Every few months, the income figures used to determine whether or not a person qualifies to file Chapter 7 bankruptcy are adjusted. The current means test income figures that have been in effect since November 1, 2009 will be changing March 15, 2010.

My review of the new numbers reveals that it will be a little harder for Oklahomans to qualify for Chapter 7 bankruptcy on March 15 compared to today. This is because the new median income figures are lower than the prior income figures for Oklahoma households of all sizes.

The new median income figures for Oklahoma households are:

• $38,929 (1 person household)
• $50,710 (2 person household)
• $54,328 (3 person household)
• $61,816 (4 person household)

*Add $6,900 for each individual in the household over 4 for cases filed from March 15 through March 31, 2010.

*Add $7,500 for each individual in the household over 5 in cases filed on April 1, 2010 or thereafter.

If a person’s household income falls below these income levels, he/she passes the Means Test and automatically qualifies to file a Chapter 7 bankruptcy.

Most types of income are counted toward these figures, but a few types of income are excluded such as Social Security income.

A person whose household income exceeds these figures may still qualify for Chapter 7 bankruptcy if he/she has enough allowable expense deductions to offset his/her above median income.

A person who fails the Means Test and does not qualify to file Chapter 7 bankruptcy may choose to file a Chapter 13 bankruptcy instead.

I get a lot of telephone calls and emails from people wanting to know how much I charge for a bankruptcy. I usually tell them that’s like calling up a car dealer and asking how much it costs to buy a car. The price depends on a lot of factors.

My attorney’s fee is set based on the specifics of a person’s case. I charge less for a “routine” case and the price increases as the complexity of the case increases.

One thing I can guarantee is that if a person is looking for the cheapest bankruptcy attorney in town, I’m not him. But I’m also not the most expensive either.

Here’s something you should be aware of. The current recession is causing a lot of good people to struggle financially. And bankruptcy filings are on the increase. So attorneys who are themselves struggling financially are attracted to what they see as the latest hot area of law – bankruptcy. This means that attorneys with little bankruptcy experience are jumping into the practice of bankruptcy law and undercutting the fees charged by experienced bankruptcy attorneys.

So understand that I won’t cut my attorney’s fee just because I’m told that another bankruptcy lawyer will do it for less money. I don’t compete on price.

If you’re considering hiring a bankruptcy attorney solely based on who quotes you the cheapest price, be careful. Be very careful.

Some areas of the law are more complex than others. Bankruptcy is one of the more complex areas. You have a lot riding on whether or not your case is handled properly. Mistakes can have huge negative consequences. This is an area where the saying “you get what you pay for” holds true.

Filing bankruptcy is not just filling out some paperwork, and filing some forms, and going to court once or twice. While it sometimes can appear that there’s not too much to filing a bankruptcy case, that’s because a competent, knowledgeable, experienced bankruptcy attorney knows what to do and makes it look easy.

Just like the practice of medicine is complex and specialized, so is the practice of law. Make sure you hire a bankruptcy attorney with experience in bankruptcy. You wouldn’t go to a podiatrist (foot doctor) for heart surgery, and you shouldn’t hire a divorce lawyer or a personal injury lawyer or a worker’s compensation lawyer to represent you in bankruptcy.

And just like you probably wouldn’t want to be a heart surgeon’s first patient, even if he quoted you the cheapest price in town, you really don’t want to be the client of an inexperienced bankruptcy attorney, even if the price seems like a real bargain.

Here are several questions that I suggest you ask the attorney you are considering hiring to represent you in bankruptcy. An experienced bankruptcy attorney who cares about his or her client, will not mind answering these questions:

1. How long have you practiced bankruptcy law?
2. What percentage of your practice is devoted to bankruptcy?
3. How many bankruptcies cases have you filed since the bankruptcy laws were changed in 2005?
4. Does the local bankruptcy judge(s) know who you are?
5. Can you name the Chapter 7 trustees and do they know who you are?
6. Can you name the Chapter 13 trustee and does he know who you are?
7. Can you name the Assistant U.S. Trustee and does she know who you are?
8. Are you a member of the bankruptcy sections of the Oklahoma Bar Association and your county bar association?
9. Are you a member of any national bankruptcy organizations? (You want an attorney who is a member of the National Association of Consumer Bankruptcy Attorneys).

If the bankruptcy attorney you are considering hiring cannot answer these questions comfortably and to your satisfaction, you probably should keep looking for an attorney who can.

