Consumer Bankruptcy Proceedings
CHAPTER 7 (Liquidation)
The first question many people ask is, "Is bankruptcy still a viable option since the Bankruptcy Abuse Prevention Act was put into place in October 2005?" The answer is, surprisingly, yes. With the passage of the new legislation, certain new hurdles and procedures have been put into place. In some instances, certain higher wage earners may now not be eligible. We'll advise you if bankruptcy relief is right for you you. And if not, what your other options are.
Chapter 7 is what most people think of when considering bankruptcy. Bankruptcy is a painless, streamlined process for obtaining a fresh start. In theory, your assets must be sold to satisfy creditors. However, much of the property you now own is probably exempt and is not subject to claims of creditors. Regardless of the amount that your creditors receive, you are discharged or freed from the obligations of your debts through bankruptcy. When you file your bankruptcy case, all lawsuits, foreclosures, and other collection actions against you are stopped. However, creditors may seek permission from the Court to continue collection activities against you in certain circumstances.
Certain debts cannot usually be discharged in a Chapter 7 proceeding. Examples are:
• educational loans;
• amounts owed for alimony and child support;
• damages awarded in a personal injury case;
• certain taxes;
• loans obtained through the filing of false financial statements;
• money obtained through fraud or embezzlement;
• consumer debts for luxury goods incurred within forty days of the filing of the bankruptcy petition;
• cash advances obtained within twenty days of the filing of the petition in bankruptcy.
Once debts are discharged, you may not seek relief in bankruptcy for a period of six years.
CHAPTER 13 (Personal Reorganization)
Chapter 13 of the Bankruptcy Code provides an alternative to Chapter 7 liquidation proceedings. It allows for repayment of debts, in whole or part, out of future income over a period of three to five years. There are, however, certain limits on eligibility. Chapter 13 is designed for individuals with regular income. A weekly paycheck is not required to qualify, but income must be stable and regular enough to make payments under a plan of repayment. In general, only a portion of what is owed must be repaid pursuant to the plan. Certain priority debts, however, such as taxes, must still be paid in full. Other debts, which cannot be discharged under a Chapter 7 proceeding, may be discharged after partial payment under a Chapter 13 Plan. These include:
• education loans;
• damages awarded in respect of personal injuries; and
• certain taxes.
You may voluntarily dismiss a Chapter 13 proceeding or convert it to a Chapter 7 case at any time. For both Chapter 7 and Chapter 13 cases, the Court requires complete disclosure of the debtor's assets and expenditures. The Court may elect to dismiss the petition if it finds fraud in the preparation of the debtor's case.
The law requires us to disclose to you that we are a debt relief agency, and that we help people file for bankruptcy relief pursuant to the bankruptcy code.
Estate Planning
Estate planning depends upon certain tools that help us accomplish your goals. These tools are comprised of the following documents.
Health Care Proxy.
This instrument designates someone (your Health Care Agent) to make critical health care and treatment decisions for you in the event you are unable to make those decisions for yourself.
Living Will.
This instrument is your statement that in the event you are suffering from a terminal illness you do not wish to be kept alive by "artificial means." When used in conjunction with a Health Care Proxy, a Living Will also serves as a directive to your Health Care Agent.
Durable Power of Attorney.
There are essentially two types of decisions someone may have to make for you: those relating to health care, and those relating to finances. The Durable Power of Attorney is an instrument that allows your "attorney-in-fact" to manage your financial affairs in the event that you are unable to manage them yourself because of physical or mental disorder. Your Attorney-in-fact may, but need not, also be your Health Care Agent. An Attorney in fact need not be an attorney licensed to practice law; rather, he or she is someone you have authorized to act on your behalf.
Last Will and Testament.
Known by most as the "Last Will," this is the instrument, which upon your death, specifies how your wealth will be distributed. A Last Will also permits you to make other decisions, such as your choice of guardian for your minor children, and the individual who will be responsible for insuring the provisions of your Last Will are honored.
Living Trust.
