Monday, April 9, 2018

Should Filing Bankruptcy Be The Last Resort?

Although we’ve mentioned it time and again on the forum, it bears repeating: filing for bankruptcy is not a decision to be entered into lightly. In fact, it is important to get good information and carefully weigh your options.

Should Filing Bankruptcy Be The Last Resort

Is Bankruptcy Always a Last Resort?

Having said that, delaying too long can cause unnecessary financial strain and serve to compound existing problems. Is bankruptcy always the last option? Some of the common things consumers do before they consider bankruptcy include: • Cash out their retirement funds to pay debt • Pay a debt settlement company to settle their debts • Settle their debt by dealing directly with the creditor or its attorney In some cases, these bankruptcy alternatives can be just what the doctor ordered, however in others they can put you in deeper trouble without meaningful debt relief.

Depleting Your Retirement To Pay Debt

Selling assets to avoid bankruptcy is often a bad idea and a retirement account is no exception. As Bankruptcy Lawyers in Utah like to point out to everyone who meets with us about bankruptcy…

The fact is that the lingering recession is causing a lot of people to file for bankruptcy who never thought they would. While the recession is is undoubtedly a sad turn of events, I am also seeing an even more disturbing trend. Namely, a lot of them are selling all of their property in an effort to stay current with their bills and avoid filing for bankruptcy. By the time they come to me, they have already gone through everything they own. While these efforts are always well-intentioned, they are catastrophic for their finances. In a lot of cases, people are selling assets that they would otherwise be able to keep if they would have thought about filing for bankruptcy a little sooner.

Perhaps nowhere is this point better illustrated than in the context of a retirement account. ERISA qualified 401(k) accounts and many IRAs are completely exempt in bankruptcy. This means you can file bankruptcy, shed your debts and keep your retirement. As Jacob describes, it is always difficult to see someone liquidate their retirement only to be forced into bankruptcy a few months later. For more information, see: Retirement Savings and Bankruptcy.

Debt Settlement vs. Bankruptcy

Debt settlement companies promise the world but rarely deliver. They often charge fees that far exceed the cost of bankruptcy and actually require their clients to go deep in default in order to settle their debts. Here is how the process works: you, the debtor, stop paying on your credit card accounts and other bills and instead save some of the money. When you’re deep enough in default, the creditor has written off the debt and may agree to accept a reduced payment in satisfaction of the balance. You fork over the money you’ve saved plus a hefty fee and you’re out of debt. That’s how it works sometimes, but definitely not all the time. While you’re waiting on the debt settlement company, you’re creditors are definitely not waiting on you. They’re reporting delinquencies on your credit. calling and sometimes actually suing to collect. By the time you’ve reached your debt settlement goals, your wages may already be in the process of being garnished or a judgment might have been entered against you. Sure, filing for bankruptcy can help with most of these problems, but why wait?

Negotiating With Creditors instead of Bankruptcy

While the debt settlement waiting game is expensive and often ineffective, sometimes negotiating directly with creditors can be a nice alternative to filing for bankruptcy if you already have the cash to make a deal. If you stand to have more assets liquidated in bankruptcy than you’d save in debt, dealing with the creditor through an attorney can often result in signifcant savings and a permanent solution to the problem. In these cases, bankruptcy may very well be your best option. For example, let’s say you owe $50,000 on a delinquent business loan but have $150,000 in cash and stocks. Filing for bankruptcy would result in the trustee liquidating your stock portfolio to pay your creditors, in fact, they’d likely get paid in full. In these instances, it makes much more sense to negotiate a reduced payment directly with the creditor.

Fresh Start For You

Although the costs are not insignificant, the purpose of bankruptcy is to provide those struggling with debt a fresh start. Sometimes, the bankruptcy card is only to be played as a last resort, however, in some cases it offers the most thorough relief on the best timeline. Each situation is different, if you’re contemplating bankruptcy, be sure to meet with an experienced attorney.