If you’re struggling with too much debt and have questions about bankruptcy, contact me today to schedule a FREE initial telephone consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. Or just give me a call at 918-615-8260. I’ll answer all of your questions in plain English so that you can make a wise decision regarding what would be best for your personal situation.

PepsiCo announced last Thursday that it is closing its two-year old Gatorade plant located in Pryor’s Mid-America Industrial Park. The company has already stopped regular production work at the plant and plans to wind down operations during the next three months.

Pepsico says all of the approximately 100 employees will receive three months and one week of full pay with benefits plus outplacement services.

The Pryor facility was the largest of Gatorade’s nine manufacturing plants and produced both Gatorade and Propel Fitness Water drinks.

There had been two previous rounds of layoffs at the Pryor plant as 22 employees were let go in October 2008 and another 87 received pink slips in December 2008.

Source: Tulsa World and NewsOn6

One of the things I am committed to doing as an Oklahoma attorney is staying up-to-date on the law and the different remedies available to Oklahoma consumers. To do that, I spend many days each year attending local and national legal seminars where I learn from the best and the brightest legal minds from all across the nation.

Last Friday, I got up very early and drove to Oklahoma City for an all-day legal seminar called “Defending Foreclosures in Oklahoma” which was jointly sponsored by the Oklahoma Bar Association and Legal Aid Services of Oklahoma.

The seminar’s speaker was fellow NACBA member and Jacksonville, Florida legal aid attorney April Charney. Over the past ten years, she’s waged a battle against foreclosures and in the process became a nationally recognized expert, a superstar among her peers, feared by mortgage lenders and loved by desperate homeowners.

On an aside, April worked for legal aid in Fayetteville, Arkansas at the same time that I was a college student at the University of Arkansas in Fayetteville, so we had an enjoyable conversation about the Razorbacks and our days spent in northwest Arkansas.

Ms. Charney is on a mission to train an army of foreclosure defense lawyers across the nation to protect millions of Americans from illegal fore­closures. Since 2007, she has conducted seminars from coast-to-coast and trained thousands of lawyers in the process.

“Lawyers don’t go to law school to fight foreclosures,” she said. “It’s a special skill set. Even most judges aren’t familiar enough with this because so few homeowners go into court.”

Ms. Charney said her crusade was born out of experience. Over and over again, she said, in her cases and those of other attorneys she met, she found sloppiness, deception, and outright fraud – including forged signatures – in the nation’s mortgage lending industry. Regardless of why her clients have been unable to pay their mortgages, she maintains that nobody deserves to lose a home to the unethical and illegal foreclosure procedures that she claims are now being used by many banks, mortgage companies and loan servicers.

Also in the crowd were a number of Oklahoma attorneys who are personal friends of mine even though they represent “the dark side” i.e. the banks, mortgage companies and loan services. They were there to keep an eye on the opposition. They were putting into practice what Sun Tzu, that famous Chinese general and military strategist said: “Keep your friends close and your enemies closer.”

You’ve probably heard the saying “it was like trying to drink from a firehose.” That’s what this seminar was like. Deep, thick, and difficult to understand ideas and processes. At the beginning of the seminar, Ms. Charney herself warned “This is very dense, complicated work. “If you don’t get it, raise your hand and ask questions because the chances are others don’t get it either.”

Some of the topics that we covered in the 8 hours we were together include:

• How the mortgage industry operates, including securitization, trusts, and residential mortgage-backed securities;
• Understanding loan documents, origination, and the closing process;
• Servicing problems and post origination issues;
• Common law/state law causes of action and affirmative defenses;
• Drafting discovery/motion practice;
• Federal laws that govern mortgage origination and servicing;
• Post-origination issues, including attorneys’ fees;
• Role of bankruptcy and foreclosure.

Ms. Charney receives no money for these seminars and insists that all participants donate 20 hours of pro bono (free) work to their local legal aid organization. This will help me accomplish one of my New Year’s resolutions of increasing my charitable legal work.

Many of the people who contact me to talk about debt problems have already talked with at least one other bankruptcy lawyer. And many of the stories I hear aren’t good.

It seems that a lot bankruptcy attorneys have a terrible “bedside manner.” Some come across as arrogant. Others act like they’re doing you a favor just to talk with you. Most talk down to you.

By the time you get up the nerve to actually call a bankruptcy lawyer, things have gotten pretty bad in your life. Yeah sure, things could probably be worse. But the truth of the matter is, you’re situation sucks.

