Spokane Probate Attorney Makes Difference

You May Have to Fight For Your Inheritance
by Spokane Probate Attorney, Steven Schneider

After a loved one dies, it can be very painful when the heirs can’t agree on how the estate should be distributed. Often, if there is a will, it may simply divide “the estate” by the number of heirs. Depending on how joint bank accounts between the decedent and one or two heirs are held, those funds may not even become part of the estate. Many people don’t know this. Things like family heirlooms, furniture, silver, etc. are most often not addressed at all, except lumped together as ‘residue’ of the estate. As a Spokane probate attorney, I council my clients about these issues others may miss.

Family Fighting Over Inheritance

Does this look like your family during probate? Maybe so, maybe not, but whatever your family’s portrait looks like, Spokane probate attorney, Steven Schneider, can help you!

Dividing an estate can an emotional and hurtful time, not only because families are actively grieving, but also because:

  • Some of the items being distributed may hold intense sentimental value to more than one family member.
  • Some family members may feel they are owed a greater portion of the estate because they were the primary caregiver while others feel that caregiving is an act of love, not a reason to receive more in the estate.
  • The person named executor or personal representative in the will can make all the decisions about how the “estate” is handled prior to the distribution stated in the will, even though others disagree on their method.
  • Some heirs feel they are not given their fair share because they lived far away, didn’t have as much contact with the decedent or they feel another of the heirs was able to disparage them and have undue influence over the terms of the will.
  • One sibling or caretaker has controlled access and communication with parents, often for years, and the other heirs feel excluded.
  • Sometimes, heirs resent the family member named as executor, especially if the executor charges the estate for their time spent on administration, even though it is legal.

If any of this publication is alarming to you, please contact me so that I can share with you my expertise:

  • At the time you or your loved one are writing your wills
  • When, as an executor, you need to open a probate
  • If you are not an executor, but you feel as if there is something not going right in the probate, or feel that the executor is not following the law.

Many times I can prevent future problems or I can help you work through probate without litigation and help to create an understanding and insight between heirs. As a Spokane probate attorney, I feel it is best if families can come through this process in better shape than when they started.

How Estate Planning and Probates Work

  • Without a will, the law of the State in which the person lived determines who receives their property by laws of ‘intestate succession.’ Generally, State laws follow a common sense pattern. In Washington for example, first, one-half goes to the surviving spouse and one-half to children; if there is no spouse, then to the children equally; grandchildren take the parents portion if the parent is deceased.
  • If there is a Will, however, it must be produced and filed in the court and a Personal Representative appointed. It’s usually a spouse or child named in the Will. These are meant as protections for the heirs, but, in most cases, the court does not oversee the actions of the Personal Representative.
  • “Non-intervention” probates are overwhelmingly the most common type of probate, created to avoid court delays and overcrowding. If the estate is solvent, the Personal Representative has complete control of the Estate without court supervision.  The court will only intervene if someone brings a dispute to the court by filing a Petition.

Watch for my next blog, You Do Have Rights as an Heir.

 

ESTATE PLANNING, WILLS AND PROBATE

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Estate Planing, Wills and Probates: Food for Thought

Estate Planing, Wills and Probates: Food for Thought

CAN’T WE ALL JUST GET ALONG?

By Spokane Attorney, Steven Schneider

ESTATE PLANNING, WILLS AND PROBATE: PART ONE

Most probates are easy to get through, take a few short months and don’t cost very much. Even though some attorneys describe them as costly and messy, in my experience the opposite is true. With a good will the process can be well-defined and with a good Spokane lawyer the estate can significantly save its resources.

During my 25 years of experience as a lawyer in the Spokane area, I have processed probates that have good, clear wills in place, and conversely, I’ve seen the downside of having no will or a sloppy will. This has helped me to know exactly where the pitfalls are planted. After listening to a client’s needs and desires, and advising them as needed, I will write a will that uniquely addresses their wishes and individual circumstances. Every family has its own special nuances and estate planning, wills and probate must as well.

