COVID-19: You Need a Plan

I am going to say something that in my 23 years of law practice I have never said en masse:  YOU NEED TO SPEAK TO A LAWYER.  People that know me would tell you that I am the least lawyerish lawyer they know.  I do not often talk about my profession.  But these are extraordinary times and I cannot stress enough that you really do need to speak to a lawyer to put plans in place for yourself and your family.

Yesterday the President related the need to extend social distancing through April 30, 2020 and hinted that that date could be further extended.  Some of the infection / mortality numbers discussed by health experts and government officials over the last week are scary.  For the purposes of this blog I will not re-write any of those numbers.  Frankly, COVID-19 and its effects on the United States are a moving target.  But it is time for all of us to consider what kind of plans we have in place.  Here is what I mean:

1) Coronavirus Aid, Relief, and Economic Security (CARES) Act - Congress passed and the President immediately signed the CARES Act in order to provide assistance during this difficult time but what does it mean to you?  Sure, the provisions of the Act that allow the government to send checks to most Americans and the provisions that broaden unemployment get top coverage on the news but some of the other provisions of the Act are worth considering.  There are provisions that loosen restrictions and penalties on withdrawing money from retirement accounts (we still advise against taking money from retirement accounts in most situations) and there are provisions specific to bankruptcy that make it possible for you take up to seven years to re-pay delinquent debts.  These provisions, among others, can be of HUGE help to business owners or employees who have been hurt by the economic slow down.  Don't just take your check from the government and think that is all, there is potentially much more help for you.  (We expect a second Congressional measure to start being kicked around soon.  We will keep an eye on it.)

2) Power of Attorney - A power of attorney grants the authority to act on behalf of another person for specified legal and financial matters.  Given the scope of the pandemic it is possible that you or someone in your family could wind up with a positive diagnosis and resulting health issues.  Having a power of attorney between husband and wife is potentially very important.  But at this stage you may want to look further.  Do aging parents, grandparents, aunts or uncles, or other close connections have someone that could assist them if they have a situation beyond their control?  If you are nervous about granting such authority, talk to a lawyer about a limited power of attorney which grants only the powers that you are comfortable granting.

3) Living Will / Health Care Directive - A living will, sometimes called a health care directive, is a document that details a person's desires regarding medical treatment in a circumstance in which that person is no longer able to express informed consent.  Now, this is a grim topic in many ways.  No one wants to spend a whole lot of time thinking about their own potential incapacitation or thinking about the incapacitation of someone they love.  Frankly, I did not have one of these for myself until today.  Why did I choose to prepare one for myself today?  Because I could not bear the thought of having my family in a situation where they were either powerless in expressing medical desires for me or where my family was uncertain about what kind of treatment I do or do not want.

4) Financial Planning - Lawyers generally are not going to be the folks that you talk to about which stock makes the most sense for your long term goals.  That said, we are the folks you should talk to if you have children under the age of eighteen or if you have not considered how to protect your assets or distribute them in case something happens to you.  Do you need a Last Will and Testament? That answer is always yes but you should get answers about what that does for you.  Do you need a trust to hold assets and distribute them in an orderly way?  Maybe.  Do you need a trust to protect you from personal liabilities?  Maybe.  Do you need to express formally who you would like to be the guardian or custodian of your children if something happens to you?  I cannot think of a reason why the answer to that would be 'no'.  These are just a few of the items you should take some time to discuss with a lawyer, there are certainly are more things to consider than just these.

We as Americans are adjusting to a new 'normal'.  Part of the new normal is that everyone needs a plan.  EVERYONE!  Feel free to send me an e-mail (stu@stubrownlaw.com) or give me a call (859) 360-1316.

COVID-19 Bank, Tax, Congress Contact Information

We strongly urge contacting your creditors to make sure any financial problems you experience can be resolved.  Right now there is plenty of uncertainty about whether evictions, foreclosures, garnishments, or repossessions have been stopped.  In some localities that answer is 'yes' because there have been general orders entered that protect us.  The federal government has instructed HUD and FHA to suspend evictions and foreclosures.  But there are still plenty of collection actions moving forward - yesterday a client forwarded a newly entered garnishment order to me.  PLEASE CHECK THE STATUS OF YOUR ACCOUNTS INSTEAD OF ASSUMING ANY KIND OF COLLECTION SUSPENSION. 