Free Consultation with a Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Sunday, April 8, 2018

Beneficiary of a Will

It is important to select and name the beneficiary of a Will with care. The beneficiaries will receive the assets or benefits that have been designated in the document. There may be a single beneficiary or even multiple beneficiaries. An estate planning lawyer can advise you on how to select them.

Beneficiary of a Will

You need to be careful about how you name a beneficiary of a Will. While identifying beneficiaries by name and relationship is what you want to do, problems can still arise. For example, suppose you name your children as beneficiaries. Should one of your children predecease you, you will need to specify what happens to that person’s share to avoid confusion. If you want that child’s share to go to his or her heirs, then you must make that intent clear in your beneficiary designation. This can be accomplished by clearly setting forth an alternate beneficiary designation or by including a per stirpes clause.

Another consideration when naming a Will beneficiary is the status of the person you want to benefit.  For instance, if your child is not over the age of 18, the child does not have the legal capacity to receive a bequest in his or her own right.  In these situations, a testator should consider having a child’s share placed into a trust the terms of which are set out in the Will.  This type of trust is a testamentary trust.  In a typical situation the Trust provisions may provide that the property is given to a named trustee to hold in trust for the child until the child reaches say age 21 at which time the child receives one-half of the fund.  The trust can then provide that the balance of the trust is to be paid to child when he reaches age 24.  Also, the trustee can be given broad powers to distribute the trust principal and income to the children throughout the term of the trust.

Joint Bank Account

The probate process is complex, and some people will take steps to avoid it. Additionally, probate proceedings are also a matter of public record. To avoid probate, one of the things some people do is name another person as joint owner of property such as a joint bank account or real estate. When there is a joint bank account at death, the surviving owner automatically becomes the sole owner of the entire bank account or other joint asset. A Utah probate lawyer can explain how this process unfolds.

Owning assets jointly with another can be a simple way to distribute an estate. However, problems can arise where the joint ownership was created only for the convenience of the asset owner during their lifetime and did not actually reflect their desires as to the distribution of their property upon death. In fact, the distribution of the entire asset to the surviving joint owner upon death may directly conflict with the decedent’s estate plan as set forth in a Will. Unfortunately, the automatic nature of the transfer of joint assets generally cannot be circumvented by the more general language of the decedent’s Will.

This situation is a very common cause of Estate Litigation in the Surrogate’s Court, with which an estate attorney is familiar.  A typical case may involve a child who lives with or near a parent. Although the parent has created a Last Will leaving all of his assets equally to all children, unknowingly, the parent puts the one child on the bank account as a joint owner so that the child can help the parent with his daily bills and finances. When the parent dies, the entire joint account automatically becomes the property of the one child and the provisions in the Will do not apply.

Utah attorneys, as well as those throughout the state, are aware that planning an estate requires understanding the nature and ownership of all of the assets involved.  At their own peril, many people do not pay close enough attention to the names they put on their assets and then probate litigation occurs where family members allege undue influence and improper conduct on the part of individuals who benefit from these oversights. An estate lawyer can review your situation to determine what is best for you.

Free Consultation with a Utah Estate Lawyer

If you are here, you probably have an estate issue you need help with, call Ascent Law for your free estate law consultation (801) 676-5506. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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How to be a Safe Motorcycle Rider

Choosing to commute to work by motorcycle can save you time and money, but it doesn’t come without its risks. Making sure you’re well prepared can save you from injury in a motorcycle accident in Sandy, Utah or wherever it is you’re commuting. Unfortunately, sometimes accidents can’t be avoided.

How to be a Safe Motorcycle Rider

WEAR THE PROPER SAFETY GEAR ON EVERY RIDE

Even in the temperate weather of St. George, you’ll need to make sure you gear up every time your ride. Depending on your commute, you’ll need to plan your gear for the weather conditions. Make sure you have a good jacket that protects you in case of a motorcycle accident. If you’re a lawyer or a businessman that typically wears a suit to work, you might want to look into a jacket that doesn’t wrinkle your work clothes during the ride.