The NO WILL option:

  • Any child or other relative can petition to be appointed as executor, now known as Personal Representative.
  • During probate, the surviving spouse will receive all the community property estate and one half of the separate property estate. Children or parents will receive the other half.
  • If you have no spouse, your estate will go to your children equally and without restriction if they are over eighteen.  Yes, even your son who sleeps on his friends couch and dreams only of being a rock star will be handed a lump sum with no restrictions.
  • If one child dies before you, that share will go to that child’s children or your parents. Again, if a grandchild is eighteen, that grandchild’s share will go directly to the grandchild. Under the age of eighteen, the share will go to that grandchild’s parents, yes even the ex-spouse who ran off with a biker and is addicted to drugs.

The OH HELL YES, I WANT A WILL option:

  • You designate who will be in charge of your estate. If you want a specific child to take that position, or even an attorney or family friend, you must have a will that appoints your choice of Personal Representative.
  • If you want to choose the heirs of your estate, you must have a will.
  • The will may contain trusts for disabled or under-age children and grandchildren. The will can distribute property equally, unequally or cut a person out completely.
  • The will can determine when and how the assets are liquidated and distributed, which, in certain circumstances, can be very important.
  • You can give some or all your money to charity.
  • If you have real property in another state, it’s very important to have that brought into your estate plan.
  • You can even have life insurance death benefits paid to your estate to fund your plan.

Many people don’t make wills because they don’t plan on dying soon or they don’t want to think of their own mortality. This has the potential to create discontent and fights within the family when you are gone.  No one wants that result. Estate planning, wills and probate are very important, even if your assets aren’t much, in this case, sometimes it is the thought that counts.

The same applies to other estate planning documents.

  • A Durable Power of Attorney is needed if you will need help with finances and medical decisions during your life, but it must be signed before you need it, before you are determined to be incompetent by your doctor. This could happen without warning, due to a stroke or other sudden ailments.
  • Also, an Advance Directive will tell your wishes about being kept alive artificially or with extraordinary methods. It can be generic or quite explicit or designate a length of time. There are many options.

Consult an experienced estate attorney, when you are contemplating estate planning, wills and probate or are named the Personal Representative in a will.

Future posts will explain separate property, how bank accounts are defined, difficult personalities and more. Visit www.stevenschneiderlaw.com.

 

File Now if the Vandervert Construction Receivership Affects You

Subcontractors, materialmen, engineers, laborers and creditors who are affected by the Vandervert Construction Receivership are all in danger of major losses and possible bankruptcy. A receivership is similar to a bankruptcy, except it is in state court. A court appointed receiver has been placed in charge of paying those who are owed money. Debts can be paid only by order of the Court and sub-contractor lien rights are preserved. The Receiver will operate and/or liquidate the business to try to pay some percentage of each creditors’ claims.

If you are a creditor, subcontractor, materialman, employee or professional owed money by Vandervert Construction you should act now and call an attorney to preserve your claims and lien rights.

Action should be taken now to:
1. Preserve and foreclose your lien rights in the Vandervert Construction receivership.
2. File your secured or unsecured claim in the Vandervert Construction receivership or subsequent bankruptcy.
3. If you have been greatly affected by the Vandervert Construction receivership, you may need to protect your own business from your subcontractors and creditors through reorganization, non-bankruptcy work out or possibly your own business bankruptcy. Laywers with experience in these activities can help you.
5. Educate yourself by getting competent legal advice regarding your rights as a creditor in a receivership or corporate bankruptcy.

Attorneys experienced in bankruptcy, secured and unsecured claims and contractor lien law are better suited to represent your interests in these matters than attorneys in general civil practice. Steven Schneider, Attorney at Law, P.S. has been practicing in this area for twenty-five years at all state and federal court levels.