If you want to contact your Bank, the tax authorities, or your representatives in Congress?  We have you covered.

BANKS (CREDIT CARD, AUTO LOAN, MORTGAGE):  A few days ago we mentioned that contacting banks about loan options in light of the current economic woes is a good idea.  Since we posted that comment we have received lots of really good information regarding what banks are doing to provide some assistance to people affected by the COVID-19 pandemic.  We have compiled a list of contacts for various banks. 

You will find that some banks are out in front of this trying to assist their customers.  A tip of the hat to Fifth Third and Hyundai Finance as they appear to really have strong assistance programs.  Other banks, may not as friendly or forthcoming with what they are going to do.

We know we didn't get contact information for every bank, there are just too many, but this is a list of the big ones that work with our clients:
 

Ally:  https://www.ally.com/coronavirus-response/?CP=EML400001705

Bank of America:  https://about.bankofamerica.com/promo/assistance/latest-updates-from-bank-of-america-coronavirus

BB&T (now Truist):  https://www.truist.com/coronavirus-information

Capital One:  https://www.capitalone.com/coronavirus/2/

Central Bank:  https://www.centralbank.com/coronavirus/

Chase:  https://www.chase.com/digital/resources/coronavirus?jp_aid_a=51899&jp_aid_p=chasehome_3/trip3

Citi Bank:  https://online.citi.com/US/JRS/pands/detail.do?ID=covid19

Fifth Third Bank:  https://www.53.com/content/fifth-third/en/alerts/covid-support.html?fbclid=IwAR2H5lDpeWFEQ4G9OpUE6d0JsD3G-4uozS6JgwDkxe5Tc4dJpux1UrgWga0

First Financial Bank:  https://www.bankatfirst.com/content/first-financial-bank/home/blog/continued-covid-19-precautions.html

Forcht Bank:  https://www.forchtbank.com/special-notice-regarding-coronavirus

Ford Motor Credit:  https://media.ford.com/content/fordmedia/fna/us/en/news/2020/03/16/ford-offers-customers-community-assistance-covid19.html

GM Financial:  https://www.gmfinancial.com/en-us/coronavirus.html

Guardian Savings Bank:  https://www.guardiansavingsbank.com/COVID19/

Heritage Bank:  https://www.ourheritage.bank/CustomContent.aspx?Name=Coronavirus

Huntington Bank:  https://www.huntington.com/coronavirus

Hyundai Financial:  https://pfile.hcamerica.com/content/dam/hca/hmf/img/homepage/2020-hmf-homepg-covid19-pdf.PDF

PNC Bank:  https://www.pnc.com/en/customer-service/coronavirus-update.html?lnksrc=homepage-alert

Stockyards Bank & Trust:  https://www.syb.com/getdoc/6ee703fc-8c2e-42fe-9c38-7c2e6b569cc4/coronavirus/

Third Federal:  https://www.thirdfederal.com/COVID-19-updates

Toyota Finance:  https://www.toyotafinancial.com/us/en/covid-19.html

US Bank:  https://www.usbank.com/splash/covid-19.html

Victory Community Bank:   https://www.victorycommunitybank.com/about-us/alerts/important-information-related-to-covid-19

Wells Fargo:  https://www.wellsfargo.com/jump/enterprise/coronavirus-response

TAX DEPARTMENTS:  If you have a tax issue be sure to contact the tax department and keep a record of that contact.