CONSIDER HEATED GEAR IN COLD CONDITIONS

If you’re commuting in a region that gets cold, make sure you have gear that keeps you sufficiently warm. In cold conditions you should consider using heated grips, heated gloves, a heated vest, a neck warmer and warm base layers. Investing in a helmet with an anti-fog lens will help you keep optimal visibility in cold weather conditions and help you avoid a motorcycle accident.

STAY VIGILANT: ACCIDENTS HAPPEN WHEN RIDERS GET COMPLACENT

Popular studies show that riders and drivers are most likely to crash within a 25-mile radius of their own houses. This is because people get comfortable close to home and stop paying attention to the road. This can also become a problem when commuting. Riding the same route every day can get comfortable, and commuters run the risk of getting complacent. No matter how many times you ride the same route through St. George, make sure you stay vigilant every single time — especially if you’re a mother, a father or a lawyer.

QUICK TIPS FOR MASTERING MOTORCYCLE CORNERING

You finally did it: You bought the Indian Scout that you’ve been dreaming about since you were 17. You’ve been slowly saving for the past year or so and gradually breaking the news to your friends and family: You bought a motorcycle, and you’re beyond ready to take it out on the road.

If you’re new to motorcycle riding, there are a few basic turning maneuvers that can help you avoid becoming the victim of a motorcycle accident as you streamline down the freeway from West Jordan, Utah to Southern Utah. Here are some of the best turning moves to know to avoid becoming the victim of an accident and consequentially having to call a lawyer.

The Outside-Inside-Outside Maneuver

When turning a corner in a motorcycle, the general rule of thumb dictates that you enter the turn on the outside, gradually move through the turn on the inside and then exit on the outside. There’s actually a science behind why this maneuver works so well: It allows you to see farther down the turn and anticipate a situation that might cause a motorcycle accident and the consequential need for a lawyer. It doesn’t matter if you’re making a quick turn while entering the freeway in West Jordan or traversing a roundabout on the East Coast.

This maneuver will help prevent a serious motorcycle accident.

Accelerate Through Turns

It’s critical to also briefly discuss speed. Contrary to what might seem like common sense, motorcyclists should actually accelerate through turns, not brake. Braking in the middle of a turn will force your motorcycle to stand upright or even slide out, and will almost certainly catapult you into the dirt on the side of the road. Although that curvy freeway entrance in West Jordan might look intimidating, don’t slow down — doing so might result in a motorcycle accident that almost certainly requires a lawyer.

Mastering a turn on a motorcycle takes practice, but it’s well worth it. Before you take that beautiful Indian Scout out on any major roads this summer, master these turning maneuvers to decrease your chance of an accident.

Free Initial Consultation with Lawyer

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you!

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Saturday, April 7, 2018

Tax Refund and Bankruptcy

It comes up every tax season. You’re looking forward to receiving a big tax refund check, and you’re also working hard to get your bankruptcy case filed. So, what happens to your tax refund in a bankruptcy case?

Tax Refund and Bankruptcy

Here’s How to Keep Your Tax Refund

We’ve said it time and again on the forum: Tax refunds are the number one asset that trustees routinely take from debtors. Exemption laws in most states only go so far to protect cold, hard cash, and anything over and above your state’s designated exemption is fair game for the trustee.

Trustees love to go after tax refunds because, unlike real estate and other assets, there isn’t the overhead and effort associated with listing the property for sale. With cash, they can get a check.

Your Tax Refund is Part of the Bankruptcy Estate

On the day the bankruptcy is filed, any assets that you own become part of the “bankruptcy estate.” Your tax refund is one of those assets. A trustee is appointed to represent your creditors, collecting assets and liquidating those assets to pay your creditors. In many Chapter 7 cases, there simply are not enough assets or cash to make it worthwhile for the trustee to take those to pay the creditors.

