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Personal Injury Law Firm Burns & Jain Injury Blog

We have been practicing law in Boston and throughout Massachusetts since 1985. I have represented clients in District Courts, Superior Courts, the Appeals Court, Housing Court, Probate Courts, Federal Bankruptcy Court and the Federal District Court.

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CLARK ET UX. v. RAMEKER, TRUSTEE Landmark Supreme Court Case

Are IRS retirement accounts protected in bankruptcy? In a landmark ruling the Supreme Court said that IRAs that are inherited are absolutely “not retirement funds” and are therefore not exempt in personal bankruptcy. The Supreme Court reasoned this because: 1. The debtor likely never invested any monies in the account; 2. No matter what the age, holders of inherited IRAs must begin withdrawals immediately (unlike regular IRAs when the withdrawals can be delayed until age 70 and ½; 3. The holder of an inherited IRA can withdraw all of the monies, and pay the tax but no penalties, while the holder of a regular IRA would pay a penalty if withdrawing all of the monies prematurely.

When To Seek Bankruptcy Advice?

When is the right time to seek advice from a bankruptcy attorney? The answer is before you start making decisions that are beyond your usual comfort zone. Before you take monies out your 401k to pay your credit card bills. Before you borrow money from friends or family to pay a mortgage on a home that’s under water. Before you inherit moneys from family.

TelexFree, Brazilians and Bankruptcy

Many of our Brazilian clients have been stung by the actions of TelexFree, an “investment” firm that looks more like a Ponzi scheme. Shut down in Brazil last year, TelexFree has somehow been allowed to collect significant dollars in the United States, much of them from innocent Brazilians in Massachusetts who are simply trying to get ahead in a tough economy. Many may have to file for bankruptcy as they are out tens of thousands of dollars; monies they were counting on to pay their bills.

Can I Save on Legal Fees and File For Bankruptcy with a Paid Preparer?

Of course, however, why do this? A paid bankruptcy preparer has a very limited scope. A lawyer, on the other hand, will know if you need to file, will present you with various options, and knows where he or she doesn’t know the law so will protect you by researching what to do. A lawyer will charge a fair amount and is regulated by the state board of bar overseers. A lawyer will sign an affidavit on the Bankruptcy Petition and Schedules as to what he or she charged, and will inform you of any problems to anticipate.

Massachusetts Bankruptcy is Down and Medical Debt is One Reason

Will the new health care law, the Affordable Care Act (aka Obamacare) reduce bankruptcy? A recent study undertaken by the Chicago Federal Reserve bank showed that Massachusetts bankruptcies are down 20% because of the Massachusetts health care law (aka Romneycare). Apparently, the US is unique in the developed world in that medical billing is a leading cause of bankruptcy filing. It is not clear that this was ever true in Massachusetts, however. Nevertheless, the fact that bankruptcies are down, is good!

Prepaid Debit Cards and Personal Bankruptcy

Many bankruptcy clients have prepaid debit cards to list among their assets. This is not usually a problem as the balance can be exempt from the Trustee. How does this work? In a Chapter 7 personal bankruptcy, you are entitled to certain exemptions: your home, your car, and your personal items, are all exempt up to a certain amount. Your prepaid debit cards are simply one more asset that needs to be evaluated before filing for a fresh start in bankruptcy.

Lawyers in Bankruptcy

Clients often present to us ashamed that they are in financial dire straits. They are embarrassed. Usually their situation is not unusual, and not their fault. We haven’t had any clients, in the past 28 years anyway, that have just finished an around the world trip and now need to file bankruptcy. Generally, folks were working and they lost their job, or a family member became ill, resulting in the need to file for bankruptcy protections. Of course, for several years beginning around 2008, the housing crisis caused many of the bankruptcies we filed.

Mortgage Servicing and Consumer Bankruptcy

The Consumer Financial Protection Bureau (CFPB), the brainchild of Massachusetts Senator Elizabeth Warren, is working on making mortgages for homeowners more transparent. Following the financial crisis of 2008, the CFPB was established. Notwithstanding lots of opposition by the large banks, the CFPB is working to institute rules and regulations to help consumers.

Notes for Consumers Regarding Retirement

With 2013 tax filing just around the bend, we are writing to remind clients to keep retirement planning at the forefront of their tax planning agenda. First, be sure to max out any and all retirement accounts you can for 2013. Clients should be aware that many companies match 401k contributions; that they may also be eligible for Roth IRA contributions; and that there are various penalties for withdrawing funds from these accounts. Furthermore, if you are over 50, you may be entitled to increased savings thresholds.

Can I Keep My Retirement Account Monies Even in a Divorce?

In a Chapter 7 personal bankruptcy, retirement monies are generally exempt. So long as they are in a qualified account, and are under 1,245,475, that is. Almost all of our clients can keep their retirement monies.