IRS:  https://www.irs.gov/coronavirus

Kentucky Department of Revenue:  https://revenue.ky.gov/Pages/2019NovelCoronavirus.aspx

Ohio Department of Taxation:  https://coronavirus.ohio.gov/wps/portal/gov/covid-19/

MEMBERS OF CONGRESS:  We are listing the physical office location and telephone numbers of the regional Kentucky and Ohio members of Congress.  Why did we not list the e-mail addresses?  Because in our experience, e-mails sit and sit and sit and then maybe some month in the future get answered.  Mail, friendly visit, or telephone calls are what we recommend.  Small business owners concerned about economic assistance should make this a priority.  YOU COULD EASILY ASK A QUESTION LIKE "WHY IS THE SMALL BUSINESS ADMINISTRATION CHARGING 3.75% INTEREST ON THESE RELIEF LOANS? IN FACT, WHY ARE THEY CHARGING ANY INTEREST AT ALL ON LOANS ARISING FROM THIS DISASTER?"

 Kentucky:

Sen. Mitch McConnell – 1885 Dixie Highway, Ft. Wright, KY (859) 578-0188

Sen. Rand Paul – No Northern Kentucky office but Washington DC office is (202) 224-4343

Rep. Thomas Massie – 541 Buttermilk Pike, Suite 208 (859) 426-0080

 Ohio:

Sen. Rob Portman – 312 Walnut Street #3425, Cincinnati, OH (513) 684-3265

Rep. Brad Wenstrup – 7954 Beechmont Ave, Suite 200, Cincinnati, OH (513)474-7777

Rep. Steve Chabot – 441 Vine Street, Room 3003, Cincinnati, OH (513) 684-2723

Sen. Sherrod Brown – 425 Walnut Street #2310, Cincinnati, OH (513) 684-1021

Rep. Warren Davidson – 8857 Cincinnati-Dayton Rd, West Chester, OH (513) 779-5400

Rep. Steve Stivers – 69 N. South St., Wilmington, OH 45177 (937) 283-7049

Let us know what you are hearing from banks, tax departments, or your representatives.  We will be updating this list with comments and information.  stu@stubrownlaw.com or (859) 360-1316

COVID-19 Small Business Owner "Do" and "Don't"

Small business owners are particularly hard hit by the COVID-19 measures put in place across the country.  Social distancing measures are being enforced and many businesses have been ordered closed.  Particulary hard is that closure appears to be for an indefinite amount of time.  There is uncertainty as to what kind of assistance will come from the government.  To say this is a stressful time would be a massive understatement.  We want to provide some insight for small business owners.  Here we go:

DO:  The government makes the rules so they make the rules to favor themselves!  Pay your taxes that are coming due.  Payroll taxes and sales taxes are particularly problematic if they go unpaid.  Since payroll taxes are deducted from paychecks and since sales taxes are collected at the point of sale, small business owners are operating as the collecting agent for the government.  MONEY COLLECTED IS THE PROPERTY OF THE GOVERNMENT and the government will hit you with personal liability on this kind of debt if you fail to pay it.  If there is simply no money left to cover these expenses, file the return even if it is sent without payment.  Filing the return without payment will decrease penalties and, in some cases, decrease interest due.

DON'T:  While it can be tempting to tap credit lines to pay employees, never borrow money to pay payroll.  We fully understand that your employees may feel like family to you.  In some cases you have employees that are so loyal and hardworking that the thought of failing to pay them is soul crushing.  But if you do not have enough money IN THE BUSINESS to pay your employees then the time is right to let them go.  Federal and State actions are widening unemployment eligibility and you will never be able to match, from your business or from your personal resources, what government programs can do.  Do not create debt for yourself trying to cover staff salaries when that money is not coming into your business.

DO:  Evaluate every angle to reduce short term expenses.  If your business is closed right now does it need four telephone numbers or is maintaining the primary telephone number good enough?  Do you have things like magazine or newspaper subscriptions that can be cut?  Are there regular monthly payments that you are making to business services like Quick Books, Adobe, or other point of sale services?  Can these be temporarily suspended?  LOOK AT EVERY MONTHLY EXPENSE and see if there is a way to trim it back.

DON'T:  Borrow from one business to pay for another.  Many of our small business clients are involved in multiple enterprises.  They are true entrepreneurs.  While one business might be affected by government shutdowns and another might not be, do not blur the lines between the two.  While there are several reasons for this advice, here are a few: 1) POTENTIAL LOSS OF LIABILITY PROTECTION created by incorporation, 2) accounting nightmares of creating losses that cannot be written-off for the living company, and 3) hurting the thriving business when it should be the one that is helping you and your family.