Unfortunately, if you are owed a large tax refund, that may be an easy target for the trustee. With a little planning, we can help you keep most, if not all, of your tax refund.

Exception to the Rule: Earned Income Credit

There are some exceptions to the general rule that the trustee is entitled to any refund not received and spent prior to filing. In Colorado, for example, any refund attributed to Earned Income Credit and Additional Child Tax Credit is yours to keep. The rest is subject to turnover.

Want to Keep Your Tax Refund? Spend it.

The best way to avoid losing your tax refund is to file your tax return, receive the refund and spend it prior to filing your bankruptcy. Your bankruptcy attorney should instruct you to keep a record of how your refund is spent.

Your refund can be used for a variety of expenses, including most of your ordinary household expenses, like:

  • Rent
  • Mortgage payments
  • HOA dues
  • Food
  • Utilities
  • Clothing
  • Educational expenses
  • Medical and dental expenses
  • Insurance
  • Home maintenance and repairs
  • Car payment
  • Car repairs and maintenance

You want to have minimal — if any — tax refund money in your bank account on the day that you file your bankruptcy. You may also be eligible to save a portion of your refund using a retirement account. Ask your attorney for more information.

If you are able to follow these steps, you will not be required to turn over your tax refund.

Caution! If you spend your tax refund on luxury goods, use it to repay a friend or family member, or pay off a credit card or other unsecured debt, you may trigger an objection from the trustee, and be required to turn over your tax refund, even if you HAVE spent the money.

If you have NOT received your tax refund on the date of filing, the trustee will be entitled to the tax refund when you receive it.

When the Tax Refund Hits While You’re in Bankruptcy

Ideally, you’ll have very little tax refund left over by the time you’ve filed bankruptcy, and will avoid the plight of Mr. Ellman, below.

In Re Ellman involved a public school teacher in Baltimore, Maryland, who filed for chapter 7 bankruptcy and thereafter received a $15,827 tax refund. The case trustee filed a motion for turnover and the U.S. trustee appeared at the hearing in support of the trustee’s motion. The debtor argued that he relied on his tax refund for living expenses for the upcoming year and that his refund should be excluded from the bankruptcy estate as future wages.

Citing a long line of cases that include tax refunds as part of the bankruptcy estate, the court found the debtor’s argument unpersuasive and ordered that he turn over the funds minus approximately $10,000 he had available in unused exemptions. In total, Mr. Ellman was ordered to turn over $4,615 of his tax refund. To support its ruling, the court in In Re Ellman recited an uncontroversial rule of bankruptcy law that applies to tax refunds:

Income tax refunds are property of a debtor’s bankruptcy estate to the extent they are derived from withholdings from the pre-petition earnings of the debtor.

To put the court’s words in plain English, tax refunds received for wages earned prior to filing bankruptcy are considered property of the bankruptcy estate and are subject to liquidation if no exemptions are available.

Part of the job of any good bankruptcy attorney is to sit down with clients, discuss their assets and come up with a plan for maximizing the exemption laws to their client’s benefit. If you’re considering filing for bankruptcy and are unsure of how a large tax refund will be treated, consult with an experienced bankruptcy lawyer before making any further decisions.

How can you avoid this problem altogether? Don’t receive a tax refund

If you had a large tax refund last year, the first thing we will ask you to do is to look at your W-4 and adjust your exemptions. You only want to have the necessary taxes withheld from your paycheck, nothing more.

When you are filing for bankruptcy you DO NOT want to receive a tax refund. At a minimum, keep the tax refund small.

Instead of receiving a tax refund and giving it to the trustee, wouldn’t you like to have a little more money coming to you in each paycheck throughout the year? I thought so! You can use the IRS’ withholding calculator to determine how many deductions you should be claiming.

