BANKRUPTCY ABUSE
PREVENTION
AND CONSUMER PROTECTION ACT OF 2005
The Bankruptcy Abuse
Prevention and Consumer Protection Act of
2005 makes it more difficult to get rid of
debts by filing for bankruptcy, forcing tens
of thousands of people to work out repayment
plans instead. President Bush signed the
bill on April 20, 2005.
The bill which marks
the first major change to the bankruptcy
code in 27 years and makes sweeping
new changes which
take effect on October 17, 2005.
Some of the major
changes include:
Income means test.
In order to file for Chapter 7 protection, a
debtor must now pass a rigorous income means
test or be faced with a Chapter 13
bankruptcy and a 5 year repayment plan. If
your family earns over the median income,
you must file Chapter 13, you are not
eligible to file Chapter 7. For those close
to the median, you may not qualify to file a
Chapter 7 and you may have too little income
to file a Chapter 13
The median incomes
for Wisconsin are:
Single $ 35,885
Two People $ 46,927
Three People $ 57,968
Four People $ 69,010
Five People $ 80,052
Credit counseling.
Credit counseling is now required in order
to file for bankruptcy. The counseling
outlines the opportunities for available
credit counseling and assists with budget
analysis. This "briefing" must be completed
during the 180-day period preceding the date
of filing the bankruptcy petition.
Tax Return
Disclosure.
Each debtor, at least seven days prior to
the Court hearing, must file a copy of their
latest federal income tax return or
transcript of the return. A copy of the
return is available to any of the debtor's
creditors upon request.
Documentation.
In order to file all information must be
verifiable. The following documents will be
needed for filing:
€ three years of tax
returns,
€ at least one year of bank statements,
credit card statements, loan statements;
€ at least 6 months of pay stubs (for all
employers);
€ an appraisal on your home and vehicles;
€ a comprehensive list of personal property
- furnishings;
€ a year of utility bills;
Household Goods.
The new code
imposes strict requirements are what
household goods a debtor will be allowed to
keep. The debtor will be allowed to have no
more than one tv, vcr and stereo. No more
than one computer and no collectibles. No
riding lawn mower, no pools for the kids,
hot tubs bought with the house. No ATV,
scooters, adult ski equipment, adult
bicycles or guns.
The new law places
strict requirements upon attorneys, who must
now:
(1) certify the
accuracy of the debtor's schedules of
assets, under penalty of harsh court
sanctions;
(2) certify the ability of the debtor to
make future payments under reaffirmation
agreements; and
(3) identify and advertise themselves as
"debt relief agencies" subject to a host of
new regulations.
Consumer groups and
unions have strongly opposed the bankruptcy
reform legislation in large part because
they argue that the means test arbitrarily
and unfairly denies the benefits of
bankruptcy to many people who need them.
If you would like more information on any topics which concern a legal
matter, please contact Rob Wertheimer for a free
initial consultation at 715-381-1273 or
click here
****
Return to top
of page
BANKRUPTCY
(Law in effect until October 17, 2005)
Bankruptcy is a legal
way to get out of paying certain debts.
Those debts are eliminated by a bankruptcy
court "discharging" them. A discharge of a
debt in bankruptcy means that whomever you
owe the debt to can no longer legally
require you to pay it. The purpose of
bankruptcy is so society can allow people to
have a fresh start when they become heavily
burdened by debt.
There are several
types of bankruptcy. Bankruptcy is all a
matter of Federal Law and is done in the
federal courts according to laws passed by
Congress. The most common form of bankruptcy
is known as Chapter 7 bankruptcy. This is
the form of bankruptcy which most people
use. In Chapter 7, the bankruptcy court
discharges your debts while it also takes
certain property that you have, sells it and
distributes the money among your creditors.
Chapter 13 bankruptcy allows people to keep
their property and the bankruptcy court
supervises their paying off some parts of
their debts during a 3-5 year period.
Chapter 11 bankruptcy is essentially for a
business. It lets the business operate while
the court supervises payment of some parts
of the business debts. Chapter 12 bankruptcy
is for farmers.
There are also some
debts which cannot be discharged in
bankruptcy. Non-dischargeable debts include:
child and spousal support debts; court
judgments against you or settlements entered
into by you for personal injuries or death
due to driving while intoxicated; student
loans which became due less than 7 years
ago; taxes which became due less than 3
years ago; restitution ordered by a court;
condominium dues or dues from a cooperative;
debts which were incurred through fraud; and
punitive damages from willful harm to
another person.
