Federal Property Exemptions Bankruptcy

When a debtor declares bankruptcy they are allowed to keep exempt assets.  With chapter 7 bankruptcy, assets which are not considered exempt are liquidated and distributed to creditors.  Each state has a list of exemptions and there is also a separate federal list of exemptions.  As a debtor filing for bankruptcy, you may choose either your state exemptions or the federal exceptions, but not both.

In this post, I will discuss only federal exemptions. 

1.) Home
The debtor's home equity is protected up to $21,625.

2.) Car
A car is exempt if the owner's interest is less than 3,450.

3.) Personal Property
Personal property includes household goods, electronics, clothing, a watch and furniture.  These items are protected if the total value is less than $11,525 with no single item worth more than $550.

4.) Jewelry
Jewelry is exempt as long as its value is under $1,450

5.) Wild Card
The wild card exemption may be used to protect any property valued up to  $10,825

6.) Tools of Trade
Tools of trade include professional books, office furniture and tools.  These items are protected up to 2,175.

7.) Insurance Benefits
Insurance benefits, from the death of a spouse or parent are exempt up to the amount necessary to support the debtor and the debtor's dependents.

8.) Doctor Prescribed Health Aids
If a debtor is prescribed equipment or other items to aid in their health those items are exempt.

9.) Earnings
Post petition earnings are protected in insolvency chapter 7 bankruptcy, but not chapter 13 which requires a payment plan.

10.) Certain Government Assistance
Income from Social Security, Unemployment, or local public assistance programs is completely exempt.

11.) Veteran Benefits
Veteran Benefits are entirely exempt.

12.) Disability Benefits
Disability, Illness benefits are exempt.

13.) Alimony, Support or Maintenance
Alimony, Support and Maintenance that is reasonably necessary for support is exempt.

14.) Employee Benefits
Stock Bonus Pensions, and profit sharing plans through the debtor's employer are exempt.

15.) Award under Crime Victim Reparation Law
These type of awards are entirely exempt.

16.) Payment from a Wrongful Death Lawsuit/ Settlement
These type of payments are exempt to the extent reasonably necessary to provide for the debtor.

17.) Payment on a Personal Injury Lawsuit
These type of payments are exempt up to $21,625.

If you are considering bankruptcy as an option speak to an attorney who has your best interest in mind.  The Law Office of Stacey Keenan is located in Woodbury, MN.  We serve the seven county metro area and if you are accoss town, we can meet you halfway.  Call today to discuss whether bankrupcty is right for you.  612.227.8709.

Protection from Creditors

If you owe money and your creditors are attempting to collect from you, it is important to know about protections (exemptions) from garnishment.  Garnishment is a legal process used by creditors to take money from your paycheck or out of your bank account.

The good news is that some or all of your money may be protected from garnishment.

You are protected if you have received government aid, based on need, within the last six months.  Types of government aid include Medical Assistance, Minnesota Supplemental Aid, Food Assistance and Social Security Income.  (This is not a complete list.)

Debtors who earn less than the federal minimum wage at 40 hours a week are protected from wage garnishment.

Debtors who do not receive government benefits and earn more than minimum wage are protected as well.  Creditors may only garnish 25% of the income earned by these debtors.

The debtor (individual owing money) must claim these exemptions by notifying the creditor in writing.  A letter to the creditor should include proof of participation in a government aid program.  If these exemptions are not claimed the creditor has every right to attempt to collect from the debtor.  

Not all debts are protected from garnishment.  Entities that may garnish your wages or place a levy on your bank account even when you are protected, include but are not limited to, the Internal Revenue Service, Minnesota State, Student Loan Organizations, City Governments and the Child Support Magistrate.

Also, secured debts including car loans and mortgages do not fall within these exemptions.

Blog post provided by Stacey Keenan, an attorney in Woodbury, MN who practices in the are of consumer law.  www.keenanlegalmn.com

Contemplating Divorce? Here are some things to consider.

When you’re just considering divorce:  These are things you can do to be more prepared in case you choose to divorce at some point in the future.  While there are non-divorce related reasons for most of these actions—many married couples have checking and credit accounts in their own names and it’s good to have a detailed record of your valuables for insurance and estate planning purposes—they can still tip off a suspicious spouse that you are considering divorce.  You will need to weigh your need to feel prepared with the possibility that you may tip your hand before you’re ready.  It’s an individual decision that only you can make.

