A Bankruptcy Lawyer’s Blog

Oftentimes people going into bankruptcy realize that they will loose most of their assets. Trying to avoid creditors from taking away some of their precious possessions they attempt to distribute them, sometimes to their loved once. However, large transfers of assets can raise suspicion in a trustee, judge or even in creditors.

Today the Fraudulent Transfer Act allows creditors to undo some unfair transactions that occurred prior to the bankruptcy. One type of a transaction that can be undone is when an asset is transferred for a fairly low price at a time when the debtor was insolvent. Debtor is insolvent when his liabilities exceeded his equity. An example of such a transaction can be seen when Mr. Smith decides that he wants to sell his 40,000 dollar Mercedes to his neighbor for 20,000 dollars. Having no liens on the car, makes the Mercedes part of an asset that creditors would be allowed to get in a chapter 7 bankruptcy. Prior to the transaction, between Mr. Smith and his neighbor, the creditors would have gotten at least some of their investment back, partial value of the Mercedes. However, after the transaction, the creditors will only be able to get 20,000 dollars that Mr. Smith got from the sale of the Mercedes. This is of course assuming that Mr. Smith still has the money. The Uniform Fraudulent Transfer Act allows the transfer to be undone and the creditors to get the Mercedes back from the neighbor.

The statute makes perfect sense. Mr. Smith transaction is seen as a presumptively fraudulent transaction. After all the 20,000 dollars that Mr. Smith is giving away to his neighbor, in the form of the Mercedes, is actually not his but his creditors. So in fact it is fraud, presumptive fraud.

For more information about Real-Estate-Transfers, visit the popular blog at http://newinfopost.com/bankruptcy/fraudulent-transfers

Yes, you read that correctly. Debit audits are officially back as of May 12, 2008. This is despite the fact that the panel trustee already examines the debtor, and despite the fact that the U.S. Trustee already reviews every petition filed with the Clerk. The new notice from the office of the U.S. Trustee, dated May 9, 2008, clearly states that the U.S. Trustee will resume debtor audits.

Isn't the U.S. Trustee technically doing debtor audits when bringing 2004 Exam Subpoenas? Isn't the U.S. Trustee already seeking tax documentation and proof of income through these 2004 Exam Subpoenas? Of course. However, they are not technically considered audits as mandated in Section 603(a) of Public Law 109-8, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Personally, I am still looking for the consumer protection portion of the Act. I know I saw it somewhere, but I just don't see how the consumers are really being protected. I suppose that the reaffirmation hearings are some sort of consumer protection. Or you could say that the hearings are just another burden placed on the debtor to convince the court that the debtor can afford his or her car. This often requires additional time off of work, but that's the debtor's problem. It will just make it a little harder to pay for the car on time.

I would have simply called the Act the Bankruptcy Code and I would have subtitled a section of that Code, Abuse Prevention. Anyway, sorry for my digression. The reason that the debtor audits were suspended was due to budgetary reasons. I suppose everyone associated with bankruptcy, including myself, is spending more money than they did prior to bankruptcy reform. As for the upcoming audits, they will be limited to 1 out of every 1000 cases as opposed to 1 out of every 250 cases as before.

Lastly, I don't recall how many cases were dismissed or how many discharges were denied due to a debtor's failure to pass the audit. Were these audits simply attempts to demonstrate the type and extent of abuse promulgated by debtors? If so, will auditing 1 out of 1000 cases have any impact at all?

The truth is simply that the U.S. Trustee is doing just what the Act mandates. I would suggest that instead of robotically adhering to all provision of the Act, we should instead, make some revisions. The reforms laws may have looked good on paper to those who lobbied eight years for the changes. But looking good on paper and having an actual positive result are two different things. It's o.k. to admit that and to acknowledge that. Now, an effort should be made to smooth over the rough spots and to clarify some of the ambiguities. Otherwise, we will continue to wade in the minutia, all the while pretending to be walking on soft, sandy beach. If the debtor audits produced little fruit and if the cost of said audits was prohibitive, why not look to make a change. Throw it back to the lawmakers to make it right. If everyone works together, it can probably get done within the next eight years.

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Hiring a bankruptcy attorney can make the bankruptcy process a lot easier. If you are considering bankruptcy, it is important to know all that you can about it so that you can make an informed decision. Speaking with an attorney who specializes in this area will help make it go much smoother. Here is some information about bankruptcy.

Filing a Chapter 7 bankruptcy is often called personal bankruptcy. This basically wipes away the personal, unsecured debt that is included in the filing. There are a lot of stipulations that go along with Chapter 7 bankruptcy. Many people are not allowed to keep valuable property like real estate or vehicles. There are some exemptions, and a good bankruptcy attorney will be able to tell you about these exemptions and help you make the most of them.

Chapter 13 bankruptcy does not necessarily erase your debt, although some debts may be forgiven. It is more a reconstruction of your debts and the past due amounts. You are more likely to be able to keep things like your house and vehicles. This form of bankruptcy is looked on a little more favorably because you are making an attempt to pay back your debts. This is a very complex form of bankruptcy, and it is best to have a good bankruptcy attorney to help you come up with a workable plan and deal with the courts.

Bankruptcy is a very complicated process. Many people mistakenly believe that they can do it themselves just as well. That is just not so. Bankruptcy attorneys charge a fee plus court costs and filing fees. In many cases this can be rolled into a payment plan to make it more affordable. It may seem like a lot of money, but it is truly a worthwhile investment. A bankruptcy attorney will save you more than you are paying him by knowing the ins and outs of the system, and how it applies to you.

Did you know that you may not even be able to file bankruptcy? Especially with the recent changes in bankruptcy law, the courts must now approve you to file, and that approval is not the automatic thing that it used to be years ago. Each case is considered individually, but must still be approved in order to proceed with the whole process, and a good bankruptcy attorney can present your case in such a light that your chances of approval are much greater.

It can be confusing to understand the new bankruptcy laws and how they pertain to your situation. Which chapter should you file? Do any exemptions apply to you? Can you keep your property? What will you have to sell? These are some of the complex questions that a good attorney can help you figure out. In some cases, bankruptcy may not even be the best solution for you. You won't know unless you consult an expert.

Bankruptcy is not a simple thing. There are many intricacies that make it confusing for people who do not have any training in it. Determining which chapter is the most appropriate for your situation is not always cut and dry. It is always best to consult a reputable bankruptcy attorney before you begin this life altering process.

For more insights and additional information about using and finding a good Bankruptcy Attorney as well as getting a free bankruptcy evaluation from a qualified bankruptcy attorney local to you, please visit our web site at http://www.bankruptcy-data.com/knowing-when-i-need-a-bankruptcy-attorney.php