Other Bankruptcy Tax Refund Issues

If we file your case later in a year (between August and December), it is likely that the trustee will ask for a copy of that year’s tax return. I know this sounds strange since it’s September and you have not filed a tax return for the current year. The trustee may request a copy of the tax return for the current year as soon as you file it. He will then review the tax return to see if you are going to be receiving any refunds. If you are, he will ask for a pro-rata portion of the refund.

Since your initial appointment with the attorney may be several months before you actually file your case, we want you to plan for your bankruptcy by adjusting your payroll deductions to avoid having the trustee take your refund.

Free Consultation with a Utah Bankruptcy Lawyer

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506. Attorneys in our office have filed over a thousand cases. We can help you now. Come in or call in for your free initial consultation.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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How to Get a Divorce When you are Struggling Financially

It’s very difficult ending a long-term relationship and even more when doing so will put a toll on your finances. This is particularly true for stay-at-home moms who are financially dependent on their spouses. Divorce can be a costly process, particularly when children are involved. But there are ways to alleviate these financial burdens and strategically plan a successful divorce with the help of a Salt Lake City divorce attorney.

How to Get a Divorce When you are Struggling Financially

SOME THINGS THAT MAY HELP IN DIVORCE

  • Let’s start with your joint credit cards and any other department store card. You should cancel them before the divorce takes place. This will avoid a common problem divorcees have in court where a spouse is held responsible for the other going on a shopping spree.
  • Use joint funds to fix your car, home improvement projects, buying clothes for your children, or any other necessity. It’s best getting a divorce with everything fixed otherwise you will have to argue with your ex about who should cover these expenses.
  • Open a PO Box where all important correspondence with your attorney is kept safe.

SAVING MONEY

You can open an account in your name and save some money. You will eventually tell your ex but remember this money can help you pay for your divorce. It’s also helpful to apply for your own credit cards. It will help you establish your credit and help you find financial stability after all joint accounts are canceled. If you need some cash now, you can always borrow money from trusted sources.

MAKE SURE YOU GATHER IMPORTANT DOCUMENTS

Keep copies of your taxes, wills, financial statements, loan applications, insurance, car registration, etc. Even if you are not sure about getting a divorce, have these documents ready. Keeping an eye on your finances may help you get a good settlement. Keep a copy of all records of separate property, including gifts and inheritance. This belongs to you but you must prove is yours.

ALIMONY AND CHILD SUPPORT

Don’t relinquish your right to spousal support even when you think you don’t deserve it. If you waived your rights, you won’t be able to get them back. Instead of receiving monthly payments consider receiving a lump sum. Remember those monthly payments may never make it to your bank account. Avoid child support fights as it can get very costly. Tell your attorney you will rather follow the local guidelines.

MARITAL PROPERTY

Think about the stuff that you really want to keep. Don’t become greedy. It may be nice to keep your home but it’ll also cost you to maintain it. Think within your budget. Think about your degrees and their value and don’t forget assets such as vacation, flyer miles, subscriptions to magazines, timeshares, and insurances as they also have value that can be shared between both spouses.

HOW DO I PREPARE MY DOMESTIC VIOLENCE CASE?

When a person has been abused by someone he or she loves and trusts, it may take a great deal of effort to speak out. Often, victims are groomed by the perpetrators to believe that they deserved the abusive behavior. When he or she finally faces that person in court, it can be an intimidating event. There are guidelines that may be helpful to Utah residents who have experienced domestic violence at the hands of someone they care for that may offer them peace of mind.

Contacting any witnesses who may have seen the abuse occur or the injuries that resulted can contribute to a victim’s case, as testimony can be helpful in proving what happened. Any evidence or documentation that shows that abuse took place is important. This could include medical records, court testimony and police reports. Dated photos of injuries, 911-call audio tapes and other records are also relevant. If a victim does not have any of these, his or her testimony is still considered evidence and is very important.
Victims may find it beneficial to practice telling what happened prior to being asked to do so in court. It can help calm one’s nerves and help to recall any additional details that might have been forgotten. Being specific about what occurred and focusing on relevant information is crucial. Though it can be an emotional event — and there is nothing wrong with feeling emotional — it is still important to observe courtroom etiquette, such as being on time, being prepared and dressing appropriately. Concentrating on the truth and knowing that it is okay to not know the answer to or understand a question may be reassuring to victims.