£  Checking Account.  Open a checking account in your name.  If your spouse is aware that you are considering divorce, try to agree with your spouse how you will split the cash in your joint accounts.  If you are still living together, you will need to determine how you will divide household expenses. 

o   If you are worried that your spouse will withdraw/spend all the money in your joint accounts, take half of the balance and put it in a separate account.  The intent is not to hide it or spend it all, but just to make sure it is available later. 

£  Credit Card.  Open a credit card in only your name.   If your spouse is aware that you are considering divorce or if you’re afraid your spouse will max out the cards out of spite, consider closing or freezing joint accounts and working to pay them off with your joint funds or transferring balances to cards that you each hold in your own names. 

£  Cash.  Set aside enough cash to cover two weeks’ worth of expenses.  The intent is not to hide this money, but to have enough to live on should your accounts be frozen.

£  Credit Report.  You should order a free credit report every six months or so to ensure that your spouse hasn’t applied for any more joint credit cards or loans.

£  Safe Deposit Box.  If you have a joint safe-deposit box, make a list of its contents and ask the bank to require both signatures to open the box.

£  PO Box.  Consider opening a PO Box in your name to ensure your spouse cannot access your mail.

£  List of Valuables.  Make a list of the valuable household belongings (jewelry, electronics, vehicles, antiques, other items worth more than $500) including a description, photograph, serial numbers, and copies of title and registration when appropriate. 

£  Passwords.  Change the passwords for your ATM, online bank accounts, email and any other online accounts that your spouse may be able to access.

Once your spouse is aware that you are seriously considering divorce or papers have been served.

£  Complete all the items under “Considering Divorce”

£  Freeze Joint Investments.  As soon as you begin divorce proceedings, freeze all joint investments accounts so that nothing can be withdrawn or loans taken out against them. 

£  Retirement Account.  If your spouse has a retirement account in his/her name, request a copy of the current account statement and documentation on how the plan works.

£  Car Insurance.  Switch your car insurance from a joint policy to a single policy to ensure your rates won’t go up as a result of your spouse’s accidents or tickets.  If you only have one car or if you’re not sure who will end up with each car, you may need to continue the joint insurance until ownership is determined by the court.

£  Life Insurance Beneficiary.  Change the beneficiary on your life insurance policy and any retirement accounts.

£  Powers of Attorney.  Cancel or destroy any powers of attorney that you may have executed which would give your spouse authority over your affairs.

£  Health Care Directive.  Amend your health care directive to remove your spouse or in-laws as agents who would be able to make your health care decisions should you become incapacitated.

£  Keys.  Ask your spouse to return his/her set of keys to your vehicle as well as any keys your spouse may have for your parent’s home or other relatives. 

£  Bills.  If you move out of the house, be sure to have your name removed from any household bills. 

£  Home Security.  Once your spouse has moved out of the home, change the locks, the password to the home security system, the code to the garage door, the code to the voicemail mailbox, the code to the home safe, and hide your spare keys in a different place.

A few things not to do:

£  Home Owners/Renters Insurance.  Even if you move out of the home, be sure to keep your name on any home owners or rental insurance policy to protect your share of the home and/or your belongings that are still in the home.

£  Will.  Do not change your will until after the divorce is final, but get a copy of your current will and start thinking about how you want to change your estate plan.  Make an appointment with an attorney soon after your divorce is final.

£  Utilities.  Do not turn off utilities if your spouse is still living in the house.

Amanda Swanberg of Swanberg Law Offices is a co-founder of SlidingFeeAttorneys.com.  Amanda practices in the areas of Family Law and Mediation and is happy to offer you a free consulatation.  Please call 612-670-9626.

Pulled over by the police… now what?

For a lot of people being pulled over is a stressful event.  This is the case even if the person doesn’t have anything to hide.  For others, being pulled over is a matter of routine and more of a hassle than anything else.  Below are a few pointers on how to handle yourself should you be asked for your license and registration:

1.     When you see the flashing lights or hear the siren behind you, pull over as quickly and safely as possible.  Always use your traffic signals. 

It is important to pull over as quickly as possible because if the officer thinks you are fleeing or avoiding the stop, you will be charged with a felony automatically when the officer catches up with you.  Minnesota law does not distinguish between fleeing for 5 blocks versus several miles - they are both felonies. 