If you and your business are affected by Vandervert Construction’s unfortunate situation, you need to contact a lawyer who is experienced in contractor lien law, filing for creditor claims and bankruptcy. Filing your claim as soon as possible will help you to be proactive throughout this process. www.StevenSchneiderLaw.com

Wills and Trusts by Spokane Estate Planning Attorney Steven Schneider

FAMILIES ARE IMPORTANT TO US.  THAT’S WHY WE’RE

OFFERING A 25% DISCOUNT THROUGH DECEMBER AND JANUARY

(Mention code number WP122015)

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A Happy Will, A Happy Family

 What is a will? Part One.

  1. A document to keep the kids from each other’s throats and never speaking to each other as long as they live? YES!
  2. A signed piece of paper that can help you and your loved ones reduce or avoid estate taxes? YES!
  3. A loving instrument that gives your estate to your loved ones, schools and charities that have meant the most to you during your life. Triple YES!

In this blog I want to focus on the first question listed above. Your Estate Planning documents, including a will can strengthen your family after you’re gone or break it apart for ever. It’s not only how thoughtfully you divvy everything up, but the tone of voice in which it is written.

A thoughtfully written document takes into account that everyone wants the items that bring the fondest memories, and that one child, for various reasons, may feel they deserve more than the others. Bear in mind that childhood rivalries and longstanding family dynamics may only increase after you are gone. And let’s face it, Mom always did like you best!

I have had clients who insisted on getting one last poke at their good-for nothing-kids. “To Judy who has ignored me for 20 years, I give nothing. To Randall who married that tart even though I told him not to, I give nothing.” Please resist this kind of commentary in your will.

You may have your reasons for giving Billy the house and Sally the jewels, or grandchild A the money for college and grandchild B the money for tech school, but, unless there is a compelling reason, making the distribution as even as possible helps preserve family relationships. A trust fund for a developmentally disabled child, or keeping money away from a heroin addict or person with a gambling problem, is understood. Otherwise, unless everything is distributed evenly, your decisions may bring a measure of animosity and hurt between family members.

If there are special considerations, or if you want to give everything to charity like Warren Buffet, show everyone your will before you die. It seems Mr. Buffet put his last wishes in a press release and sent it to the media.

Also, if you name one child as executor (the “responsible” one) there’s a great possibility that the other members of the family will be resentful, again based on past family dynamics. As I help families sort things out after the death of a loved one, I’ve seen several sue each other until all the assets of the estate are spent on attorney fees and court costs. Other predictable problems arise with step parents and step children.

So, let’s consider options that may keep your family from becoming estranged after your death. In addition to an even distribution, one way to preserve peace among the survivors is to appoint someone outside of the family as executor. This may be a family friend, family attorney, or a more remote relative, someone unswayable. If the estate is large, a bank trust department or a paid professional may be the best choice. For a professional, it will only be a job to get the assets dispersed as quickly as possible. You can arrange for this professional to be paid a set price from the assets after death. The best thing about a paid executor is that your family can get as mad at them as they need to without turning on each other.

Another extremely important consideration is to keep your will updated. Kids grow up and grandkids appear before you know it. A child may pre-decease you. New property may be acquired with a new spouse. All of these situations will not be covered directly in an old will. Various statutes will then take over and fill in the gaps, not necessarily as you would like. For example if you don’t state what happens when a beneficiary pre-deceases you, a statute gives it to their children automatically. Update your estate planning documents to avoid unintended results.

It’s unbelievable how spectacularly your wishes can get all screwed up. Johnny wants to buy half of the family farm, but only wants the portion that would basically make the rest of the property unmarketable. AND…..he can’t understand why Mary doesn’t love him enough to grant that request.  Mary wants all the furniture that has been in said farm and doesn‘t feel she needs to pay the estate anything for it because, after all, she dusted it for twenty years while she was growing up. In my practice I have encountered the above problems and much, much more.