DO:  Make sure that you keep engaged with your customers in a positive way.  You have built your business on customer relationships and you need to make sure that your customers know that you are still there - even if right now they cannot get to you.  Social media channels can be effective ways to reach your audience in a cost effective way.  E-mail blasts can certainly be effective too.  MAKE SURE CUSTOMERS KNOW YOU WILL BE THERE when all of this stuff has calmed down.  The flip side of this 'DO' is to make sure that you avoid the kind of public rant that causes customers to feel uncomfortable.  Sure, there is plenty of frustration to go around but be very careful about creating controversy around you or your business.

This list could literally go on and on.  Small business owners have a whole lot to consider right now and times are as tough as we have evern known them to be.  If you have any questions or thoughts on these points feel free to call me at (859) 360-1316 or e-mail me at stu@stubrownlaw.com

COVID-19 'Do' and 'Don't'

The effects of the COVID-19 pandemic are unlike anything that any of us have ever known.  My dad is 88 years old (and hopefully remaining fully self quarantined) and I talked to him about this today.  He talked about how World War II led to all kinds of different life conditions - rationing, curfews, etc. - but was absolutely clear that he had NEVER experienced anything like this.

While the horror of the virus, it's mortality rate, evil silent spread, and our inability to yet contain it is one side, the economic effects of this situation are going to be real and urgent for just about anyone who reads this page.  We have compiled a list of Do and Don't items to hopefully provide some guidance in these uncertain times.  Here we go:

DO:  Prioritize the immediate needs of your family over any other issues. What can that mean? An example would be that if the choice is whether to pay a mortgage payment or buy food - BUY FOOD. We can fight with the mortgage companies later.  There is no doubt that paying for the needs of your family is more important than paying a credit card bill or other debt.

DON'T:  Tap into 401(k) accounts, pensions, retirment savings, IRAs or other protected investment vehicle if the reason you are tapping into those funds is to pay creditors.  Retirement funds are often the largest asset that people have.  Depleting that asset can lead to horrible long term financial effects. Retirement accounts are almost always protected in the context of a bankruptcy - if you have to take that kind of action - so, HOLD ONTO YOUR ASSETS as long and as much as you can.

DO:  Let SECURED creditors know if you are going to miss a payment or two.  Secured creditors are creditors that have liens on assets.  Typically this would be in the form of mortgage loans or car loans.  While there may be some government relief coming on these points many secured creditors will allow you to skip a payment.  That simple bit of mercy from a creditor can provide significant relief.  And, if the secured creditor is unwilling to assist, call me.  Seriously, I want to make a list of creditors who are hateful in this time of incredible turmoil...oh, and I will give them an earful for you!

DON'T:  Pledge personal assets as collateral for short term or personal loans.  In times like this it can become very tempting to head to finance companies that provide quick, no-questions asked, high interest rate loans.  DO NOT GO THERE.  If your situation is dire, lacking ability to put food on the table or provide basic necessities, ask for help.  It's humbling to ask for help but I know that the spirit of this community is strong.  Look to government programs, charities, friends, community groups, or whatever other resources there are instead of deepening the financial burden by risking assets and incurring horrible debts.

DO:  Take some time to fully review the status of your assets.  Now would be a good time to take a look at everything you have and create a personal inventory.  Why is this helpful?  Because for money related assets (bank accounts, cash on hand, investments, retirement accounts) you need to know where you stand and what reserves you have.  And because for personal items taking an inventory can outline needs versus wants and, perhaps just as valuable, can provide comfort by finding things to do and memories of times past.  One other thing that can come from this is you might find items that others need but that are surplus to you...if ever there was a time to be charitable it is now.

DON'T:  Panic.  Look, these are going to be tough financial times.  Some industries are going to be entirely closed for a full month (i.e., Las Vegas casino resorts - as of yesterday closing for a month) and others will be affected for a long while that is yet to be determined.  Being without a paycheck is stressful.  Being without a paycheck for an undetermined period of time can be mind blowingly stressful.  We are all in this together.  We will all find solutions together.  Take the time to make good financial decisions.  Don't over buy.  Don't under buy either.