This document separates legal ownership of an asset from its use or enjoyment. It provides you (or someone you select) with the benefits of ownership, while placing the burden of management in another. Through careful implementation, use of a Trust plan may result in significant tax savings. An attractive feature of a Living Trust is that it allows for the transfer of an asset to a trust over which the grantor retains a significant measure of control.
Business Law
Business law involves the formation, operation, and dissolution of various forms of businesses permitted in Massachusetts. The main types of businesses are sole proprietorships, general partnerships, limited liability partnerships, corporations, and limited liability corporations. Each type has advantages and disadvantages. Donahue & Grolman will help you select the form of business most appropriate to your individual circumstances.
Sole Proprietorships
Favored by many because of low start-up and administrative costs. No paperwork has to be filed to establish the business, although local permits may be needed. Decision making is simple: the owner of the business decides. An additional benefit is that the owner will typically have to prepare only one tax return. A disadvantage is that the owner is personally liable for all debts incurred by the business. There is no protection of the owner's personal assets.
Partnerships
Generally, a partnership is a business association formed by two or more people. Partnerships can be further classified into General Partnerships or Limited Partnerships.
General Partnerships can be formed by oral agreement, though for clarity and enforcement reasons they should be expressed in writing. No filing with the Secretary of State is necessary. Each partner can be sued individually or jointly for all debts of the partnership. The personal assets of the general partners receive no protection from creditors.
Limited Partnerships are created by filing a charter with the Secretary of State. The cost of filing, of course, adds to the start-up costs. The partnership is composed of general partners and one or more limited partners who operate as silent partners. The limited partners typically contribute capital but do not participate in the decision making process. A limited partner's liability is limited to the amount of money contributed, and his assets are protected from creditors. General partners, by contrast, make the day-to-day decisions of the partnership. Their liability is not limited, and creditors of the limited partnership may pursue general partner's personal assets. A limited partnership must file an informational tax return, but no tax is paid directly by the partnership.
Limited Liability Partnerships
Limited Liability Partnerships are formed by written agreement and filed with the Secretary of State. They offer many of the advantages of partnerships but limit liability of the partners to the amount of their investment. LLPs are a flexibile alternative for businesses.
Corporations
Corporations are formed when articles of organization are filed with the Secretary of State. A corporation is an entity much like a person in that it can sue or be sued in their own name. Corporations may also own property in its own name. The owners of the corporation are called shareholders and their liability is limited to the amount of their investment. A Board of Directors, elected by the shareholders, manages the affairs of the corporation. Officers of the corporation run the day-to-day activities. A corporation can be "closely held" meaning it is owned by only a few people or it can have shares sold on the recognized markets, and may be owned by millions of different shareholders. For tax purposes, corporations are divided into Subchapter S Corporations and C Corporations. In order to qualify for tax treatment as a Subchapter S corporation, there must be fewer than 35 shareholders, all of whom must be individuals. It is up to the individual corporation to decide whether or not they wish to be considered a Sub-S Corp. Treatment as a Sub-S Corp. is considered an elective status. In electing Sub-S treatment, a corporation files an informational tax return but income is divided among the shareholders and is included on their individual tax returns. A C corporation pays taxes based on corporate earnings.
Limited Liability Companies are organizations consisting of one or more individuals. The individuals who constitute the organization are referred to not as "shareholders," but as "Members." Members are not personally liable for the debts, obligations or liabilities of the Company. Moreover, LLCs are treated as partnerships for federal and state tax purposes. LLCs provide a level of flexibility and power that is enormously attractive.
Civil Litigation
Over three-fourths of legal disputes are resolved out of court through discussion and negotiation between the parties. However, when the parties are unable to reach consensual resolution, civil litigation is the next usual step. Civil litigation is the process by which a claim is shepherded through the court system. Your attorney will first file a complaint with the clerk of the appropriate court. A complaint is a document outlining the dispute, listing the facts that have occurred, the reasons the Plaintiff (the person initiating the claim) believes they are entitled to relief, and what relief they hope to obtain. The Defendant is served a copy of the Complaint and is given a specific number of days to answer the allegations.