Money can be fairly easy to divide, but items of sentiment are not. Furniture, jewelry, silver (usually everything besides clothing) can be difficult. This is why many professionals advise that all items are priced and the amount of the item is deducted from the beneficiary’s cash portion of the estate. Some people make a list of the sentimental items and designate the receiving family member. This list is allowed to be changed without the formalities of making a will.

Before you throw your hands up in disgust, read this. Thoughtful, loving wills and trusts can avoid most disagreements. Since every family is unique, I have many other suggestions and ideas on this subject that I would love to share with you. I encourage you to make your will now by contacting me at Steven Schneider, Attorney at Law at (509) 838-4458 or SS@StevenSchneiderLaw.com. For more information, visit www.StevenSchneiderLaw.com.

Smart Small Business Owners Defense – Part One: Protect Your Personal Assets

FIRST LINE OF DEFENSE — CREATE A LIMITED LIABILITY COMPANYSmall Business Owners need a good defense just like a football team

Many small business owners often form LLCs to limit the liability of their personal assets should their business be sued. Just like a football team, small business owners have to have a good defense to make it to the playoffs. Without an LLC, some of the assets that can be seized if you lose in a lawsuit are your:

  • Home, if it has more equity than is covered by your Homestead Exemption.
  • Wages, other income and contract payments
  • Savings and investments
  • Vehicles and other personal property
  • Vacation or rental property

Washington state law provides exemptions for $125,000 in equity in your home, personal property exemptions, IRAs, pensions and disability benefits. If a small business owner  properly maintains the LLC, only the business assets can become liable. As a Spokane Small Business Attorney, I can help you easily create an LLC.

SECOND LINE OF DEFENSE FOR SMALL BUSINESS OWNERS —

A GOOD INSURANCE POLICY

Along with creating a LLC, a good insurance policy that covers the full amount of your business assets may save your company. It’s always wise to check your insurance policies to ensure they cover the likely amounts of personal injury and wrongful death awards. The cost of insurance policies rise with the dollar amount they cover, the deductible that must be paid if a claim is filed, and the types of claims they cover. Since insurance policies may not completely protect you from such anticipated claims, owning a business through an LLC can be a way to further protect your personal assets.

EASE OF FORMING A LIMITED LIABILITY COMPANY

Many small business owners who own two or more businesses create a separate LLC for each business. This prevents a lawsuit brought against one of the businesses from putting the other businesses in jeopardy.

An LLC can be simple to form and maintained with a few documents. As a Spokane small business lawyer, I can help you quickly form get the LLC up and running. An LLC must have its own bank account, keep records of annual meetings and major decisions, adopt an Operating Agreement and be renewed with a simple annual registration that can be done on line. Annual registration fees are around $50.

For small business owners reading this blog we are offering a special flat rate of $500 for the months of October and November. Just mention our blog when you call. This includes:

Articles of Formation

  • Operating Agreement
  • First Annual Report
  • Minutes of Organizational Meeting
  • Federal Tax Identification Number
  • Annual Minutes Template

An additional one time filing fee of $200 is required to be paid to the State of Washington.

Contact me, Steven Schneider, today to see if an LLC is right for you. My contact information is (509) 838-4458 or SS@StevenSchneiderLaw.com. My Spokane business law practice is located at 203 N Washington St., Ste 204 in Spokane, WA. I’m licensed to practice in the State of Washington and Idaho.

Who Pays the Debt of a Deceased Family Member? By Spokane Probate Attorney Steven Schneider

It is the right of your family member to spend their money as the need or wishAre You Going to Inherit the Debt of a Deceased Family Member?
By Spokane Probate Attorney, Steven Schneider

When the loss of a family member looms it is difficult, but essential, to determine what debts are owed and where the records of those debts are kept. If you are named in a Power of Attorney or a Will as the person to handle those debts (Executor or Personal Representative), you have a duty to gather this information. Your family member may have already gathered this information or you may have to hunt through a desk or examine a month’s worth of bills to find credit cards, medical bills and other evidence of debt.