DO:  Tell any debt collector that contacts you that they are out of luck.  While I sincerely hope that debt collectors are taking a lighter approach, they have a job to do.  Maybe they are getting a paycheck for making calls.  While none of us like to be pressured about debts that are past due, now is a particularly tough time.  Paying a bill in collection cannot be a priority over the basic needs of your family.

If you have any thoughts as to other things that I should add to this list then please let me know.  Feel free to call me at (859) 360-1316 or e-mail me at stu@stubrownlaw.com if you have any questions.

A Helpful Bankruptcy Code Revision

Our office has handled numerous bankruptcy cases for small businesses and small business owners.  A new modification to the United States Bankruptcy Code (effective February 19, 2020) will provide a tool that, in my opinion, will fill a gap that existed in the bankruptcy code.  The new law creates a new subchapter of Chapter 11 (Subchapter V) which has the potential to act something like a Chapter 13 case for individuals with relatively high debt.

Say what you want about President Trump, he certainly is no stranger to the bankruptcy laws.  Six Trump companies have apparently filed for bankruptcy protection under his watch.  Now, his critics may say that is a result of some kind of mismanagement but President Trump is quite correct when he has said that his companies availed themselves of certain laws that were available to help companies reorganize.  Chapter 11 has always been, and still is, the realm of big business bankruptcy.  There is nothing wrong with using Chapter 11 in situations where that kind of action is warranted.

What President Trump no doubt learned in his experiences with Chapter 11 is that it was a costly, time consuming, complicated process with very little differentiation for the owner of a $100,000 business or the owner of a $1,000,000,000 business.  In this political battlefield of polarization between Democrats and Republicans there was a bi-partisan recognition that Chapter 11 needed a makeover.  Legislation was introduced in the House of Representatives by two Democrats and two Republicans.  The bill passed the House, passed the Senate, and was signed by the President.  So, he we are and what does it mean?

The Small Business Reorganization Act of 2019 creates a streamlined process for debtors with debts not exceeding $2,725,625.  There are reductions in paperwork and in the way that a reorganization plan could be approved.  This reduces costs and creates a far better playing field for the small business debtor who is facing financial difficulty. 

In the past many small business owners would have had to close their doors or file Chapter 7 bankruptcy to liquidate assets.  Chapter 13 was often not available to business owners because there are rather strict debt limits that make a debtor ineligible for that relief.  That is no longer the case.  We are already looking at cases that are likely to be filed under the new Subchapter V of Chapter 11.  Situations that seemed utterly hopeless now have a new potential avenue for resolution.  If you are a business owner with cash flow issues, this new law may the best path for you.

A Word About Documents

When you contact our office you will be asked to provide a number of documents to us.  Some of our clients have remarked that the documents they provided look a whole lot like the documents that were provided when they applied for a mortgage loan.  We do ask for six months of bank statements, six months of paystubs, copies of all car/vehicle titles, copies of tax returns, copies of deeds, copies of mortgages, and copies of documents related to retirement accounts.  Each of the documents that we request has a purpose in putting together your petition and most of the documents are required to be turned over to the bankruptcy trustee.

We realize that putting together the documents can be tedious and we will assist you in any way that we can.  However, document production is of extremely high importance in handling your case.

Motions for Relief From Stay

When a bankruptcy case is filed there is an initial order from the Court that bars additional creditor collection activities.  This 'automatic stay' prevents foreclosure sales, garnishment of wages, judgment liens, and other creditor activity.  There are some instances in which the automatic stay does not apply at all.  Creditor offsets of deposits on hand is an easy example.  Additionally, in some instances a creditor may justifiably ask the court from relief from the automatic stay in order to continue their collection activity.  This is most commonly found in the realm of foreclosure where payments to the mortgage company are not being made after the filing of the bankruptcy petition. 

