Boston Bankruptcy Lawyer Blog

As we enter the final weeks of the calendar year we post this blog article to inform Massachusetts consumers of a few things they can do to reduce taxes and keep their retirements accounts active. Our Massachusetts Financial Planning for 2011 blog article in our http://www.bostonbankruptcylawyerblog.com/ blog should be revisited.

Tax planning basically involves two things: deferring income and reducing taxable income. Deferring income may seem counter intuitive, but it can reduce your taxable income this year.

Defer income to 2012 if you can; any year-end bonus that you are entitled to could be requested or given in January. Thus, you will not be required to pay the tax until 2012.

Pay deductibles in 2011; these could include medical bills, interest payments, state and local taxes, including property taxes.

Tax rates are set to remain the same for 2012; there are six tax rates, 10%, 14%, 25%, 28% and 35%. Long term capital gains will be taxed at a maximum rate of $15% next year too, however, if you are in the 10% or 15% tax bracket, you will pay 9% on capital gains! Knowing all of this may help you in year end tax planning.

If you had to pay the alternative minimum tax (AMT) in 2010, beware of it for this year; if your income went up unexpectedly, look into this before year end. The AMT disallows various deductions, so check with your tax advisor or a computer tax program.

Massachusetts's small business owners should consider purchasing qualifying capital because in 2011 you can take advantage of the 1005 depreciation deduction. This goes down to 50% for 2012 acquired property. The maximum amount for 2011 is $500,000, however, in 2011, the maximum amount is $139,000.

Massachusetts home owners should consider making energy efficient home improvements because this deduction goes from 10% this year to 0 in 2012. Such improvements include certain roofs, windows, doors, insulation, energy efficient furnaces and hot water heaters,

2011 is the last year that folks over 70 to make a charitable contribution from your IRA or other deferred retirement account and not pay any tax on the distribution. This applies up to $100,000. This also counts towards your minimum required distribution for 2011.

Each year you must take at least a minimum IRA or 401k distribution for everyone that is over 70 ½. There is a steep penalty for those that fail to do so. Most plans administrators, such as Fidelity, Schwab, Vanguard or your employer, will complete the calculation for you.

Finally, what should our Boston bankruptcy and Massachusetts bankruptcy clients do with respect to their retirement accounts? Since most retirement accounts are bankruptcy protected in Massachusetts, they should consider contributing as much as possible. In 2011, the IRA contribution limits is $5,000, and $6,000 if you are over 50. This is the same for Roth IRA accounts. There are phase For our 401k clients, the limits are $16,500, and $22,000 if you are over 50. 403(b) and Section 457 participants have the same limits. This is different for "highly compensated employees."

For articles regarding Massachusetts motor vehicle accidents, Boston car accidents and motor vehicle injuries in Massachusetts, see our Massachusetts injury blog.

Massachusetts bankruptcy filings fell in October 2011, which was the fourth straight month that we saw a decline in bankruptcies throughout the country. It is not clear if this was because folks have better control of their credit or because the next big wave, with respect to foreclosures, has yet to hit. It is also possible that lenders are not lending as much so folks are not credit restricted. The American Bankruptcy Institute reports a 19.6% decrease in personal bankruptcy filings in October 2011, from the October 2010 filings. Further, total consumer debt fell in the past two years. We have reported the decrease in Massachusetts bankruptcies in numerous blog posts. The news continues to be good!

And October had 2% fewer personal bankruptcies than September this year. For the year, the Administrative Office of the U.S. Bankruptcy Courts reports that the number of business and personal bankruptcies are down approximately 8% over the past year. By the end of the third quarter, September 30, 2011, the number of personal bankruptcies was 1,417,326.

Bankruptcy filings for 2011 are as follows: 353,082 total in the first quarter, with 252,338, or 71% as Chapter 7 no asset personal bankruptcies; 367,487 total in the second quarter with 265,759 or 72.32% as Chapter 7 cases. These statistics are from the American Bankrutpcy Institute. It is interesting to note that the percentage of Chapter 7 filings, as compared to all non business filings, has fluctuated from a low of 60.86% in 2007 to what appears to be the new normal, of numbers in the nigh sixties and low seventies since that time.