Each state has its own laws regarding the handling of estates whether or not there is a Will. In the state of Washington,

  • Debt taken on during a marriage can be considered community (or shared) property, even if it was strictly in your loved one’s name. But, please visit with me about your individual circumstances. Sometimes this area is grey: Spokane probate lawyer, Steven Schneider (509) 838-4458 or email at SS@StevenSchneiderLaw.com
  • Relatives whose names are not listed on the account cannot be held personally responsible for their family member’s debt; however, a creditor is entitled to collect from the estate left by the deceased.

In order to be paid however, the creditor must file a Creditor’s Claim within four months of the receipt of a Notice to Creditors, which is sent to them through the probate process after the death of the debtor. As a Spokane probate attorney, I can help you with this process.

  •  If the creditor does not file a claim, the creditor need not be paid.
  • If a claim is filed and there is a question about the debt, the Executor or Personal Representative of the estate has a duty to explore the validity of the claim.
  • Conversely, even without a claim, if a debt is secured by property of the estate, like a home loan or car loan, heir(s) do receive that property but must pay the debt. If you are in this situation, call me right away: Steven Schneider, Spokane Probate Attorney, (509) 838-4458) or email at SS@StevenSchneiderLaw.com
  • A credit card issued by a bank or credit union that has also made a car loan, may also be secured by the car.
  • Even furniture, major appliances and tires may be security for the debt.

Most importantly, if there is any doubt about what items are secured by the debt, contact the creditor. If you don’t have copies of the original loan documents already, request them from the creditor. If you are a signer on a joint bank account with the deceased, you may be an owner of the account if it was set up as a joint tenant with right of survivorship account.

    • In that case, the account becomes the joint tenant’s property on death and is never in the estate or subject to the estate’s creditors. Again, get the original account documents from the bank.
    • If there is anyone beside the deceased listed on the account, each account holder may be held legally responsible if there is any outstanding balance.
    • If you are a co-signer (not just an authorized user) the creditor will turn to you if there is outstanding debt.
    • Authorized users may not incur debt after the death of the primary account holder. If they do, they will be held responsible for those debts.

Both the estate and the Personal Representative are not liable for the decedent’s debts if no claim is made and the estate is closed after proper Notice to Creditors (see above). As a Spokane probate attorney, I would be happy to help you sort through these questions and more about the probate process. You can reach me at (509) 838-4458 or SS@StevenSchneiderLaw.com.

Debts that the estate itself incurs after the death, such as attorney fees, court costs and costs of the sale of property are administrative expenses and are paid before debts incurred prior to death.
It is the right of your family member to spend their money as they wish.

Remember, it is the right of loved ones to spend their money as they need or wish, as shown in the photos in this article. Just try to remember if you have ever signed on as a co-signer on any accounts to which any charges may have been applied. And, sadly, death can happen at any age.

Probate vs Living Trust – by Spokane Probate Attorney, Steven Schneider

Last Will & Testament

Probate May Be Less Costly and Easier Than Living Trust

It is common to hear the advice “Avoid Probate” when considering estate planning. In my experience, this usually means that an advertising pitch is being made to try to convince you to buy a Living Trust package instead of a Will. In the State of Washington however, the probate process is generally no more expensive than dealing with the same property through a Living Trust.

An average couple with a Will and Community Property Agreement can simply record the Community Property Agreement on the first death for normally under $100. Upon the death of the surviving spouse or domestic partner, it costs $240.00 to submit the Will to probate and most likely around $1,000.00 for the attorney time involved. There is usually not even a trip to the courthouse for the Executor.

With or without a will, Washington law grants “non-intervention powers” to most Personal Representatives (generic term for Executor) meaning that the court takes no part in the process unless there is a dispute. The Personal Representative also has authority over non-probate assets, including separate property, joint tenancy with survivorship, and property in trusts. Being a Spokane probate attorney is a great opportunity to help my client’s sift through the difficult choices they face when creating a will or trust.