2.     Keep your seatbelt on and buckled.  Make sure your hands are on the steering wheel as the officer approaches. 

This advice applies to any passengers in your vehicle as well.  Officers get very nervous if you are fidgeting or hiding your hands.  Recent violence against police officers has given them reason to be extra cautious when approaching your vehicle.  By keeping your hands visible you will put the officer more at ease, which will make the entire exchange more pleasant for both of you.  It is important to keep your seatbelt on simply to avoid getting a ticket for not wearing one.  The current cost of seatbelt violations is $130. 

3.     Always be polite.  Do not use profanity or rude gestures.

You can expect that if you have an attitude towards another person, especially an officer, they will have no reason to be respectful towards you and will not cut you a break.

4.     You are required to tell the officer your name and other identifying information. 

You DO NOT have to answer any other questions.  DO NOT offer information, let the officer speak first.  “Minnesota Nice” may compel you to want to answer when an officer asks you if you know why you were pulled over or if you have had anything to drink, fight the urge to answer.  If the officer is asking you if you know why you were pulled over, or how fast you were going, it is prudent to either say nothing, or to ask the officer to tell you why. 

5.     Do not exit your vehicle unless you are asked to do so.

This follows along the lines of fidgeting and hiding your hands.  If you make unexpected movements or try to approach the officer you will not be doing yourself any favors.  In addition to making the officer nervous or angry, you may be charged with obstructing the legal process for not listening to the directions and interfering with the officer’s ability to clear the traffic stop.  Of course, the validity of any potential charges or tickets would need to be evaluated by a lawyer or a court. 

If you are asked to exit your vehicle, comply with the request, but make sure to close your car door behind you after you exit.

6.     You do not have to consent to a search of your vehicle. 

During a routine traffic stop there is no reason for an officer to need to look in your trunk.  If you are asked if the officer can search your car – you DO NOT have to allow them.  If the officer has a valid reason, they will obtain a warrant to search the car. 

*Information in this blog is not intended to be used in place of legal advice specific to your case from an attorney.  Contact Jennifer Congdon today to discuss your case.  651-705-6311*  http://www.congdon-law.com/ 

Wills, they aren't just for old people anymore!

Wills are like losing weight.  We know it’s something we should do, but dang it's sure hard to get started!  I’m right there with ya.  I have a confession to make.  I don’t have a will. *gasp*  You’d be surprised how many lawyers don’t have wills.  The professor who taught my wills class also didn’t have a will—even though she is a lesbian in a committed relationship with children!

To be fair, it’s not only the effort of making a will that keeps us on the couch.  What keeps me from writing my will is having to imagine a situation where I won’t be around to watch my daughter grow up.    Despite my knowledge to the contrary, it feels  as though simply contemplating the possibility of my untimely death is enough to make it more likely.  I felt the same way before I purchased life insurance.   Based on that experience, I can tell you that I felt a tremendous sense of relief knowing my daughter would be provided for if I were to die unexpectedly.

When you’re young, single, and childless you may be comfortable allowing the state’s intestate statute govern your estate distribution.  Once you have children, you may not be comfortable leaving their future up to chance.  Who would you want to raise your children if you and your spouse/co-parent die?  How would you want to provide for your children’s care and support?  Who do you want responsible for managing their finances until they are adults? 

It can feel overwhelming to address all of these estate planning concerns at once.  Breaking the process into smaller chunks makes it manageable.  

Over the next few weeks, I will be posting some exercises to help you gather the information and reflect on the important choices you will need to make when writing a will.  The initial posts will focus on the needs of families with young children and later posts will be useful to people in any stage of life.  Please feel free to contact me if you would like to see other topics covered and I will do my best to accommodate your request. 

Let's commit to giving ourselves and our children the peace of mind of having an emergency back-up plan in place by the end of 2011.  Consider it the Year of The Will.  As a bonus, you can do most of the work while in your PJs laying on the couch.  That's an offer Lifetime Fitness just can't beat!

Amanda Swanberg is a St. Paul practicing in the areas of Family Law, Mediation and Wills and Trusts.  http://www.swanberglawoffices.com/

Why it's important to hire an attorney

"A person who represents himself at trial, has a fool for a client."

