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What effect does marital status have on federal taxes?

Marriagetaxes Family-Law

What effect does marital status have on federal taxes?

A married couple can file a joint tax return in which both spouses report their respective incomes. This may result in a lesser amount of federal income tax being due than if each spouse had filed a separate tax return as single persons (especially if one spouse has a relatively high income in comparison with the income of the other spouse). The opposite may be true for working couples filing jointly; they may pay more income tax than they would have had they filed as single individuals.

Each spouse is prohibited from filing an income tax return as a single person or head of household. The choices available are either a joint income tax return or married filing separately. The income tax filing of married filing separately typically results in the highest level of taxes being paid.

Spousal support paid to a former spouse pursuant to a judgment of dissolution, pursuant to a legal separation agreement or pursuant to a judgment of nullity can be used as a deduction on the payer’s income tax return, with the payment of spousal support being included in the taxable income of the recipient. Payment of spousal support in the absence of a judgment of dissolution of marriage, legal separation or nullity is neither deductible by the payer nor included as income of the recipient (treated as a gift between spouses).

A payment to a spouse under a divorce or separation instrument is alimony if the spouses do not file a joint return with each other and all of the following are true:

(1)The payment is in cash;

(2) The instrument does not designate the payment as not alimony;

(3) The spouses are not members of the same household when the payments are made;

(4) There is no liability to make any payment after the death of the recipient spouse;

(5) The payment is not treated as child support (this is the case if the payment is reduced either on the happening of a contingency relating to your child, or at a time that can be clearly associated with the contingency).

If the payment is alimony, it is deductible by the payer and it is income to the recipient. If payments are labeled as “family support,” and no specific sum or percentage is specifically designated as child support, the entire payment is taxed as alimony. If the payment is not alimony, it is neither deductible by the payer nor includible in the income of the recipient.

Transfers of property to a spouse or a former spouse incident to a divorce does not result in taxable income to the recipient.

Spouses can make unlimited gifts to his/her respective spouse during lifetime without incurring any gift tax.

Spouses are able to leave money and property to the surviving spouse without incurring any estate tax (although there may be an estate tax payable upon the death of the surviving spouse).

What effect does bankruptcy have on child support?

Child Support Bankruptcy Consumer Bankruptcy

Free Case Evaluation From An Experienced Bankruptcy Attorney.

What effect does bankruptcy have on child support?

Filing for bankruptcy protection does not allow your ex to discharge past due child support obligations. Any back payments owed for child support cannot be discharged in a bankruptcy proceeding. The automatic stay does not apply to child support collection efforts.

Under the post-October 17, 2005 rules, domestic support obligations are top priority in a Chapter 7 “asset case”, where there are funds to pay creditors. The debtor should file a proof of claim to have most of his or her liquidated estate used to pay off the child support obligation.

In a Chapter 13 case, your back child support payments will be paid through your Chapter 13 plan, in addition to the regular payments due after the petition date. These support obligations must be current in order to have your Chapter 13 plan confirmed. Moreover, to obtain a discharge in a Chapter 13 case, the debtor will have to certify that all post-petition child support obligations have been met.

To put it another way, your ex’s bankruptcy case shouldn’t have any long-term effect on child support payments – and may even make it easier for him/her to make them, because he/she won’t have as much other debt – but will complicate enforcement in the short term. Practically speaking, you will need an attorney’s help.

(Reviewed 11.14.08)

What other collection remedies are available?

Collection Child Support

What other collection remedies are available?

The following are other alternative courses of action:

Government: Many states have empowered local government agencies (such as the Office of District Attorney) to collect child support for an obligee parent. Under law, the local agency may (or must) take action to collect outstanding child support arrearage. Resources, such as parent locator services, and a staff of attorneys/clerks, are available to local agencies to assist in collecting court ordered child support.

Tax refund intercepts: Local agencies have the authority to follow a procedure to “intercept” federal or state tax refunds which otherwise would be paid to the obligor parent. Also, local agencies can provide information about child support arrearage to consumer credit reporting agencies who are then required include such information in the agency’s report. Although local child support enforcement agencies can be slow, because of the additional resources available to them, their assistance should be requested as part of the overall effort to collect a child support arrearage.

Real estate liens: A “judgment lien” based on child support arrearage can be recorded against real estate owned by the obligor parent in the county in which the property is located. When such a lien is recorded, the real property becomes security for the payment of the judgment. A judgment lien for child support is then paid from the proceeds of the sale when the property is sold. A judgment lien against real property should be established whenever an obligor parent owns real property that has an equity value (that is, the amount of all outstanding liens, including mortgages, is less than the fair market value of the property).

