Hi, I’m Mike Greiner, I’m a bankruptcy attorney here with The Financial Law Group here in Warren, Michigan. Our website is financiallawgroup.com, and our phone number is (586) 693-2000. And I’m here to talk to you today about taxes, an issue that none of us like to talk about. Taxes are actually dischargeable in some cases in bankruptcy, and that usually a big surprise to most people. Most people think that, if the, if the federal government or the state is coming after you, there’s nothing you can do about it, and that’s actually not the case.
If you have a tax debt that’s more than three years old and there’s a good chance that that tax debt would be dischargeable in bankruptcy. That’s as long as you’ve filed your tax return on time. The way that you calculate the amount of time that has to be is if you look at the date that the tax was accessed, for example the date that you filed the tax return or that the last date the tax return could have been filed. So, say, April fifteenth, and then go three years from that date. Any taxes that are more than three years old based on that calculation would be the type of thing that would be dischargeable in bankruptcy. Now, even if the tax that is newer than that, it is still something that could be handled in a bankruptcy. In those cases we might look at a chapter 13 case.
What we can do, we can file the case. We will set up a payment arrangement, essentially, with the IRS that will allow you to pay back the taxes generally speaking interest free over 5 years. Usually, that’s a better deal than you’ll get working directly with the IRS, although, not always. That is an option for people who might have tried to do something with the IRS but wasn’t quite able to work something out or if the tax is a smaller amount of money such as, $10,000, where it would be the type of thing that would be a reasonable payment over time. That has worked out quite well for a number of my clients as well. If you owe some tax liability and are interested in talking about some of your options please feel free to give me a call at my office. I’d be happy to meet with you personally. My phone number is 586-693-2000.
Posted by Michigan Bankruptcy Attorney - Michael GreinerFeb 06, 2012
The Means Test for Bankruptcy- Warren Attorney, Mike Greiner
Hi. I’m Mike Greiner. I’m an attorney with the Financial Law Group here located in Warren and we specialize in bankruptcy law here at the financial law group. Our phone number is 586-693-2000. Our website is financiallawgroup.com. And I’m here to talk to you today about the means test for bankruptcy. A lot of people are concerned that since the change in the law a few years ago, that they might not be eligible for chapter 7 bankruptcy anymore. And what I’ve found is that most people that come into my office who are concerned about that, are actually eligible for chapter 7 bankruptcy. In fact, right before the law changed there was a big rush by people to file bankruptcy thinking that they wouldn’t be able to file bankruptcy after the law changed and really, for most of those people, they could have easily filed Chapter 7 bankruptcy.
The requirements for income for your household size are actually quite high and most people who would be eligible for chapter 7 bankruptcy because of the fact that they have a lot of debt would still be eligible for chapter 7 bankruptcy under the, under thee change in the law. The big change in the law was the means test. The means test only applies if most of your debts are related to your consumer affairs as opposed to business affairs. So if you’re a business person and you’ve accumulated a lot of debt related to your business affairs then to start with, the means test doesn’t even apply to you so you don’t even have to worry about it from that point.
Then what happens is the means test looks at the average household income for you. Your household is the total size of all the dependents that you’ve got living with you. Just because someone’s not a dependent for tax purposes doesn’t mean they’re not a dependent for bankruptcy purposes. So, say you’ve got a son or daughter who’s 25 years old, living with you. That person might not be someone you can claim on your taxes as a dependent, but may still for all practical purposes be a dependent of yours. And so, as a result, the courts have ruled that they could be dependent for bankruptcy purposes. So that also helps expand the size of your household.
Similar situation could be an elderly relative who’s living with you may only receive Social Security. Then what you do is you take a look at all the household sources of income and add them together for the last 6 months and divide that by 6. You come up with an average monthly income over the last 6 months and then that amount gets compared to the average household income for a family the size of your household in Michigan. And you should know in terms of income certain types of income are excluded from this. For example Social Security income, anything related to the Social Security Act and that includes for example unemployment compensation. Those are not considered income for the purposes of the means test. So again that could be something else that makes you eligible for the means test where you might not have thought you were eligible for it. Then if your higher than the average household income for family or size in Michigan, then you continue on. You can take certain deductions, to see if those deductions make it so your eligible. So say for example, if you have high child care costs. If you have to pay child support or alimony. If you have a higher mortgage payment, often times that can make it so you’re eligible for chapter 7 bankruptcy, where you might have been in the past. Also, you can take deductions for charitable contributions you make. If you make regular charitable contributions, to church. Say for example, a lot of my clients have tithed. And for them, that would be the type of thing that would be a deduction that you can take on the Means test.
I’ve also had clients who have union dues, or large deductions for insurance- health insurance, for example, or even disability insurance. Those would be deductions you can take. Life insurance, term life insurance would be a deduction you can take. So, you can see there are a lot of deductions that you can take that might be able to make you eligible for Chapter 7 bankruptcy, where you might not have been eligible for Chapter 7 bankruptcy in the first place.
My suggestion is come into my office. Give us a call 586-693-2000. I’ll be happy to sit down with you and look at all your sources of income. And talk with you about your situation and see if you are eligible for Chapter 7 bankruptcy. But don’t just assume. Because of the fact that if you look at the kind of income you have coming into your household that’s more than you thought would make you eligible for chapter 7 bankruptcy, don’t assume that your automatically ineligible, cause there could be ways working through the means test, that you would become eligible and certainly worth taking the time to look at.
