McCloud Law Group Legal Blog

Sunday, September 28, 2014

US Citizen gives birth while abroad: What now ?

The Child Citizenship Act & How It Impacts Children Born to American Parents Abroad

Each year, thousands of Americans give birth to children outside of the United States. Although United States Immigration Law is ruled by the principle of “right of soil” meaning citizenship is determined by one’s place of birth, there are special considerations that come into play when an American citizen has a child abroad. The Child Citizenship Act (CCA) which went into effect on February 27, 2001, established the criteria for foreign born children, including adopted children, to obtain U.S. citizenship. In most cases, children who are less than 18 years of age and have at least one parent who is an American citizen (by birth or naturalization) will be able to obtain U.S. citizenship.

If you are expecting a child and living abroad or simply taking a vacation overseas during your pregnancy, it’s important that you contact the local embassy or consulate to verify current law and make sure you meet all of the requirements necessary to obtain citizenship for your new addition. Under the CCA which seeks to simplify the immigration process, a foreign born child who has at least one parent who is a United States citizen automatically acquires citizenship upon entry into the country as an immigrant provided that he enters the country before his 18th birthday. No further paperwork is necessary. Once here, the parent may request a Certificate of Citizenship and a U.S. passport. 

For American parents who wish to remain abroad and raise their children outside of the United States, citizenship of foreign-born children can only be acquired through application. In this case, the American parent would need to contact the local embassy and submit the following documents:

  • Photographs of the child
  • Fee
  • The child’s birth certificate
  • The parent’s birth certificate or naturalization certificate
  • The parents’ marriage certificate (if applicable)
  • Evidence of termination of previous marriages (if applicable)
  • Evidence of a full and final adoption (if applicable)
  • Evidence of all legal name changes (if applicable)
  • Form N-600/N643 Supplement A (if applicable)

It’s important to note that the CCA does require the U.S. citizen parent of a child living abroad to have five years of physical presence in the U.S. with at least two years occurring after age 14, in order to apply for citizenship on behalf of the child. In some instances, where the parent does not meet this requirement, the physical presence of the citizen’s parent (the grandchild of the child in question) may be used.

Since the laws are subject to change, it’s important that you consult a U.S. immigration attorney prior to giving birth abroad. A knowledgeable attorney can help you understand your options and identify the best course of action to obtain American citizenship for your child.

Thursday, September 18, 2014

Buying Out a Partner without a Shareholder Agreement ?

Buying Out a Partner When There Is No Shareholders’ Agreement in Place

Like most relationships, business partnerships frequently experience highs and lows, with periods of both prosperity and turmoil. When ongoing disagreements cannot be resolved, or one partner decides to leave the business, the remaining partner(s) often seeks to buy out the shares of the departing party. If there is no shareholders’ agreement in place, and the partners are in agreement, the dissolution of the partnership can usually be accomplished with the help of a qualified business law attorney and a CPA.

If the business is a corporation, the purchase would likely be structured as a stock sale. In essence, one party would purchase the exiting partner’s shares of stock in the corporation, in exchange for the purchase price. The purchase price could either be paid up front at the closing, or some, or even all, could be paid to him over a period of time. If any of the purchase price is to be paid over a period of time there normally would be a promissory note that the remaining partner(s) would sign documenting that the departing partner is owed the money, and providing for payment terms. These payment terms would include the interest rate, number of payments, and frequency of payments. Typically the remaining partner(s) stock in the company would be pledged as security for the repayment on the note. If the business is not a corporation the steps would be similar but slightly different.

Prior to the dissolution of the partnership, all parties must consider whether the business has any debt. If it does, all partners will need to carefully review the loan documents to make certain that the partner’s departure from the business does not trigger some type of acceleration of the debt. In a small business it is normal for a lender to require the business owners to personally guarantee the debt. So, if this is the case, the business may need to negotiate with the lenders to get the exiting partner released from the debt.

Another item to consider, which should be explored with the guidance of a qualified tax advisor, is whether the partner’s sale of the business to the remaining partner(s) will trigger any taxes. This may be more so from the departing partner’s standpoint but there may be some capital gains taxes that will have to be paid and all parties should get appropriate advice.

Finally, if there is real estate involved that is used by the business, there may be steps that have to be taken to address that. Perhaps the business leases office space from someone else. The business will need to make certain that the change in ownership does not somehow violate the lease and if it does, the partners should seek the landlord’s consent. If the departing partner has personally guaranteed the lease, the remaining partner(s) may need to negotiate with the landlord to release the exiting party.

The bottom line is there are many factors that come into play when dissolving a business partnership. An attorney should be contacted before any decisions are made to ensure all of the necessary details and consequences are considered in the preparation of a purchase agreement.


Monday, September 8, 2014

Trademark and Servicemark Basics

Trademarks and Service Marks

A trademark or service mark is a word, name, logo, symbol or design that identifies the source of a product or service, distinguishing it from the competition. While trademarks are used to identify products, service marks are used to identify services. Both marks are afforded the same protections and subject to the same requirements.

To qualify for trademark protection, the mark must be used in commerce and it must be distinctive. Trademark law is tied to the power of Congress to regulate interstate commerce.Therefore, to qualify for federal trademark protection a mark must be used in interstate commerce. Marks used in intrastate commerce are eligible for state trademark protection. If a mark is not being used in commerce at the time a trademark application is filed, the mark may still be registered if you can establish a good faith intent to use the trademark in commerce on a future date. Nevertheless, trademark rights are awarded to the first individual or entity to actually use the mark in commerce.

The trademark must also be sufficiently distinctive to identify and distinguish the goods or services from those of other sources. Distinctiveness generally falls within one of four categories: 1) arbitrary or fanciful; 2) suggestive; 3) descriptive; and 4) generic.

A trademark categorized as arbitrary or fanciful, or suggestive, is automatically considered to be inherently distinctive, and the exclusive right to use the mark is determined solely based on who was first to use the mark in commerce. Descriptive trademarks are only protected if the mark has acquired secondary meaning to members of the public.  If the mark merely describes the type of product or service, it will not stand out and leave an impression in the minds of consumers. Generic terms are ineligible for any trademark protection. A trademark may be generic at the outset, or it can become generic over time through common usage, such as “aspirin”.

Trademarks can be registered at either the federal or state level, depending on whether the product or service will be sold across state lines or within one state only. Registration is not required for trademark protection, but there are significant advantages to registration. Registration puts the public on notice that the mark is used to identify a particular good or service. