommendations for Christie to address casino and entertainment related issues, according to a state website.
Trump Entertainment, founded by -- yet no longer run by -- Donald Trump, declared bankruptcy last month as gambling revenue in Atlantic City shrank. The company closed the Trump Plaza casino and said it may shutter the Taj Mahal next month.
U.S. Bankruptcy Judge Kevin Gross said yesterday he would rule Oct. 17 on whether the company can scrap its collective-bargaining agreement with workers.
In a plan submitted to the court last month, Trump Entertainment said entities controlled by Carl Icahn, its largest creditor, would invest $100 million in the company provided that the company get the concessions.
Credit Downgrade The company sought property tax relief of about $30 million a year over five years from local officials, and $25 million from the Casino Reinvestment Development Authority, a state-sanctioned development agency.
Atlantic City Mayor Don Guardian opposes lowering the tax assessments of Trump Entertainment’s casinos and plans to review valuations in 2016, according to his chief of staff, Chris Filiciello. Trump Entertainment is seeking to reduce the assessed value of the Taj Mahal to $300 million from $1 billion and the Plaza to $40 million from $248 million.
The city had its credit rating cut one level to BBB+ by Standard & Poor’s last month after four of 12 casinos closed this year, crushed by out-of-state gambling competition.
“The city can’t afford those requests,’ Filiciello said.
To contact the reporters on this story: Christopher Palmeri in Los Angeles at email@example.com; Terrence Dopp in Trenton at firstname.lastname@example.org
To contact the editors responsible for this story: Anthony Palazzo at email@example.com Stacie Sherman, Mark Schoifet
GT Advanced Secret Cash Fund Bid Is Assailed by Trustee By Dawn McCarty and Phil Milford Oct 20, 2014 9:23 AM MT
GT Advanced Technologies Inc. (GTATQ), the maker of synthetic sapphire used to strengthen smartphone screens, was accused by the U.S. Justice Department’s bankruptcy watchdog of trying to strong-arm creditors with a secret $25 million fund.
GT Advanced’s lawyers filed a motion to pay creditors they won’t identify and in fact “seek the creation of a pool of funds to be used at will, free from oversight by the court,” U.S. Trustee William K. Harrington wrote in papers filed yesterday in U.S. Bankruptcy Court in Manchester, New Hampshire.
“By keeping the identities of the purported critical vendors secret, the debtors attempt to create leverage over a broad range of creditors, using the prospect of payment as a carrot and the lack of public information regarding proposed payment amounts as a stick to negotiate more favorable terms,” Harrington wrote.
“The requested fund of $25 million is large enough in comparison to total trade debt to entice creditor compliance, but limited enough to enable the debtors to negotiate discounts with vendors,” he wrote.
He called the company effort an “attempt to mislead” creditors and “an affront to the inherent fairness of the bankruptcy process.”
Secret Information The Merrimack, New Hampshire-based company stunned the investment community when it filed for bankruptcy without specifying why. GT Advanced said it needed to keep certain aspects of the case secret to avoid breaching terms of confidentiality agreements that carry penalties of as much as $50 million per violation.
GT Advanced in November announced a multiyear agreement to supply Apple with sapphire. The company lined up $578 million in prepayment loans from Apple to pay for the equipment to make the material, which wasn’t included in the latest version of the iPhone. The final payment of about $139 million was expected this month.
A hearing on GT Advanced’s bid to shut down its synthetic-sapphire operations while keeping details of the bankruptcy under wraps will be held tomorrow in Springfield, Massachusetts.
U.S. Bankruptcy Judge Henry Boroff will also consider Apple’s request to file under seal its objections to GT Advanced’s bids to reject certain contracts and leases as well as approval to pay an employee incentive plan. Boroff will also consider final approval of the request to pay critical vendors.
GT Advanced listed assets of $1.5 billion and liabilities of $1.3 billion as of June 28 in a Chapter 11 filing on Oct. 6.