When answering the Complaint, a defendant may also make a counter-claim, stating that they are entitled to specific relief from the plaintiff. If more than one defendant is involved, each may assert what are known as cross-claims, which are complaints against other defendants. During this period, a defendant may decide that there is no basis for a claim, and he or she may seek to Dismiss. A judge then decides if the case should go forward. Following the filling of an Answer, the discovery period begins. Discovery is an effort to obtain further information to validate a party's claim that they are entitled to relief or prove that they are not liable. Discovery generally consists of submitting written questions (interrogatories) to each party, requesting copies of documents pertaining to the dispute, and asking questions, under oath, of witnesses to the claim (depositions). Settlement negotiations may occur during this period. A party who feels its case has been weakened by the discovery process may feel compelled to settle before the trial while a party who has seen its case strengthened will have more leverage as the trial date draws near.
Before the trial occurs either party may file a motion for summary judgment. This motion is supported by affidavits (statements taken under oath) or other evidentiary materials. This motion contends that there are no relevant issues of fact in dispute, and that the moving party is therefore entitled to judgment as a matter of law. If the judge denies this motion and the parties do not settle, the matter goes to trial.
In a typical trial attorneys will make their opening statements, then the plaintiff will introduce his or her case. This is done through the questioning of witnesses and the introduction of evidence. When either attorney, while questioning a witness, asks a question that the other attorney believes is improper or attempts to introduce evidence the other attorney feels is impermissible, the other attorney must object. If the attorney does not object at that point in the trial, that issue cannot be challenged on appeal. The defendant may present any witnesses or evidence which they feel will help their case. Both parties will then make closing arguments, trying to persuade the judge or jury that theirs is the winning argument. When both sides have concluded, either party may again make a motion for judgment as a matter of law. If the motion is denied, the judge or jury will then deliberate, and return with a verdict. If the judge is convinced that the jury has reached a verdict which is inconsistent with law, the judge may enter a judgment notwithstanding the verdict. This is a rarely used procedure as the court grants great deference to the wisdom of the jury.
Gay & Lesbian Law
Why gay and lesbian law? Gays and lesbians have certain concerns which attorneys who are trained in this area understand and respond to. Typically, these concerns relate to predatory job discrimination and termination, unfair denial of housing, domestic contracts and estate planning. These concerns survive the arrival of same-sex marriage in the Commonwealth.
Personal Injury Law
The concept of personal injury law falls under the broad category of tort law. A tort is any injury that's addressable in civil litigation, and is not breach of contract. The severity of a tort is directly related to the damages (or compensation) the injured party may receive.While tort law also does involve intentional offenses such as assault, battery, and conversion (theft), the bulk of tort law involves negligence. In order to prove a defendant acted negligently, a plaintiff must prove: that a duty existed between the two parties, that one of the parties breached that duty, that the breach caused the injury, and that there was in fact a resulting injury.
To establish a duty, the plaintiff must prove that there was some type of relationship between the parties which created a duty (such as parent/child, employer/employee, landlord/tenant) or that the defendant failed to act like a reasonable person would have acted under similar circumstances. In general, everyone owes everyone else a duty to act reasonably. A breach of duty occurs when someone fails to act in a reasonable manner. Causation is divided into actual cause and proximate cause. A common test for actual causation is the "but for" test. Would the accident have occurred but for that event? Proximate cause is more difficult to define, but frequently an event or activity is considered a proximate cause if a reasonable person could have foreseen that some damage would result from that event or activity.
Injury can be proven through the use of medical bills, medical experts, computation of lost wages, and a wide assortment of other tools which demonstrate the extent of loss which occurred as a result of the accident. Damages are frequently compensatory and/or punitive. Compensatory damages are meant to compensate the injured for the accident, meaning any medical bills, lost wages, and pain and suffering. Punitive damages, not frequently seen in ordinary negligence cases, are meant to punish the wrongdoer through monetary penalties which are paid to the injured in addition to the compensatory damages. A special type of damages which can be claimed by one suing on behalf of a decedent is loss of consortium. Loss of consortium is an intangible injury which represents the loss of companionship suffered by the surviving spouse or family.