The probate process also cuts off the claims of creditors after four months and limits the liability of the Personal Representative once the probate is closed. A simple Will, Durable Power of Attorney, Community Property Agreement and Advance Directive shouldn’t cost more than $500.00 to $750.00 to prepare for an average person or couple. If any Federal or State tax would be due upon death, or if a complex trust is required, there would be additional costs and time incurred.

Living Trusts cost as much or more than the Will package to prepare. With a Living Trust you also need a Durable Power of Attorney, a Community  Property Agreement and an Advance Directive. There is also a cost in transferring your property by Deed or other document into the trust. On death the same property must be transferred out of the trust. If significant property has been left out of the trust by mistake, you may still have to file a probate to clear title or transfer certain assets.

You should have estate planning that is appropriate for your assets, income, heirs and stage of life. While a Living Trust may be appropriate, a simple probate may also be the most economical choice.

Call me at (509) 838-4458 or by email at ss@StevenSchneiderLaw.com if you have any questions regarding making a will.

A Last Will is used to distribute property to beneficiaries, specify last wishes, and name guardians for minor children. It is an important part of any estate plan. Without one, your estate will pass according to state statutes which might not provide for distribution of your assets as you intend.

A Living Trust is used to transfer property to beneficiaries on death without a court filing.  If any property has been left out of the trust or if there is some dispute over distribution, a court proceeding may still be required.

A Living Will or Advance Directive lets you outline important healthcare decisions in advance, such as whether or not to remain on artificial life support and specify organ donation.

A Durable Power of Attorney gives someone else the power to manage your assets for your benefit , but only as long as you are alive.

A Community Property Agreement is used to transfer property to a surviving spouse without a court proceeding.  The agreement may also state that all property acquired from any source becomes community property.

“Save the House,” by Spokane Probate Attorney Steven Schneider

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Why Grandma, What big eyes you have………

                                Run kid, it’s not Grandma, it’s her bank!

Spokane Probate Attorney, Steven Schneider, saves red riding hood's  house from big bad wolf.

Above: This Red Riding Hood forgot to save the house in her grandma’s estate. Pictured below: This Red Riding Hood didn’t

If real estate is passed to an heir in probate, the ownership is effective on the date of death. You can end up like the red riding hood in the picture at the bottom of the page, instead of the red riding hood in the picture at the right. A completed probate is, however, necessary to pass clear title.  The real estate is also subject to any home loan secured by the property.

Since there is a four month period for creditors to submit claims to the estate, usually a lender will be patient even if payments are not made during this period. This does not necessarily mean the heir can assume the loan.  The lender will evaluate the heir as if they were applying for a new loan.  Credit history and the amount of equity in the property will affect the heirs’ ability to keep the property. A house that is worth less than the debt owed on it will have to be sold in a ‘short sale’ to get the lender’s release in exchange for payment of all the net proceeds of the sale.  Unfortunately, in this situation an heir would have to buy the house from the bank. See an attorney who understands estates and real property law before making any decisions regarding such property. Pass this article, “Save the House,” by Spokane Probate Attorney Steven Schneider, to those you feel would find it useful.

Red Riding Hood and her Inheritance

Steven Schneider, Attorney at Law, saves Red Riding Hoods Inheritance

Spokane Bankruptcy Attorney Sings Country Songs

How is Bankruptcy Like a Country Song Played Backwards?

You get your house back, your truck back, your money back, your dog back……

Bankruptcy is not just a last resort for the hopelessly indebted. In fact, bankruptcy is a right given to U.S. citizens in Section 8 of the Constitution, since 1787. Bankruptcy is as American as apple pie and country music. The intent of the bankruptcy laws, as stated by Congress, is to give debtors a “fresh start.” Bankruptcy also provides a predictable way for bad debts to be written off by businesses and for debt free consumers to once again participate in the economy and pay taxes. And bankruptcy is not just for cancelling debts and liquidation of assets. It is possible to keep a house while paying back payments over time. The same is true for a vehicle.