Maybe you came to this site because you are in a legal pickle.  Maybe you came to this site because you have made a big change in your life (i.e. you've had a child and need a will) or maybe you want to make a big change in your life (i.e. start your own business).  Right now you may be debating whether an attorney is really needed. I am here to tell you that the answer is almost always YES!  Even I, a practicing attorney, consult with and hire an attorney when I or someone in my family has a legal question or a potential legal issue.  I know that hiring an attorney can be expensive and sometimes it feels like all an attorney does is push paper around.  You can fill out paperwork, right? Yes you most certainly can, but when you hire an attorney you probably are not aware that much more goes into legal representation than just filling out the paperwork.  One of the most importance reasons to hire an attorney is that attorneys are able to "issue spot" something very difficult for a lay person or for a person that is emotionally vested in the case.

Attorney Are Trained Issue-Spotters
Attorneys are trained to spot and avoid legal issues to ensure that you avoid pitfalls or traps that could cost you much more in the long run.  People are often surprised that in law school, law students rarely learn particulars about the law.  Instead, the majority of our time in law school is spent on "issue spotting." When I refer to issue spotting I am talking about the detection of potential legal consequences derived from a specific set of facts.

A person that is representing himself in any dispute has much more to consider than just the law that governs the issue. An attorney considers may factors when determining the best course of action for a client:

• rules of civil procedure (how to file, where to file, what court has jurisdiction)
• rules of evidence (will important evidence be excluded?) 
• financial considerations (is it worth it to sue if the defendant has no assets, what form would be the best to set up my business a corporation or partnership)
• ethical considerations
• long-term goal considerations

Attorneys are trained to analyze these and many more factors to counsel you on the best course of action for your legal issue.  You may not understand that a particular course of action may have unintended consequences that you would not be aware of unless you had knowledge about the law.  For example, pleading guilty to a crime could have future consequences that you never even contemplated when you plead guilty - driver's license revocation, potential vehicle forfeiture, a criminal record making it difficult to find employment.  In every area of law, there are consequences that occur for each course of action you take - talk with an attorney to ensure that you know what those consequences are.  You would not take a prescription pill without knowing the potential side affects, do not represent yourself without knowing the potential consequences.

Attorneys Are Not Emotionally Vested In the Outcome.

If you are emotionally vested in the outcome you will not do yourself any favor by representing yourself.  The courtroom is not a place to vent your emotions but rather a place to resolve disputes in a more business like manner. Yes, emotions are a part of many cases but it is not a major part of the case.  It is often difficult for individuals that are involved in a case to separate their hurt feelings from  the facts that are relevant to the law.   I have been involved in cases where the opposing party is representing themselves.  More often than not, the opposing party believes that certain aspects of the case are really important and they focus on those points instead of what matters under the law.  By doing this their case is most certainty lost. Judges are humans and have a limited amount of time, patience, and a limited attention span.  To make a decision a judge will look at what relevant evidence each party presented.  If one party has not provided sufficient evidence that is relevant to the case then that party will lose their case.

When you are emotionally invested in the case it is difficult for you to get a good assessment of whether you should settle or try to resolve the case out of court.  You may think you have a great case but aren't you biased?  You have to remember that you have to be able to prove your case to a jury of your peers who are strangers to the parties and witnesses involved in your case.  Your strong feelings, perspectives, and the dynamics that the case presents are difficult to convey to the jury - whom have never met you, do not understand the background or history of the case, and do not have emotional involvement in the case.  This is why an attorney is necessary - a good attorney can weigh the positive and negative facts of case in a neutral manner and create a course of action to resolve the issue in the most appropriate and cost-effective way.

Legal Representation does not have to Break the Bank.
If cost is the deciding factor in whether you hire an attorney you may want to visit SlidingFeeAttorneys.com. SlidingFeeAttorneys.com is a network of cost-conscious, local attorneys prepared to assist you. You no longer have to represent yourself because you cannot afford to pay high attorney rates.  Our fees are reasonable and based on your income and life circumstances.

Kristen Bullock is a practicing attorney and a founding member of SlidingFeeAttorneys.com.  Ms. Bullock is a first generation attorney who grew up in a working class household and understands the unique challenges that a person of modest means faces when they have an unexpected legal issue.  She founded SlidingFeeAttorneys.com to  provide legal representation to hard-working citizens who make too much to qualify for legal aid but also can't afford to pay  for  high-priced attorneys.  http://www.bullocklawoffice.net/