The case is In re GT Advanced Technologies Inc., 14-11916, U.S. Bankruptcy Court, District of New Hampshire (Manchester).
To contact the reporters on this story: Dawn McCarty in Wilmington, Delaware, at firstname.lastname@example.org; Phil Milford in Wilmington, Delaware, at email@example.com.
To contact the editors responsible for this story: Andrew Dunn at firstname.lastname@example.org. Charles Carter
Former supermodel Janice Dickinson is reportedly filing for personal bankruptcy, according to a report this week from the Huffington Post.
Sources say the 58-year-old model, who has appeared in several reality television shows in recent years, told the bankruptcy court that she owes nearly $1 million in debt to several different creditors.
According to sources, a visibly upset Dickinson told reporters that she has "had some trouble" with her finances, but that she is "taking every step to pay everyone back" and feels "terrible about it."
The former supermodel, who has had a series of operations to update her appearance, reportedly owes a significant amount of money to the doctors who have helped modify her body.
Sources report that Dickinson owes roughly $8,000 to Arnold Klein, a Beverly Hills dermatologist who invented the use of Botox to defeat wrinkles, according to his website.
She also reportedly owes a similar amount of money to Dr. Uzzi Reiss, a moderately famous doctor who leads the Beverly Hills Anti-Aging Center, where Dickinson also allegedly received treatment.
But these debts pale in comparison to her overwhelming tax debts, which are much harder, although not impossible, to discharge in bankruptcy court.
Sources note that Dickinson has allegedly failed to pay taxes for more than a decade, and reportedly owes more than $500,000 to New York, California, and the federal government.
If these are income taxes, and her failure to pay was not a result of fraud, Dickinson may be able to eliminate some of her tax debt, but it's more likely that she'll be able to take a bite out of her medical debts through the bankruptcy process.
Dickinson's financial troubles have coincided with her fall from national prominence. In the 1970s, Dickinson gained fame as the world's first supermodel, according to several sources. Years later, she revived her career by starring as a judge on "America’s Next Top Model."
Dickinson notably spoke her mind freely on the show, criticizing fashion luminaries like Anna Wintour, Lady Gaga, and Tyra Banks with great zeal.
Student Loan Debt in Bankruptcy Usually you cannot wipe out student loans in bankruptcy, but there is one exception
Most debtors will not be able to discharge (wipe out) student loan debt in Chapter 7 or Chapter 13 bankruptcy. However, if you can prove that repaying your student loans would cause an undue hardship to you, you can get rid of your student loans in bankruptcy.
The Undue Hardship ExceptionIn order to have your student loans wiped out in bankruptcy, you must demonstrate that it would be an undue hardship for you to pay them. The test for determining undue hardship varies between courts.
Regardless of the test used, most courts are reluctant to discharge student loans. However, if you have very low income or your loans are from a for-profit trade school, you may have a better chance.
The Brunner TestSome courts use the Brunner test. Under this standard, you can discharge your student loans if you meet all three of these factors:
Note. There is a special test for Health Education Assistance Loans (HEAL). You must show that the loan became due more than seven years ago and repayment would impose an "unconscionable" burden on your life.
Other TestsOther courts use other tests. To find out what test or tests are used in your jurisdiction, talk to a local bankruptcy attorney.
Discharging All or Part of Your Student LoansMany courts look at the undue hardship test as all or nothing – either you qualify to get the whole loan discharged, or you don’t. Other courts have discharged a portion of a debtor’s student loan.
Procedure to Discharge Your Student Loans in Bankruptcy If you want to try to discharge your student loans in bankruptcy, you must file a formal complaint with the bankruptcy court, called a Complaint to Determine Dischargeability. It’s then up to you to prove to the court that payment of your loans will cause an undue hardship on you.
Raising Defenses to Student Loan Debt in BankruptcyYou may have defenses to payment of your student loan debt, particularly if you attended a vocational or trade school. Examples include breach of contract, unfair or deceptive business practices, or fraud. You can raise these defenses in the creditor's Proof of Claim. If you succeed, you won't owe the debt at all, making the dischargeability issue moot.