There are many other helpful tips for pursuing a domestic violence case. Any Utah residents who are pursuing these types of charges as part of divorce proceedings may benefit from the advice of those who are experienced in this area. It may be difficult, but it can also be the first step to a new future.

Free Consultation with Divorce Lawyer in Utah

If you have a question about divorce law or if you need to start or defend against a divorce case in Utah call Ascent Law at (801) 676-5506. We will fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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Friday, April 6, 2018

Establishing Legal Paternity in Utah for Child Support

Because I am a lawyer in Utah, I’m often asked about issues with child custody and child support. When it comes to child support in Utah, both parents are responsible for ensuring their child has sufficient funds. It becomes a more complicated matter if legal paternity is not established, even if the biological father is known.

Establishing Legal Paternity in Utah for Child Support

Despite being the biological father, without official paternal establishment, a man does not have the legal rights or responsibilities of being a father. These include custody, visitation and child support. In order to establish the rights of the father, there is a formal application process for legal paternity. This typically requires submitting some paperwork and might also include a DNA paternity test, depending on the support of the mother.

According to Paternity Matters, in Utah, the definition of paternity includes the legal recognition of the father. The state, the child, the mother or the biological father might initiate this process. It is typically done through submitting the Voluntary Declaration of Paternity, which is issued by the Department of Health, Office of Vital Records and Statistics. It is provided free of service at the birth of the child, but can be submitted at any time after the birth for a fee.

For this to be done, both parents must hear a message or watch a movie, read the official legal notice and then sign the document with witnesses. This establishes legal paternity, which also adds the father’s name to the child’s birth certificate. After this document is submitted, the legal father will be responsible for child support, so the mother has the right to file an order.

Paternity establishment typically occurs when a woman is unmarried, since for married women, the paternity is assumed to belong to the husband. If this is not the case, then a Utah Voluntary Declaration of Paternity or some other legal order provides the paternity rights to the biological father rather than the husband. This information is intended to educate only and should not be considered legal advice.

COLLABORATIVE LAW WELL-SUITED FOR MATURE DIVORCES

Because couples experience so many different fond memories and difficult times together, no two Utah marriages are the same. And because of that, every divorce is also unique. As it turns out, collaborative divorce may be particularly fitting for one specific demographic of couples across the country since the group is faced with several unique opportunities and challenges during the divorce process.

Since collaborative divorce incorporates several legal and financial resources into the process, relying on the valuable insight of figures like financial advisors and experienced family law attorneys to help divorcing parties come to a mutual agreement on their own, it’s an effective option for couples seeking a divorce after many years of marriage. The number of long-term married couples filing for divorce has increased considerably in recent years, and many of which do so because they feel disconnected from one another after their children leave home. As a result, these couples do not experience many of the issues that contribute to other divorces and divorce disputes.

Despite the fact that older couples in the midst of divorce proceedings may not typically come across such issues as child custody and/or support arrangements, they may encounter concerns over factors like spousal support. Alimony is often considered in cases where one party relied on the financial support of the other, but such arrangements are often temporary. Therefore, it is in the best interest of individuals to think about how their collaborative divorce may affect their financial situation.

Given that so many people are living full and productive lives well into their later years, it’s important that sound legal counsel is obtained to help ensure that those seeking divorce after decades of marriage come to a fair and reasonable agreement.

Free Consultation with Child Support Lawyer

If you have a question about child support or if you need to collect back child support, please call Ascent Law at (801) 676-5506. We will aggressively fight for you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
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