In some cases, a good lawyer can get the auto debt reduced to the actual value of the vehicle and lower the monthly payments required to keep the vehicle. Wages that have been garnished may also be retrieved. You can even get your suspended driver’s license back by paying traffic fines through a Chapter 13 Plan. To sum it up, you could get your house, car, garnished wages, suspended drivers license back and a fresh start by calling an experienced Spokane Bankruptcy Attorney. 

Being relieved of high monthly credit card payments as well as collection agency calls can get you your life back. All of this will improve your quality of life, help you sleep at night, and give you a brighter, more optimistic personality.  Like Taylor Swift and Blake Shelton.  As a Spokane Bankruptcy Attorney, I see good people—just like you— get good results every day.

Spokane Bankruptcy Attorney girl guitar country

Bankruptcy Credit Card Debt Discharge

Can I Get Rid of Credit Card Debt in Bankruptcy

One of the major reasons that people file for Bankruptcy is to cancel, or discharge, credit card debt.  Credit cards tend to have high interest rates and also high late fees and other costs.  Because credit card debt is in essence a high risk loan, the high cost of borrowing is not surprising.

Credit card companies do however, target college students and people with limited resources, including recently bankrupt debtors, with marketing plans that take advantage of inexperience and desperate situations.  Credit cards are a means of getting by as a last resort but the resulting high minimum monthly payments can push a person quickly toward bankruptcy.

Most Credit Card Debt Can Be Discharged in Bankruptcy

The good news is that most credit card debt can be discharged in bankruptcy as is true of most unsecured debt.  Unsecured debt is debt that is not a lien on real or personal property. Examples of secured debt are a home loan or an auto loan.

Some credit card debt can however, be secured debt.  Department store credit cards, like Sears, or cards issued for a specific purpose such as financing the purchase of major appliances, may be secured in part.  Typically, major appliances on your Sears card are secured, while back to school clothes are not.  This means that the portion of the bill that is secured must be reaffirmed in order for the debtor to keep the appliances.

Another common secured consumer credit debt is the purchase of tires and wheels from tire company chains.  If Les Schwab Tires issues a credit card for such a purchase, the debt is most likely secured.  In either case, the creditor will usually provide a reaffirmation agreement, a reduced balance and a new lower monthly payment.

Some unsecured credit card debt may also be non-dischargeable.  If the credit card debt was incurred for “luxury items” within 90 days of the bankruptcy filing, then those charges will not be canceled.  The statute includes in the definition, of “fraud, false pretenses and intent to deceive”

  • 523.  Exceptions to discharge.
  1. consumer debts owed to a single creditor and aggregating more than $500 for luxury goods or services incurred by an individual debtor on or within 90 days before the order for relief under this title are presumed to be nondischargeable; and
  2. cash advances aggregating more than $750 that are extensions of consumer credit under an open end credit plan obtained by an individual debtor on or within 70 days before the order for relief under this title, are presumed to be nondischargeable; and
  3. for purposes of this subparagraph-(I)  the terms “consumer”, “credit”, and “open end credit plan” have the same meanings as in section 103 of the Truth in Lending Act; and (II) the term “luxury goods or services” does not include goods or services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor;

A presumption of non-dischargability means that the creditor does not need to prove anything to keep the debt from being cancelled.

Discounts For Discharging Credit Card Debt

Another option has become available because of the recession and failure of many financial institutions since 2008.  Credit card companies and collectors will usually give a deep discount, some up to 70%, for a lump sum payment.  Note however, that a debt that is written off will be shown as income on your taxes unless you meet some specific exemptions.  This is because the creditor will claim a loss for tax purposes.  Debts that are discharged in bankruptcy, on the other hand, are not taxed as income.

can i get rid of credit card debt during bankruptcyA simple question often times has a complicated answer in the world of bankruptcy. An experienced bankruptcy attorney can help you consider all options, including non-bankruptcy workouts.