A debtor is allowed
to keep certain property in a bankruptcy.
This property is known as "exempt property."
The exemptions are for certain assets listed
in the law, but only up to a maximum value.
In Wisconsin, you are allowed to have $1200
in a motor vehicle, $40,000 in homestead
equity in your house, $5,000 in household
goods and personal effects, life insurance,
pensions, tools of one's trade, and
government assistance in the form of social
security payments, unemployment compensation
, etc. which you have saved in a bank
account..
Immediately upon
filing of a bankruptcy and notification of
creditors, an "automatic stay" of all
creditors' actions against you goes into
effect. This means that all collection
actions, lawsuits, foreclosures, evictions,
etc. are immediately halted by order of the
Bankruptcy Court. The court then schedules
the meeting with creditors and you must
attend this meeting (in this area of
Wisconsin the meeting is held in Eau
Claire). At the meeting, creditors present
their claims and the court deals with
property which is non-exempt.
You can file for
Chapter 7 bankruptcy again 6 years after the
date of your discharge in bankruptcy. Since
you can get a discharge once every 6 years,
it is very important that you not do it
frivolously or for just a few minor debts.
Recently, Congress
has been considering the first major
revision in 20 years to the Bankruptcy Code.
The changes would include a "means" test, so
that if a debtor had a certain income, a
portion of the debts would have to be repaid
before a discharge would be allowed. The
Senate and the House are working to
consolidate their separate bills and it is
likely that the new Bankruptcy Law will go
into effect in the next year.
If you would like more information on any topics which concern a legal
matter, please contact Rob Wertheimer for a free
initial consultation at 715-381-1273 or
click here
****
Return to top
of page
DIVORCE IN WISCONSIN
" ... And we drove
that car as far as we could, abandoned it
out west, split up on a dark sad night both
agreeing it was best, she turned around to
look at me as I was walking away, I heard
her say over my shoulder, we'll meet again
someday on the avenue." from the song
"Tangled Up In Blue" by Bob Dylan.
In order to file for
divorce in Wisconsin, one party must reside
in the county in which the action is being
filed for thirty days and reside in
Wisconsin for at least six months. The
process of filing for divorce is begun by
the filing of a summons and petition for
divorce with the clerk of Circuit Court in
the county of residence. After the petition
and summons are filed, it must then be
served on the other spouse. This puts the
other spouse on notice that a divorce action
has been commenced. Because the Wisconsin
Statutes require a four month waiting period
before a divorce can be finalized, the
divorce process can take anywhere from four
months to over a year if it is contested.
If the parties can
come to an agreement over the terms of their
divorce, it is possible to have an
uncontested divorce. In a stipulated or
uncontested divorce the parties or the
parties' attorneys draft a marital
settlement agreement. This agreement states
how the parties' debts and assets are to be
split up, disposition of the parties'
residence, whether there will be maintenance
(formerly known as alimony) and other
important concerns of the parties that
should be stipulated to in writing. If the
parties have minor children, the agreement
would also specify how legal custody,
physical placement and child support for the
children are to be allocated.
The Wisconsin
legislature has recently redefined the
concepts of custody and visitation. Legal
custody is "the right and responsibility to
make major decisions concerning the child."
Major decisions include, among other things,
consent to marry, enter military service,
obtain a motor vehicle operator's license,
and choice of school and religion. If the
parties are awarded joint legal custody,
then both parents share legal custody and
neither party's legal custody rights are
superior unless specified in decisions by
the court or the parties.
Physical placement
has replaced the concept of visitation and
is defined as "the right of a party to have
a child physically placed with the party and
the right and responsibility to make routine
daily decisions regarding the child's care
during that placement." These routine
decisions may not be inconsistent with any
major decisions made by the party with legal
custody.
Under the statutes,
the court is to allocate periods of physical
placement with both parents unless the court
finds, after a hearing, that physical
placement with a parent would endanger the
child's physical, mental, or emotional
health. In addition, the court may specify
one parent as primary caretaker and one home
as the child's primary home for purposes of
determining eligibility for aid or other
purposes.
Child support is
determined by a percentage standard which is
established by the Department of Health and
Social Services. The percentage standard is
based on the payer's gross income with
certain adjustments. Currently, the standard
is 17% for one child, 25% for two children,
29% for three children, 31% for four
children and 34% for five or more children.
The court may require either or both spouses
to pay support, must specifically assign
responsibility for health care expenses, and
is allowed to express support as either a
fixed sum or as a percentage of parental
income.