Some common defenses to negligence claims are that the plaintiff contributed to the accident by acting negligently or that the plaintiff assumed the risk of encountering a known danger. Negligence actions are governed by a statute of limitations which generally states that an negligence claim must be filed within three years of the accident or, in some cases, within three years of the date when the harm is discovered.
Real Estate Law
Nearly everyone has an interest in real estate. Individuals either rent a home or own one, and most businesses lease their space. What you should know about real estate depends entirely upon what you are buying and leasing. Buying a single family home, for example, differs from buying a condominium. Here's a quick checklist of some of the issues you'll want to watch for when buying real estate.
THE SINGLE FAMILY HOME:
• The Home Inspection. Be sure to get a professional to inspect your new home before you sign a contract to buy it. The inspector should check for evidence of pest or termite infestation, evaluate the soundness of the mechanical and electrical systems, and tour the roof and chimney to check for defects.
• Septic System. If the property is serviced by a septic system, be sure it passes inspection. All septic systems must be installed in compliance with the Title V of the State Sanitary Code, and whenever a home is sold the septic system must pass rigorous inspection.
• Easements and Covenants. Find out if there are there is a right of way, such as access to a beach or private road, which benefits the owner of the property. Also check out if there are any restrictions which limit your use or ownership of the property. A seemingly small restriction can greatly reduce the market value of the house or your enjoyment of it.
• New Construction. If the builder promises to build a sound structure, make him put his promise in writing by giving you warranties against defects which become apparent only after the house is completed and you've paid for it and moved in.
THE CONDOMINIUM:
The condominium is a single-family home, except that it's stacked vertically one on top of another, instead of horizontally, on an expanse of land. Unlike traditional single family homes, condominiums represent a special form of ownership regulated by a set of documents referred to as the Master Deed, Declaration of Trust, Bylaws, and Rules and Regulations. If you're buying a condominium, you must read these documents. They place important restrictions on how you live in the building. You'll also want to satisfy yourself that the association of Unit owners is financially sound, and that the association isn't running in the red. If there are Unit owners who haven't paid their monthly fees, the condominium may be running on empty. You should also find out if the building is professionally managed or "self-managed." Small buildings of 3-4 Units can be easily managed by the owners themselves, but larger, more complex buildings usually require professional property management services which can be costly.
Before you sign a contract to buy a condominium Unit, find out if there's any litigation affecting the association and whether there are any proposed increases in the monthly fees or special assessments. If there are any new fees, find out why! You'll also want to know the ratio of owner-occupants to tenants. Generally, the more tenants in a building the more difficult it is to maintain the property from wear and tear. A good lawyer should also be able to help you understand whether there are any restrictions on such issues as pets, parking, storage or renting.
Contract Law
A contract is an agreement between parties. The glue that binds parties to contracts is called "consideration." It's what you get in exchange for performing your side of the bargain. A contract can fail if no consideration has been exchanged between the parties. A contract entered into as a joke, by a minor, or under force of threat is probably invalid. Similarly, one cannot enter into a contract for illegal services. For example, a contract between two parties to murder a third will not be enforced by a Court.
Not all contracts must be written. A deal reached orally is sufficient to bind the parties. A document is preferred because the terms are easier to prove if litigation later develops or if the parties disagree. Certain contracts, however, must be expressed in writing. Most notably, a contract to buy or sell land. Consult your lawyer if you're not sure whether or not you need a written contract.
In former times, contracts were written in a pure legalese. Terms like "Party of the first part," and "Party of the second part" were strewn throughout the document, and were sure points of confusion. Today, most contracts are written with a view toward simple, understandable language. However, you should always check with an attorney before signing a contract. Even though the document looks simple, there may be some hidden pitfalls.
If a party fails to perform as required by the contract, the non-performing party is said to be "in breach." In most states, except for Massachusetts, one may be in breach even before the date of performance if the party has given an indication that he doesn't plan to honor the agreement. Compensation awarded by the court, called damages, will be measured by the amount of harm caused. Typically, one must bring an action for breach of contract within six years of the other party's breach. Failure to initiate an action within the window of opportunity will render the claim time barred.
|