You’ve got a lot of bills that you can’t pay. You don’t answer your phone because you’ve got bill collectors calling you day and night. You’re irritable. You aren’t sleeping well. If you’re married, you’re probably fighting with your spouse. You feel bad that you can’t do things for your kids that you’d like to do.

Does that sound familiar?

And then you finally get up the nerve to call a bankruptcy lawyer and guess what? He or she actually makes you feel worse! What’s up with that?

That bankruptcy lawyer may know the bankruptcy laws inside and out, but if he or she doesn’t seem the least bit concerned with you as a person, that should be a red flag to you.

Now many of my fellow bankruptcy lawyers will disagree with me. They believe that their job is simply to provide competent legal representation and nothing more. But I think that attitude is short-sighted.

A good bankruptcy attorney is not only legally competent but also understands and empathizes with what you’re going through. The stress. The fear. The guilt. The shame. The anger. And the depression.

A good bankruptcy lawyer should show some concern about you as a person and work hard to make you feel better about both your present situation and your future.

Now having said all that, let me say that I don’t have a crystal ball and I can’t predict the future. While I can make debt that you can’t pay go away, I can’t guarantee that everything in your future will be a bed of roses.

With the economy in a major recession and with credit guidelines getting tighter and tighter, even those with good credit are having problems refinancing mortgages or getting a car loan at a decent interest rate.

I certainly won’t pretend to know what the future holds. No one but God knows that.

But I can get you out from under the mountain of debt that you feel buried under. I can jump into the sea of debt in which you are drowning and pull you back to shore.

I can help you get a financial fresh start. I can help you get your financial life back on track. I can help you begin to experience some peace in your financial life. And that’s probably what you’re looking for.

Forget all of the legal mumbo-jumbo about Chapter 7 and Chapter 13 and automatic stays and reaffirmation agreements and discharge orders. While those things have their place, your highest concern right now is just being able to know that you have hope for a fresh start.

For now, concentrate on that. Don’t worry yourself about how soon you’ll be able to buy another house or car. What you need to focus on right now is getting out of the mess you’re currently in and gaining some stability in your finances. Once you’ve done that, then you can begin to think about those other things when the time is right.

For now, think about being able to get the bill collectors to stop calling you. Think about not having to worry anymore about being sued and having your wages garnished.

Wouldn’t it be nice to stop fighting with your spouse about overdue bills? Wouldn’t it be great to get a good night’s sleep again?

I understand those things. I deal with it every day. But I understand not just because it’s my job, but also because of personal experience. I’m a lot like you. Really. I’m a regular guy. I have many of the same concerns that you do – about money, and family and the future.

And that’s why I’m really good at what I do. That’s why my clients aren’t just a number to me. That’s why when push comes to shove, I’ll fight hard for you with your creditors, your trustee and your judge.

If you’re struggling with too much debt and have questions about bankruptcy, contact me today to schedule a FREE initial telephone consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. Or just give me a call at 918-615-8260. I’ll answer all of your questions in plain English so that you can make a wise decision regarding what would be best for your personal situation.

Back in December, the qualification dates for existing tiers of unemployment benefits were extended for an additional two months. This extension is up at the end of February which means that unless another extension is made, millions of unemployed workers will lose their unemployment benefits over the next few months.

The National Employment Law Project (NELP) released a new report last week showing that …

1.2 million jobless workers will become ineligible for federal unemployment benefits in March unless Congress extends the unemployment safety net programs from the American Recovery and Reinvestment Act (ARRA). By June, this number will swell to nearly 5 million unemployed workers nationally who will be left without any jobless benefits.
…
Currently, 5.6 million people are accessing one of the federal extensions (34-53 weeks of Emergency Unemployment Compensation; 13-20 weeks of Extended Benefits, a program normally funded 50 percent by the states).

The following graph is based on the January employment report and shows the number of workers unemployed for 27 weeks or more …

The blue line is the number of workers unemployed for 27 weeks or more. The red line is the same data as a percent of the civilian workforce.

According to the BLS, there are a record 6.31 million workers who have been unemployed for more than 26 weeks (and still want a job). This is a record 4.1% of the civilian workforce. (note: records started in 1948).

Source: Calculated Risk Blog

Tulsa-based Homeland Federal Mortgage has closed for business.

The mortgage company’s officers, Daniel & Laura Newberry, filed a personal Chapter 7 bankruptcy on February 5th in the U.S. Bankruptcy Court for the Northern District of Oklahoma.