While there are other instances that can lead to relief it is important to speak with us about the status of any collection activity that is pending against you.  We can let you know what to expect if a creditor seeks to obtain relief from the automatic stay. 

Why Adoption Is Great

I practice quite a bit of adoption law.  I have always loved filing adoption cases for my clients.  If you are thinking about or looking to adopt a child then please contact my office.  I have personal experience with adoption that will help you guide through the process.

Ten years ago my wife, Ashley, and I adopted our daughter.  I rarely even consider that my daughter is not my biological child.  (We have one of each - biological boy and adopted girl).  The parenting relationship is so natural and so strong that the fact that there was a legal process is not even in the spectrum of things that matter.  Speaking from experience as an adoptive father, adoption allows for just as strong of a family relationship as any other way of parenting.  My daughter means the world to me.  I love her dearly.  I cannot imagine my family without her. I am grateful for being her parent.

The Death of a Supreme Court Justice

I have to say that when I read that Justice Antonin Scalia passed away I found myself with a lump in my throat. Supreme Court decisions affect everything that I do as a lawyer. That is not an exaggeration, everything from interest rates for chapter 13 debtors to the jurisdiciton of bankruptcy courts have been reviewed and decided by the United States Supreme Court. I did not have any particular love or hate for Justice Scalia but his death got me thinking immediately about who would be his replacement.

I have no desire to go through all of the ups and downs of the politics of Washington DC. I dislike the notion that things have become so polarized that before a replacement has been suggested there is a 'no' coming from one party or the other. To say 'we are not going to consider anyone' before a name is even put on the table is just so childish. In the end all that I hope is that we wind up with a new supreme court justice that is thoughtful in their review of cases, respectful of the position that they hold, and mindful of the fact that our legal system has never been perfect.

Someone once said that 'labels are for soup cans' and the whole notion of branding supreme court justices with labels is odd. Perhaps the most notable supreme court justice of all time is Earl Warren. Justice Warren was appointed by the conservative Dwight D Eisenhower but proved to be a justice willing to work compromise and make difficult decisions. Can't we find a justice like Earl Warren? Someone who looks at the case as it is presented? Someone who doesn't need to view a case with a particular set of ideological goggles? A middle voice? I hope we can...but time will tell.

Again with the IRS...

The IRS has been far more aggressive in recent months than they have been at any other time in the duration of my practice of law.  There is a 'no stone unturned' attitude to their collection activities and business owners are being subjected to far more scrutiny in the past.  I know that there are a number of outfits that advertise on the radio and during day time television about their ability to compromise IRS debt.  BUYER BEWARE!!!  While it is possible that some small tax matters are easily adjustable, a small tax matter can quickly spiral out of control.  Please contact us for a free consultation if you have questions about your tax matters.  We will provide you with perspective on what your situation may hold.

Joint Liabilities

We have recently had a high number of cases that have presented lots of unique issues about potential joint liabilities between business partners or spouses.  We have seen lots of co-signed student loans, debts arising from joint tax returns, judgments against one owner of a jointly owned property and unknown partnership debts.  These cases require extra caution on all sides and can encompass a variety of issues.

We have recently advised folks to partition real estate, amend joint tax returns, prepare a partnership agreement or seek administrative assistance with student loans.  There are other issues to consider that could reach to other forms of advice.  The common theme with all of the issues arising from joint liabilities is that you have to tread cautiously.  If one person has more to lose than the other then both sides need to discuss the issues and come to agreements as to how to proceed.  Nothing can ruin a relationship faster than if one joint debtor sinks the other by being careless.

Student Loans

The New York Times reported today that student loan debts are likely to top one trillion dollars this year.  That's right:  OVER ONE TRILLION DOLLARS in student loan debt exists in our country.  The article goes on to describe that parents will soon be paying their own student loans at the time that their kids are going to college and incurring student loans of their own.

Student loans can be particularly difficult to resolve in the context of bankruptcy.  A part of me would say that student loans are the single most difficult debt class to resolve.  Now, that is not to say that there are not ways to address the student loans in a bankruptcy context.  In fact, I am currently watching the progress of several cases that could have a dramatic effect on how Chapter 13 cases are used to 'adjust' student loan balances. 