After a divorce is
granted in Wisconsin, the parties are
required to wait six months before
remarrying. In addition, if both parties
agree, a divorce judgment may be revoked by
the court if the parties apply to the court
within six months of the granting of their
divorce.
If you would like more information on any topics which concern a legal
matter, please contact Rob Wertheimer for a free
initial consultation at 715-381-1273 or
click here
****
Return to top
of page
LANDLORD TENANT LAW IN WISCONSIN
A frequent problem
which arises in Landlord/Tenant matters in
Wisconsin involves the return of security
deposits. Under the Administrative Code, a
landlord is required, within 21 days after
the surrender of the premises, to return all
security deposits, less any amounts withheld
by the landlord. The deposits are to be
returned in person or by mail to the last
known address of the tenant. If a tenant has
not left a forwarding address the landlord
may mail the deposit to the last known
address even if it is the rental property at
issue.
If the landlord
withholds any portion of a security deposit,
the landlord must, within the 21 day time
limit, deliver or mail to the tenant a
written statement accounting for all amounts
withheld. The statement must itemize in
detail each item of physical damage or other
claim against the deposit and the amount
withheld for each item or claim.
Security deposits may
be withheld only for tenant damage, waste or
neglect of the premises or for the
nonpayment of rent, utilities, and/or mobile
home parking fees. A landlord is not allowed
to withhold amounts for normal wear and tear
or other damages or losses for which the
tenant is not otherwise responsible for
under applicable law.
If a landlord does
not return the deposit within the 21 day
time limit, withholds all or part of the
deposit without providing a detailed and
itemized statement within the 21 days, or
withholds all or part of the deposit for
unauthorized items, a tenant may then sue
the landlord in Small Claims Court for
double damages and actual attorney fees (if
an attorney is used).
A tenant who holds
possession of the premises, does not have a
rental agreement and pays rent on a monthly
basis is considered a month-to-month tenant.
Such a tenancy can be terminated by either
the landlord or the tenant giving the other
written notice to terminate the tenancy. The
notice must be given at least 28 days in
advance. It must be received on or before
the normal due date for rent. For example,
if rent is due on the September 1st and the
tenant mails a Notice to Terminate Tenancy
which the Landlord receives August 31, then
the tenancy would end at the end of
September. If the Landlord does not receive
the notice until September 7th then the
notice would not go into effect until
October 1st and the tenancy would end at the
end of October.
The Notice to
Terminate Tenancy must be in writing and
substantially inform the other party of the
intent to terminate the tenancy and the date
of termination. A notice is not invalid
because of errors which do not mislead. The
notice may be either served personally or by
certified or registered mail.
If a tenant, whether
there is a written rental agreement or not,
fails to pay rent when due, the landlord may
give the tenant a 5 day quit or pay notice.
This notice gives the tenant the option to
pay all past due rents within 5 days and
remain in the tenancy. If the tenant does
not pay then the tenancy is terminated after
the 5 days.
If you would like more information on any topics which concern a legal
matter, please contact Rob Wertheimer for a free
initial consultation at 715-381-1273 or
click here
****
Return to top
of page
SOCIAL SECURITY DISABILITY
The Social Security
Disability (SSD)program is administered by
the federal government and provides benefits
to people who are disabled due to a physical
or mental condition. This program does not
provide benefits to those who have a partial
or short-term disability. Rather, the
program administers benefits to those who
are unable to do any work for which they are
suited and the disability is expected to
last for at least one year or result in
death.
You may become
eligible for SSD at any age. To qualify, you
must have 1) the required number of work
credits; and 2) a disability as defined by
the Social Security Administration.
If you qualify for
SSD, other members of your family may also
qualify for benefits on your earnings
record. The include: your unmarried child
and in some cases a stepchild or grandchild;
The child must be under the age of 18 or
under the age of 19 if in high school full
time; your unmarried child age 18 or older,
or if he or she has a disability that
started before age 22; your spouse who is
age 62 or older, or any age if he or she is
caring for a child of your who is under age
16 or disabled and also receiving checks; If
you die, your disabled widow or widower age
50 or older. The disability must have
started before your death or within 7 years
after your death.
The Social Security
Administration keeps track of your work
history. Credits are given each year for
work performed and reported to Social
Security. You will most likely qualify if
you have worked 5 of the last ten years.
However, you should go to your local Social
Security Office and they will provide you
with information regarding your work credits
and monthly benefit amount.
The Social Security
Administration uses a formula to determine
if an individual is disabled. The formula is
based on your work history, the severity of
your medical condition, whether your
condition is found on the Government's List
of Disabling Impairments, whether you are
able to do the work you have done in the
past 15 years, and whether you can do any
other type of work.