Civil contempt of court: A more complex proceeding is an action for contempt. Since payment of child support is a direct order by a court to pay, failure to pay is treated as a contempt of a court order. In this proceeding, which is quasi-criminal in nature, the obligee parent must prove to the court that the obligor parent had the income from which support could have been paid. Although a contempt proceeding is complex, it certain to gain the attention of the obligor parent.

Since collection of child support can be difficult, professional assistance is often needed. Child support judgments can easily reach many thousands of dollars a year, and the cost of professional assistance is justified, since those who are familiar with collection procedures often obtain favorable results.

Who gets paid first in a business bankruptcy?

paid bankruptcy business bankruptcy

Who gets paid first in a business bankruptcy?

The order in which payments are made is fixed by Federal statute. The general rule is that the persons who take the least risk are paid first.

First priority usually goes to persons who become creditors AFTER the company files for bankruptcy. The purpose of this is to enable the company to continue its operations and/or to effectively wind down its affairs.

Secured creditors, such as a bank lending money backed by a mortgage on real estate, typically bargained for taking less risk. Assets of the company usually back the credit that they extend. They know they should get paid very early on the list if the company declares bankruptcy.

General creditors, such as suppliers of goods and services, and other lenders and bondholders, have a greater potential for recovering their losses than stockholders, because bonds represent the debt of the company and the company has agreed to pay bondholders interest and to return their principal.

Stockholders own the company, and take greater risk. They could make more money if the company does well, but they could lose money if the company does poorly. The owners are last in line to be repaid if the company fails. Bankruptcy laws determine the order of payment.

Unsecured creditors are last in line.

(Reviewed 11.10.08)

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My spouse is dying from asbestosis. What happens to our family after he dies?

Asbestosis Family Death Injury Law

My spouse is dying from asbestosis. What happens to our family after he dies?

If your spouse has an asbestos lawsuit filed on his behalf before his death, his estate will take over the case and any damages will be awarded to the estate and divided among his survivors as would any other asset of the estate. Unless your spouse makes specific provisions in his will, most or all of the money will go to you as the surviving spouse. Depending on where you live, smaller amounts may be reserved to go to children directly.

Additionally, after your spouse dies, family members can institute a suit for wrongful death, seeking damages for loss of companionship, burial expenses, loss of economic benefit, and other losses related to your spouse’s death. Many of these damages are extremely subjective and putting a dollars and cents value is probably one of the most difficult tasks for the courts. There are many, many factors that must be taken into account to determine how much money to compensate an injured person. However, both the insurance companies and the courts have experience in determining how to value the loss of a relationship, how much your spouse could have contributed to the family wealth, and how much your emotional distress at watching your spouse die from asbestos exposure related complications is worth.

See our section on non-economic damages for more information.

Bankruptcy Exemption Definitions

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Bankruptcy Exemption Definitions

Equity: Some exemptions cover a limited amount of ownership interest in the property. For example, a state may allow an exemption for $1,200 equity in a motor vehicle. If you have a car with a blue book value of $8,000 and you still owe $5,000 on your car loan, your equity in the car is $3,000. The bankruptcy trustee could sell your car, give you your $1,200 exemption and use the rest of the $3,000 to pay your creditors. If your residence is a motor home currently worth $90,000, but you owe $80,000, your equity is $10,000 and you only need that amount in homestead exemptions to keep the mobile home.
Value: To determine equity you have to know the value of the property. For purposes of bankruptcy this is the resale value of the property in the current market, not the replacement or purchase value. To value real property you have a real estate agent look at recent sales of similar property in your area. You look at the blue book value of motor vehicles. For used equipment, appliances, household goods, and so on, you can determine the value by looking at similar items on Craigslist, E-Bay, at thrift stores, and flea markets. It’s your responsibility to do this research.
Homestead: A homestead exemption concerns property that you are using for your residence at the time you file for bankruptcy. The definition of what is included within this exemption varies somewhat from state to state and in the federal exemptions, but it can include land, buildings on land, a motor home, a mobile home, a boat, a co-op apartment, or condominium.
Wildcards: Several states have created a “wildcard.” This is an exemption that you can apply to any property. For example, if you own a car in Vermont worth $9,000 and the exemption for motor vehicles is $2,500, you can use the $7,000 the state allows as a wildcard to make up the difference. You can also use a wildcard to exempt property that isn’t listed as exempt, such as a painting. The value of the wildcard is different according to which state you live in.
Click here to read an Introduction to Bankruptcy Exemptions.