Consider Consulting With an AttorneyThere are lots of court cases that apply the Brunner test or other standards to Chapter 7 and Chapter 13 debtors. Knowing what the courts in your jurisdiction have done in the past could help you determine the likelihood of your success. If you have a substantial amount of student loan debt and do not have an attorney, it might be worthwhile to consult with a local bankruptcy attorney about this issue. And if you decide to litigate either the dischargeability issue or a defense to the loan in bankruptcy court, you’ll most likely need an attorney to represent you. (You can find one using Nolo's Lawyer Directory.)
What Happens If Your Student Loans Are Not Discharged?If, as in most cases, your loans are not discharged in bankruptcy, here’s what happens.
Chapter 7 bankruptcy. In Chapter 7 bankruptcy, if payment of your loans is not an undue hardship, you’ll still owe them when your bankruptcy case is over.
Chapter 13 bankruptcy. If you can't discharge your student loans, Chapter 13 bankruptcy provides some other ways that can help. For example, you may be able to pay a reduced amount during your Chapter 13 plan -- although you'll be on the hook for whatever amount is left after your repayment period ends. For detailed information on how Chapter 13 can help with student loans, see Nolo's article Student Loans in Chapter 13 Bankruptcy.
Other Options for Dealing With Student LoansThere are nonbankruptcy methods for dealing with student loan payments, from reducing payments to possibly even cancelling them. To learn more, check out Nolo’s Student Loan Debt area.
by: Kathleen Michon, J.D.
I practice in the Washington, DC area. Lots of my clients work for federal agencies and contractors who require security clearances as a condition of their employment. The first question they ask when them come to see me is whether a bankruptcy filing will cause them problems with their security clearance. The short answer I give: No, it will not.
This causes surprise, in large measure because of the urban legends about bankruptcy that just aren’t true. But why won’t bankruptcy have a negative impact on a security clearance? The reason is simply because bankruptcy makes you less of a security risk.
What makes someone a security risk? According to the Department of Defense, “The purpose of a security clearance is to determine whether a person is able and willing to safeguard classified national security information, based on his or her loyalty, character, trustworthiness, and reliability.” “All available, reliable information about the person, past and present, favorable and unfavorable, is considered in reaching a clearance determination. When an individual’s life history shows evidence of unreliability or untrustworthiness, questions arise whether the individual can be relied on and trusted to exercise the responsibility necessary for working in a secure environment where protection of classified information is paramount.”
Under this standard, it is not the bankruptcy itself that potentially could cause a problem, but the reasons the person files for bankruptcy. For example, if you run a Ponzi scheme, or if you defraud people, or if you committed criminal acts, and file bankruptcy as a result, this could be a problem. But if your or a family member’s illness caused financial problems, or if you were out of work or had your wages cut, or if you got divorced (events that cover almost 90% of all consumer bankruptcies), these don’t impact your reliability or trustworthiness and a bankruptcy that results won’t impact your clearance.
I have represented people who work at DOD, DIA, CIA, NSA and the White House, as well as every branch of the military. I have represented people with every possible security clearance, from Confidential to Top Secret (and the other clearances that have only letters and numbers describing them). NOT ONE has told me that a bankruptcy filing had any impact whatsoever on their security clearance, their job, or their advancement. I have even had clients tell me that their security officer told them that they needed to file for bankruptcy or they would lose (or not get) their clearance! The only requirement is that you tell your security officer before you file so that they know you are not trying to hide anything. They already know that you’re in financial difficulty–bankruptcy shows that you’re addressing the problem and fixing it.
And this makes sense. Bankruptcy allows you to deal with your debt. It allows you to eliminate it, restructure it, and pay it. It enhances your reliability and trustworthiness, and makes you less of a risk that someone will offer to take care of your financial problems in exchange for your password.
So if you are worried that you’ll lose your security clearance if you file bankruptcy, don’t. It will actually help.