On the other hand, home foreclosures have slowed to the point where it will take perhaps more than eight years to clear out the 2.1 million homeowners considered delinquent on their mortgages. While this may be slowing the filings now, it could have the effect of increasing bankruptcy filings soon, and in the future.

Personal bankruptcy has even factored into the current presidential race; noted attorney Gloria Allred recently represented Sahron Bilek who accused Republican a presidential candidate of sexual harassment. Ms. Bilek's personal bankruptcy filing was pointed out by the candidate as having a "long and troubled history, from the courts to personal finances." Regardless of the politics, and the unfortunate incident, with personal bankruptcies more prevalent they are affecting folks in ways other than credit scores. This is one way we do not normally anticipate that a bankruptcy will affect our clients.

Earlier this year in our blog, http://www.bostonbankruptcylawyerblog.com, we reported that 13% of all Americans have considered filing for personal bankruptcy. Nevertheless, our antidotal evidence is that personal bankruptcies in Massachusetts are down significantly. It seems that the wave hit hardest last year and this year folks are still hanging in there, negotiating their mortgages, perhaps not paying but not being foreclosed on either. We see more and more folks not paying their mortgages, but having some legal hook to keep them in their homes - a foreclosure gone bad by the bank, a lender that is not moving quickly, or the courts stopping a foreclosure for some reason.

The costs and attorney fees for filing for bankruptcy in Massachusetts has increased, of necessity, since the Bankruptcy Abuse and Protection Act of 2005. We try to be the Boston low cost bankruptcy lawyer because our clients demand top quality effective legal representation at a fair and reduced cost.

The cost for attorney fees can be found by simply calling us; we can generally undertake an intake and you can talk to a lawyer for a low bankruptcy fee quote during your phone call. Reduced fee Massachusetts bankruptcy lawyers are also a function of your income and assets, along with the difficulty of your case.

What are the new requirements in the BAPA? Why are attorney fees higher than they used to be? We will attempt to outline some of the requirements under the new law here.

First and foremost, bankruptcy attorneys must now verify all of the information our clients provide. Income? We need to review your tax returns and updated pay advices. Credit card debts? We need to review copies of the bills and your credit report. Secured debts? We need copies of your mortgages and car loans. Assets? We need to review the documents regarding your home, car, and your 401k plan.

Another significant new requirement for the bankruptcy attorney is to complete the Means Test. This can require substantial legal work, especially on some bankruptcy petitions. The Means Test requires that personal bankruptcy filers have family incomes below the "mean" of the people in their state. The mean numbers, for different sized families, changes every year or so, as a function of the state income numbers. The means test in Massachusetts numbers changed, in fact decreased, representing Massachusetts median income. However, if your family income is above the mean, your attorney needs to apply state maximum costs for various categories.

The new law also increases the number of years a consumer may file for Chapter 7 bankruptcy protection from six years to eight years. The reason for this is, of course, to protect creditors and prevent consumers from filing too often. Of course, this does not increase the fees.

Bankruptcy credit counseling is another part of the new BAPA law. This credit counseling class must be completed before a personal bankruptcy Petition can be filed with the Bankruptcy Court. The class, which takes one to two hours over the internet, enables you to evaluate your personal financial situation, review alternatives to filing a personal bankruptcy, and establishing a personal budget plan. The cost is $30 to $50 depending on the company. The companies that are certified by the Bankruptcy Court will forward the certificate to your attorney's fax or email immediately upon completing the class.

Bankruptcy financial management counseling is the change in the BAPA law that effects our clients last. The class must be taken within 45 days of the creditor's hearing. This requirement requires the debtor to take a class over the internet, or telephone, to learn the three fundamentals of financial management: the benefits of establishing short term and long term financial goals; teaching how to create a family budget; and, how to balance a checkbook and reconcile monthly bank statements. The goal is to teach financial management to avoid future bankruptcies.

Finally, there is an increased filing fee of $299. Most folks have to pay the fee. However, if your income and assets meet the requirements to waive the bankruptcy fee, we prepare and file the motion to waive the fee at no charge.

Personal bankruptcy costs more as a result of the new laws. We try to help all of our clients by keeping our Massachusetts personal bankruptcy fees as low as possible. We work with our bankruptcy clients, in every case, to keep the fees down as low as possible. Call us.