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An Introduction to Bankruptcy Exemptions

intro-to-bankruptcy-exemptions bankruptcy-law

An Introduction to Bankruptcy Exemptions

Figuring out which bankruptcy exemptions to use and how to use them is one of the most challenging parts of filing for bankruptcy. It’s difficult because bankruptcy law is a confusing mixture of federal and state law. Although the US Constitution gives the federal government the power to pass laws about bankruptcy, the federal government also gave each state long ago the authority to choose which properties a debtor can keep when he or she files for bankruptcy. The laws protecting these properties from creditors and the bankruptcy trustees are called exemptions.
Bankruptcy Estate
When you file for bankruptcy, the property you own at that point (and sometimes shortly after that), is part of what is called your bankruptcy estate. Federal law determines what is included in your bankruptcy estate. Every state’s exemptions automatically include these. For example, 11 U.S.C. §541 excludes certain educational funds-monies you’ve put in an educational retirement account or a qualified state tuition program for the benefit of your child or grandchild-from your bankruptcy estate. To qualify the funds must have been deposited more than a year before you filed for bankruptcy. Funds deposited into plans more than one year but less than two years before the bankruptcy filing are excluded to the amount of $5,000.
Property that is included in your bankruptcy estate under federal law can be taken and sold to pay your creditors, unless it is exempt.
A Choice Between State and Federal Law Exemptions
Some states have created their own set of exemptions that replace the federal list entirely, while others offer a choice to the debtor of using federal or state depending on his or her circumstances. California offers residents a choice between two sets of exemptions, but both come under California state law.
States where you have the choice of using either the federal exemptions or the state exemptions (you never get to use both at the same time) are: Arkansas, Connecticut, District of Columbia, Hawaii, Massachusetts, Michigan, Minnesota, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Texas, Vermont, Washington, and Wisconsin.
Federal exemptions differ from state exemptions and state exemptions vary from jurisdiction to jurisdiction. For instance, the maximum exemption for a car in Florida is $1,000, while in Texas it can be up to $30,000. In some states, a debtor’s residence can never be taken, no matter how valuable it is, while in others the protected value is less than $10,000. This means that how much you lose to creditors or have to give up when you file for bankruptcy depends largely on where you live.
If you use the state exemptions in any state, you can also claim certain exemptions set by federal law as well as those listed in the federal nonbankruptcy exemptions. Are you beginning to see why it’s so confusing?
Wildcards
Several states have created a “wildcard,” which is an exemption that you can apply to any property. For example, if you own a car in Connecticut worth $2,500 and the exemption for motor vehicles is $1,500, you can use the $1,000 the state allows as a wildcard to make up the difference. You can also use a wildcard to exempt property that isn’t listed as an exemption, such as a piece of art. The value of the wildcard, like other exemption amounts, varies from state to state.
Residency Requirements
On top of the state versus federal law options, you must also pay attention to the residency requirements. The 2005 revisions to the bankruptcy laws created new residency requirements for debtors. Congress wanted to discourage people from moving to states with more liberal exemptions and then filing for bankruptcy. You must, therefore, have lived in a state for two years before you can use that state’s exemptions. If you have lived there for less than 2 years, you count back 2 years from the date you file for bankruptcy and then look at where you lived for the 180 days (6 months) before that. Whichever state you have lived in for the longest time during that 6-month period is the state whose exemptions you can use. Some states, though, don’t allow you to use their exemptions unless you currently live in that state. If you get caught in this gap, you’ll have to use the federal exemptions.
Although you can’t use state exemptions if you have lived in a location for less than two years, you can use the federal exemptions after only 91 days if the state where you’re filing allows you to. For example, if you want to use the federal exemptions but live in New York, where they are not allowed, you can move to New Jersey, live there for 91 days and file for bankruptcy in New Jersey using the federal exemptions. If you have lived in a new state for less than 91 days, you must either file in the last state you lived in for more than 91 days or wait to file your bankruptcy until after you’ve lived in your current state for 91 days.
How to Choose Between Exemptions
The exemptions that work best for you will depend on the property you most want to protect. If your priority is to protect your home, you will focus on homestead exemptions. If your state’s homestead exemption is larger than the federal exemption of $20,200, the state exemptions might work better for you. If your main asset is a motor vehicle, you will look at the amount of exemption available for a car, as well as any wildcard amount.
For example, the federal exemptions (and the alternate California exemptions) allow you to use at least part of the homestead exemption as a wildcard for other property. This means under the federal exemptions, you can exempt $3, 225 for a motor vehicle and add up to $10,125 of the unused homestead exemptions as a wildcard, plus the federal wildcard amount of $1,075. For people who don’t own their homes, the federal exemptions and the alternate California exemptions are usually more favorable.
Single or Married
In some circumstances, a married couple filing a joint bankruptcy can double the amount of exemptions. You may always do this under the federal exemptions, if they are available in your state. State exemptions, however, sometimes allow you to double the exemption amount and sometimes they don’t. You’ll need to check your state’s exemptions carefully.
If you intend to double the exemptions amount for a single piece of property, such as the homestead exemption on your residence, the property must be jointly owned by you and your spouse. Otherwise, you can only take one exemption.
Filing for bankruptcy is a lot easier with the help of a local bankruptcy attorney.
Click here for information on specific state bankruptcy laws.