Do not be surprised
if your claim is denied. Sixty percent (60%)
of all claims are denied after an initial
review. You should therefore appeal this
decision. There are four stages of an
appeal: Reconsideration, Administrative Law
Judge Hearing, Appeals Council Review and
Federal Court Appeal. It is recommended that
you have an advocate to act on your behalf
during the appeals process. A lawyer will
represent claimants to assist them through
the application and appeals process.
If your claim is
approved, you will receive payment based
upon a lifetime average of earnings. This
amount may be lessened by workers
compensation or other benefits being paid to
you. The total amount of all benefits being
paid cannot exceed 80% of your former
average earnings. It is important to note
that Social Security Benefits may be taxed
if your income is high enough.
If you would like more information on any topics which concern a legal
matter, please contact Rob Wertheimer for a free
initial consultation at 715-381-1273 or
click here
****
Return to top
of page
WILLS
"Our own death is
indeed unimaginable, and whenever we make
the attempt to imagine it we can perceive
that we really survive as spectators. Hence
... at bottom no one believes in his own
death, or to put the same thing in another
way, in the unconscious every one of us is
convinced of his own immortality" (Sigmund
Freud, OurAttitude Towards Death, 1925).
Death, as Freud
observed, is a hard subject for us to cope
with and the notion of our own death is even
more difficult for us. One of the hardest
and most important "legal" events of our
lives is the decision to make a will. It is
a time when we must come to grips with our
own mortality and plan for the future of our
loved ones.
A will is a legal
document in which a person declares to whom
his/her possessions are to go after his/her
death. It may also serve to provide for a
guardian of minor children in the event that
both parents die. In addition, a well
drafted will can help save money in estate
taxes. In order for a will to be valid under
Wisconsin law, you must be of sound mind and
at least eighteen years old when making a
will. It must be in writing, it must be
signed by the testator (the person making
the will), and it must be signed by two or
more witnesses in the presence of the
testator and in the presence of each other.
It is also important that the witnesses to
the will should not be persons who will be
beneficiaries under the will.
There is no
requirement under the law that you have a
will. Without a will, the rules under
Chapter 852 of the Wisconsin Statutes govern
the distribution of your property and
possessions (see below). A will is important
if you want to leave property, etc. to
persons other than your spouse or immediate
family. It also is necessary to provide for
a guardian for any minor children you may
have. Otherwise, the court and not you, will
decide who will be the guardian of your
children if the "unimaginable" were to
occur. A will may also provide for the
creation of a trust, under which certain
property is held by a trustee for the
benefit of someone else (usually a minor
child or a spouse). The trustee is
responsible for protecting the trust assets
and paying out income from the trust to the
beneficiaries. The trustee must also
terminate the trust as the will provides.
In preparing to make
a will, careful thought should be given as
to who will be your personal representative
(the person who will be in charge of
administrating your estate), your trustee
(either a bank or someone who will be good
at managing the trust funds) and the
guardian for your children. Alternative
persons should be chosen in the event that
someone is unable to serve. Once the will is
drafted, it should be kept in a safe place
and your personal representative should know
where it is stored.
If the "unimaginable"
happens and you are without a will, Chapter
852 of the Wisconsin Statutes governs the
distribution of your estate. If your spouse
survives you, she will receive the entire
estate unless there are surviving children
of yours who are not children of your
surviving spouse. In that case your spouse
will receive one half of the net estate (not
including property the surviving spouse may
be entitled to under the Marital Property
Law) and the children will receive that
share of the estate which does not go to the
surviving spouse. If there is no surviving
spouse then the children will receive the
entire estate. If there is no surviving
spouse or children (or grandchildren or
great grandchildren) then the estate goes to
your parents. If there is no surviving
spouse, children (or their lineal
descendants), or parent then the estate goes
to your brothers and/or sisters and if you
have no surviving brother and sister then
the estate goes to the children of your
brother or sister. If there is no surviving
spouse, children, parent, brother or sister
or children of your brother and sister then
it goes to your grandparents. If there are
no surviving grandparents then your estate
would go to your next of kin. If there are
no heirs at all, then your net estate would
go to the State of Wisconsin, to be added to
the capital of the school fund.
If you would like more information on any topics which concern a legal
matter, please contact Rob Wertheimer for a free
initial consultation at 715-381-1273 or
click here
****
Return to top
of page
|
Bankruptcy
..... Legal Matter continued below