Homeland Federal’s president, Dan Newberry, who also is an Oklahoma state senator, said the closing of his mortgage company and his bankruptcy filings is a “severe reminder that no one is immune to the current economic crises afflicting our nation.”

Newberry started his mortgage company at his home in 2003 with only two employees. When it ceased operations at the end of December, the company had grown to seven employees and was located in a suite at 5800 E. Skelly Drive.

For a short time, the business had a presence in Oklahoma City and considered the possibility of opening in other states. In 2006, though, the company decided to pull back and focus on its home market of Tulsa, according to Newberry.

“We have survived the ‘mortgage meltdown’ which began in 2006 while many of our competitors closed their doors,” Newberry said. “However, recent federal legislative initiatives that favor big banks have made it increasingly difficult for small family-owned businesses like ours to survive. Their actions have led to reductions in available funds to lend, approvable borrowers, and a significant increase in the time it takes to close a home loan. This combined with a weakening economy has forced us to close our company.”

Newberry noted that according to some reports, more than 70 percent of mortgage brokers in Oklahoma did not renew their licenses between 2006 and mid-2009.

Source: Tulsa World

If you received unemployment benefits last year, remember in preparing your 2009 tax returns that the first $2,400 of those unemployment benefits is tax-free income.

Under last year’s American Recovery and Reinvestment Act (ARRA), every person who received unemployment benefits during 2009 is eligible to exclude the first $2,400 of these benefits when they file their income tax return this year.

For a married couple, the exclusion applies to each spouse individually.

Source: IRS.gov

Can payroll or employment tax liability be discharged in bankruptcy? It depends.

Payroll or employment taxes are comprised of two parts:

1. 1. the employer portion, and
   2. the employee portion.

Employer Portion of Payroll Taxes is Dischargeable – Sometimes.

The employer portion of the payroll tax is the tax which the employer owes directly to the IRS. The employer portion includes the employer’s obligation to match the employee’s 6.2% social security tax and the 1.45% Medicare tax.

The employer portion of the employment tax can be discharged in bankruptcy if:

1. there are more than three years between the date the 941 tax return was last due, including extensions, and the date that the bankruptcy was filed;
2. there are more than two years between the date the 941 tax return was filed and the date the bankruptcy case was filed; and
3. the employer did not willfully evade payment of the tax.

Employee (Trust Fund) Portion of Payroll Taxes is Never Dischargeable.

The employer is required to withhold the employee portion aka “trust fund” portion from the employee’s pay check and remit it to the Internal Revenue Service (IRS).

The employee portion of the tax is referred to as a trust fund tax because the employer is collecting the employee paid portion of the payroll tax from the employee in the capacity of a trustee for the IRS.

The employee paid portion of the payroll tax includes the 6.2% Social Security tax and the 1.45% Medicare tax.

Trust fund taxes are never dischargeable in Chapter 7 bankruptcy.

And in Chapter 13 bankruptcy, the plan must provide for full payment of all trust fund recovery taxes in order to be confirmed.

There is no escape from trust fund recovery taxes. However, trust fund taxes will become uncollectible if the 10 year statute of limitations expires without the IRS filing suit, regardless of whether the taxpayer files bankruptcy or not.

If you would like to speak with a knowledgeable attorney regarding payroll taxes and bankruptcy, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. Or just pick up the phone and give me a call at 918-615-8260. I’ll answer all of your questions in plain English so that you’ll have the information you need to make the decisions that will help you the most.

A property tax is a tax imposed upon a person because of his or her ownership of property.

Here in Oklahoma, there are two types of property taxes:

1. Real estate taxes levied upon land owners by local municipalities, and
2. Personal property taxes levied against business owners by local municipalities for ownership of personal property used in connection with a business.

Property taxes are dischargeable in bankruptcy if:

1. the tax was incurred before you file bankruptcy, and
2. the tax was last payable without penalty more than one year before you file bankruptcy.

Remember, however, that liens survive bankruptcy.

Property taxes are secured with a statutory lien against the property that the tax is assessed against.

Therefore, if you want to keep the property that the property tax was assessed against, you must pay the property taxes even if the debt is discharged in bankruptcy or the taxing authority can foreclose on the property.

If you would like to speak with a knowledgeable attorney regarding the discharge of property taxes in bankruptcy, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. Or just pick up the phone and give me a call at 918-615-8260. I’ll answer all of your questions in plain English so that you’ll have the information you need to make the decisions that will help you the most.