Posted by Michigan Bankruptcy Attorney - Michael GreinerSep 02, 2011
Attorney Mike Griener of Macomb Michigan Discusses Taxes in Bankruptcy
Hi, my name’s Mike Greiner. I’m a lawyer with the financial law group located here in Warren, Michigan. And we specialize in bankruptcy law and debt creditor law here. My phone number is 586-693-2000. My website is financiallawgroup.com. I’m here to talk to you today about taxes and whether they’re dischargeable in a bankruptcy. One of the big surprises that a lot of people have is that taxes, if they’re older that three years old, under most circumstances can be dischargeable in a bankruptcy case.
Even if they’re less than 3 years old. There might be something we can do to address your tax liability through a chapter 13 case. Put together a payment arrangement which usually is over a longer period of time and lower interest rate than either the IRS or state is willing to work out with you.
For more recent tax liabilities where it’s a large tax liability and what you wanna do is try to find some kind of settlement. We actually don’t handle that but I can recommend a CPA in particular, located here in Michigan. His name is Mike Franskoviak, and he can do negotiations with the IRS or the state to come up with a lower tax liability for you that you can pay off. Say for example if you could borrow money out of a 401k or an IRA or something like that to pay it off. But for old tax liabilities I certainly recommend that you look at a chapter 7 bankruptcy because that could wipe out the tax debt. Even more recent ones, Chapter 13 could help you pay it over time, with really very low interest rate. And over a longer period of time than you might have otherwise. If you want to discuss issues related to tax liability and bankruptcy.
Please feel free to give me a call. I offer free consultations. My phone number is 586-693-2000 and my website is financiallawgroup.com.
Posted by Michigan Bankruptcy Attorney - Michael GreinerAug 26, 2011
Domestic Support Obligations and Bankruptcy- Attorney Mike Greiner
Hi my name’s Mike Greiner, I’m a bankruptcy attorney with the Financial Law Group located in Warren, Michigan and I’m here to talk to you today about domestic support obligations and bankruptcy.
Domestic support obligations are non dis-chargeable in bankruptcy, so don’t even ask about it. One of the bigger concerns that I’ve seen though is where the other spouse or the ex spouse comes in and is concerned about the facts that child support that’s owed for example, it would be discharged when someone files a bankruptcy. That type of debt is non dis-chargeable in bankruptcy and there’s nothing that the ex-spouse can do to get rid of that.
You as the ex-spouse who is owed this money, you do not need to do anything to make sure that that debt gets protected as your former spouse is going through their bankruptcy. That type of debt is non dis-chargeable under any circumstances. It does not require any kind of law suit or any kind of action on your part to make sure that it does, that it does stay non dis-chargeable. There are certain kinds of debts that are created that through bankruptcy that might require something action on your part to make sure that they stay non-discharged- for example: I have 1 client who as part of the divorce decree. The spouse who filed for bankruptcy was going to be responsible for certain tax debts. My client was concerned by the fact that she was being chased by the IRS, so she ended up paying the tax debt and then ended up suing this other person, the ex-spouse who is filing bankruptcy to try to collect on that tax step-down that she paid.
The attorney for the spouse who filed bankruptcy believed that, that debt would be discharged in the bankruptcy. I do not believe it is, but either way when there is a circumstance like that, what I would suggest is that we actually take steps to make sure that the court order gets entered stating clearly that the debt is not discharged to the bankruptcy case. There is a time limit during which that needs to be done and it’s typically within two months after the first meeting of creditors or sometimes in some cases, even a month after the first medium creditors. So there’s a very limited of time during which you have to take steps. If you’re concerned about the destructability of certain kinds of domestic support obligations, feel free to give me a call. I offer free consultations at my office. We’re located here in Warren at 12 and Hoover. My phone number is 586-693-2000 and my website is financiallawgroup.com.
Posted by Michigan Bankruptcy Attorney - Michael GreinerAug 26, 2011
Hi, my name’s Mike Greiner and I’m a bankruptcy attorney here at the Financial Law Group located in Warren Michigan in Macomb County. Our website is financiallawgroup.com and our phone number is 586-693-2000. We do offer free consultations for bankruptcy clients. I’m here to talk to you today about taxes and bankruptcy. Now there are a couple ways that we can address tax liability in bankruptcy cases. One is if a tax debt is more than 3 years old, often times we’re able to get that discharged through Chapter 7 bankruptcy case. So if you’ve got older tax debts where there has not been a tax lien or if there’s no real estate that you own that that tax lien can attach to. Then, often times, we can get rid of that debt through bankruptcy, and that’s certainly something worth thinking about. That’s the first thing. The second thing that can be done is, even if a tax debt is more recent we’ve been able to do chapter 13 cases to resolve the payments on the taxes. Often times, the chapter 13′s are able to get rid of certain penalties, certain interests, and that type of thing, that you would be liable for otherwise. And often make up a portion of the settlement that you need to come to with the IRS risk outside the bankruptcy court.
The other thing too is that it can result in a payment arrangement which is usually paid over five years and often times is, is going to be a lower payment than you would be able to work out with the IRS cause usually they require things to be paid off in two years or less. So taxes are something that can be addressed through bankruptcy. It’s not always the best option but it can be, it can be under certain circumstances so I definitely suggest people facing a tax liability, you might want to talk to a bankruptcy attorney as well.
Again, I’m with the Financial Law Group here in Warren, Michigan in Macomb County. The number is 586-693-2000 and my website is financiallawgroup.com
Posted by Michigan Bankruptcy Attorney - Michael GreinerJun 24, 2011