Filing for Bankruptcy in Colorado Get information on the forms and process to file for bankruptcy in Colorado
Filing for bankruptcy in Colorado? Although most of bankruptcy (including the filing process) is governed by federal law, there is some Colorado-specific information you will need to file for bankruptcy. Much of this information you can get online. Here's how.
(For more articles on the filing process, see Filing for Bankruptcy.)
Pre-Bankruptcy Credit Counseling and Pre-Discharge Debtor Education in ColoradoIn order to qualify for Chapter 7 or Chapter 13 bankruptcy, you must show that you received credit counseling from an agency approved by the U.S. Trustee in Colorado within the six month period before you file for bankruptcy. You’ll also have to take a debtor education course before you get a bankruptcy discharge. (To learn more about this requirement, including the rare exceptions, see Credit Counseling & Debtor Education Requirements in Bankruptcy.)
You can find the list of approved Colorado credit counseling agencies here.
You can find the list of approved Colorado debtor education agencies here.
Colorado Bankruptcy ExemptionsColorado has a set of bankruptcy exemptions which help determine what property you get to keep in Chapter 7 bankruptcy, and play a role in how much you repay unsecured creditors in Chapter 13 bankruptcy. (To learn more, see our Bankruptcy Exemptions area.)
Unlike in some states, Colorado does not allow debtors to use the federal bankruptcy exemptions. If you file for bankruptcy in Colorado, you'll have to use the Colorado state exemptions.
To learn about Colorado’s exemptions for your home and car, see The Homestead Exemption in Colorado and The Motor Vehicle Exemption in Colorado. To find other Colorado exemptions, visit our Bankruptcy Exemptions area.
Completing the Bankruptcy Forms in ColoradoWhen you file for Chapter 7 or Chapter 13 bankruptcy, you must complete a bankruptcy petition, a number of schedules containing detailed information about your finances, and several other forms, including a lengthy form known as the “means test” (for Chapter 7) and a similar form for Chapter 13.
(For a list of the forms you must complete, see The Bankruptcy Forms: Getting Started.)
Getting and Completing the Official Bankruptcy FormsFor more information about each of the official forms, including how to find them, see Completing the Bankruptcy Forms.
Finding Means Test Information for ColoradoWhen you file for bankruptcy in Colorado, you must compare your income to the median income for a household of your size in Colorado. If your income is less than the median, you will be eligible to file for Chapter 7 and, if you choose to file for Chapter 13, you can use a three-year repayment plan (rather than five years). This is called the means test.
If your income is above Colorado’s median income, you still might qualify for Chapter 7, but you’ll have to provide detailed information about your expenses and payments on secured debts in order to find out. Most Chapter 13 filers also have to provide this information.
For information about each of these forms, see:
Form 22A – Statement of Current Monthly Income and Means Test Calculation (for Chapter 7), and
Form 22C – Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income (for Chapter 13).
Here’s how to find the Colorado-specific figures for these means test forms:
Colorado median income figures. For a one-person household in Colorado, the median income is $47,361. For a family of three, the Colorado median income is $69,252. These figures change periodically. You can find the most current figures for each household size here.
Example. John’s annual income is $40,000. He lives alone. He will automatically pass the means test because his income is below $47,361.
Standard deductions. Forms 22A and 22C have a comprehensive list of expense categories, such as housing, transportation, food, and childcare. For some of those categories (like childcare), you provide the actual amount you spend. For others, you plug in a predetermined amount -- sometimes that figure is standard for the whole country, other times it varies by county or region.
You can find all of the Colorado state, county and region-specific figures you’ll need for Forms 22A and 22C on the U.S. Trustee’s website at www.justice.gov/ust. Click on “Bankruptcy Reform” and then “Means Testing Information.”
Example. In Colorado, the standard amount you list on your bankruptcy papers for housing varies by county. For example, if you live in Jefferson County, your mortgage or rent deduction is $1,239 for a one-person household. But if you live in Lincoln County, the deduction is $678. You can find housing expense standards for each Colorado county here.