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I was injured. What law governs my ability to recover damages?

Recover Damages Law Injury Law

I was injured. What law governs my ability to recover damages?

There is a large body of law that governs your right to recover for personal injuries you sustained.

First, some basic questions:

What caused the injury?

If it was an auto accident, you’ll want to visit our section on Auto Accidents.

Was it a swimming or boating accident?

A bus, train or plane accident?

A “slip and fall”?

A defective or dangerous product?

Malpractice by a doctor, dentist, lawyer, accountant or other professional?

Somebody defamed you, with a slander or libel?

Was the injury caused by someone’s intentional act? That may give rise to punitive damages.

Where did the accident occur?

The law of that state will generally govern your rights to recover.

If the accident occurred “at work” or “in the course of your employment”, then Worker’s Compensation Laws may govern.

When did the injury occur?

There are requirements for giving timely notice of your claim and/or “statutes of limitation” that require you to file suit within a certain time limit. These limits vary greatly state by state and by type of matter. If you don’t give timely notice you forever lose your ability to obtain recovery.

NEVER JUST LOOK AT THE STATUTE OF LIMITATIONS AND CONCLUDE “THE TIME HAS EXPIRED, IT’S TOO LATE”. There are many things that sometimes extend or “toll” the time limits, including a party’s lack of knowledge of the facts and circumstances, lack of manifestation of the injury, false statements or fraud, or mental incapacity or infancy.

One injury may sometimes give rise to several different rights or theories of recovery, so even if you can not recover on Grounds A you still may be able to recover on Grounds B.

Who was injured?

You — as well as your spouse — may be entitled to recover for an injury to just one of you.

The family or estate of a deceased may be entitled to recover for the person’s wrongful death.

What was the extent of the injury?

The amount of recovery you can obtain often depends on the nature of the injury, its duration (permanent or short term), your out of pocket costs (such as medical expenses, your loss of salary or wages, damage to property), the residual impacts (such as an inability to engage in sports, etc.), the pain and suffering you incurred, and the skill and experience of your lawyer.

Who was responsible for the injury?

The person you think may be responsible may be just one of many responsible. For example, if you were injured by a car that went out of control, not only the driver of the car may be responsible, but the car’s owner, the driver’s employer, the manufacturer of the car and the brakes that failed and the repair shop that didn’t adjust them properly.

Even if you think you were fully or partially responsible, you may still be able to recover — in full or in part. People often blame themselves or feel guilty when the injury was not the result of anything they did wrong.

WARNING: IF A STATE OR COUNTY OR MUNICIPALITY MAY BE LIABLE (such as when a transportation facility operated by governmental unit is responsible for the injury) THERE OFTEN ARE VERY SHORT TIME LIMITS TO GIVE NOTICE OF A CLAIM.

What is Intellectual Property?

Intellectual Property Intellectual Property Intellectual Property

What is Intellectual Property?

In contrast to real estate and physical property, Intellectual Property refers to what the minds of men and women have created.

Intellectual Property Law includes the fields of law governing Copyrights, Patents, Trademarks and Trade Secrets. (Click for an informative article that gives an excellent overview of what constitutes intellectual property law.) Because Communications Law and Computer Law and Internet Law are so heavily intertwined with Intellectual Property issues, we are including those topics in this Practice Area as well.

What is Chapter 13 bankruptcy?

thirteenth chapter bankruptcy-law

What is Chapter 13 bankruptcy?

Chapter 13, which has also been known as a wage earner’s plan, is an interest-free repayment plan where a debtor repays at least some of his or her unsecured debts with regular payments over five years. Under the new bankrtupcy law, effective for filings on and after October 17, 2005, more bankrtupcy filers will have to choose Chapter 13’s repayment plan because of the application of a complicated, two-part means test.

Generally the creditors expect to get more than they would have received from the debtor’s estate if the debtor had sought a complete liquidation under Chapter 7 Bankruptcy.

One of the important benefits of Chapter 13 is that the debtor generally can more easily continue to live in his or her home. If the debtor fails to comply with the Chapter 13 plan, the Court will usually dismiss the bankruptcy case

Another advantage of Chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the Chapter 13 plan. Doing this may lower the payments.

The disadvantage of Chapter 13 to the debtor is that the debts can linger for years, burdening future income.
(Reviewed 11.9.08)

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