If those cases are decided by the Courts in the way that they should then bankruptcy may wind up being the absolute best alternative for handling student loan debt.  I will keep you posted.

Business Debts With Personal Guarantees

We have noticed an upswing in the number of business cases that we are receiving in which the principal owner of the business has personally guaranteed the business debts.  These cases provide unique challenges in balancing the financial interests of the business against the financial interests of the personal guarantor.  If there is one thing that we want to say on this point immediately then it is this:  DO NOT LIQUIDATE RETIREMENT ACCOUNTS OR PENSION FUNDS TO PAY PERSONALLY GUARANTEED BUSINESS DEBTS.  The second thing that we want to say on this point immediately is:  DO NOT FAIL TO PAY TAXES THAT ARE DUE IN ORDER TO PAY OTHER BUSINESS DEBTS.

Now, with that said, the pressures on business owners to personal pay their business debts can be extreme.  There are solutions to these issues that often require technical review of each situation.  The legal work on this type of situation is often productive in finding solutions to the debt problems but, of course, each situation has to be independently reviewed.  Start from the point of view of the two comments above and then narrow the issues to produce an outcome that is manageable.

A few words on taxes in bankruptcy...

I have practiced bankruptcy law in the Northern Kentucky / Cincinnati area for nearly fourteen years.  My office has handled cases across a broad spectrum of businesses and personal situations.  An emerging trend that is far more prevalent now than ever before is the use of aggressive collection tactics by tax authorities.  I have seen more swift collection activity from the IRS, Kentucky Revenue Department and Ohio Attorney General than ever before.

Most of the clients that I talk with about tax problems in a bankruptcy context are surprised to hear that bankruptcy does offer a wide variety of remedies for tax debts.  The first and most important question is when a tax return was filed.  (If returns have not been filed then FILE THEM NOW!!!)  Filing tax returns is critical and most of the Bankruptcy Code is written to penalize people or corporations that do not file returns.

Chapter 7, depending upon the situation, can be used to discharge old tax debts and/or the liquidation process can pay off or decrease tax liabilities.  Chapter 13 gives a very wide variety of treatments for tax debts that often result in a better situation than an offer and compromise with the tax entity can give.

So, the bottom line is that if your tax issues are causing you to have serious problems then do not assume that bankruptcy is of no use to you.  The fact is that bankruptcy may actually be the best option for resolving tax problems.

Personal Chapter 7 Bankruptcy - the least that you need to know

Within the realm of bankruptcy law, Chapter 7 cases are probably still considered to be the 'classic bankruptcy' or 'total bankruptcy'.  The gist of the filing a chapter 7 case is that you list all of your assets, debts, income and expenses and, if all goes as planned, the United States Bankruptcy Court will discharge the debts that you wish to have discharged.

Yes, you can keep and maintain certain kinds of debts while going through a chapter 7 case.  Automobile loans are very commonly reaffirmed.  Mortgages are also very commonly reaffirmed.  There may be a hearing required by the Court to approve the keeping of these kinds of debts.

No, unless certain circumstances apply to you, you generally will not be able to discharge student loan debt, domestic support obligations and some kinds of taxes.

Yes, there are exemptions that apply to most classes of personal property.  These exemptions enable you to know what property you can keep during the chapter 7 process.

We have significant experience in handling chapter 7 cases for individuals.  Regardless of the complexity of your individual situation, we can find a solution that makes sense for you.

Snow!

I grew up in a school district that very very rarely closed for snow.  I think that as a result of those school days trudging through snow to school, I developed the sense that snow is more of a bother than an amusement.  The funny thing about that is that now, as an adult, I find myself wanting to spend more time out in the snow with my kids than I ever wanted to spend as a kid.  Yesterday we built a snow fort.  Today I pulled out a sled for them and I did a little snowboarding in the side yard!

The fun part now is that technology allows me to continue working even when schools are out and my subdivision is iced over.  Technology has revolutionized the practice of law...and mostly for the better.

Have a great day everyone!