Getting Local Bankruptcy FormsSome judicial districts and bankruptcy courts require bankruptcy filers to complete additional “local forms.” To find out if your court requires additional forms, contact the bankruptcy filing clerk. Some courts post these forms online on the court’s website. (Below you’ll find a link to Colorado’s bankruptcy court.)
Filing in the Colorado Bankruptcy CourtSince there is only one bankruptcy court in Colorado (see below for the link), you don’t need to worry about the rules for filing in the correct court.
You can use the Court Locator tool on the U.S. Trustee’s website to find bankruptcy court locations and websites. The Colorado Bankruptcy Court website is www.cob.uscourts.gov.
The bankruptcy court in Colorado is located in Denver.
by: Mher Asatryan, Contributing Author
Got your bankruptcy discharge?
Great! You’re on your way to a fresh start.
Now you’ve got work to do.
◊ List the debts that didn’t get discharged. Family support, recent taxes, student loans, or taxes for years for which you haven’t filed bankruptcy are not dischargeable in bankruptcy. The discharge order doesn’t say what debts survive.
◊ Verify lien balances The discharge eliminates your personal liability for dischargeable debts; liens survive. If you plan to keep a house or car encumbered with liens, find out what you owe and resume payments. Otherwise, the creditor can enforce its lien by foreclosure or repossession.
◊ Rearrange banking Online banking and automatic bill pay may have been disabled while you were in bankruptcy.
◊ Set up automatic savings Bankruptcy probably brought home to you how little net worth you have and how thin the safety net is. Arrange for automatic savings for both an emergency fund and for retirement.
◊ Save your bankruptcy papers- You’re nearly certain to encounter efforts by buyers of zombie debt to collect debts that have been discharged in your case. You need to be able to show that the debt was scheduled in your case. Creditors with notice, and those they sell their worthless accounts to without notice, were discharged.
◊ Join a credit union Credit unions are owned by their members. They are in business to make loans to members. Rates are usually better than the banks, and the profits flow to members. About the only kinds of credit I’m enthusiastic about are car loans and home loans. Plan to be eligible to apply for a loan by joining now.
◊ Check insurance coverage If you elected to surrender property through the bankruptcy that still stands in your name, make sure that you are insured for liability. Liaibility insurance covers you for claims of anyone injured on your property. Electing to surrender property doesn’t take you off title til someone else goes on title. Don’t let post bankruptcy claims arising from property you’re trying to get rid of spoil your fresh start.
◊ Pull a credit report Several months after your discharge, check your credit report to make sure all discharged debts reflect a zero balance. The ugly history can properly remain, but you are entitled to a showing that you now owe nothing.
Take advantage of the opportunity that bankruptcy has provided, and go forth and prosper. Good luck.
My name is Nanci Rogers and I have been a Bankruptcy Petition Preparer since 2009. I live in Beautiful Colorado Springs and enjoy helping others.
This document was created using a Contractology template available at http://www.freenetlaw.com.
This website contains general information about legal matters. The information is not advice, and should not be treated as such.
Limitation of warranties
The legal information on this website is provided “as is” without any representations or warranties, express or implied. Affordable Bankruptcy Solutions makes no representations or warranties in relation to the legal information on this website.
Without prejudice to the generality of the foregoing paragraph, Affordable Bankruptcy Solutions does not warrant that:
You must not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.
If you have any specific questions about any legal matter you should consult your attorney or other professional legal services provider.
You should never delay seeking legal advice, disregard legal advice, or commence or discontinue any legal action because of information on this website.
Nothing in this legal disclaimer will limit any of our liabilities in any way that is not permitted under applicable law, or exclude any of our liabilities that may not be excluded under applicable law.
I am a Bankruptcy Petition Preparer. I cannot give any advice. I am a non- attorney debt resolution service. I am a typist customers have to provide instruction.
*Pursuant to 11 U.S.C. §528 I am a non-attorney debt relief service.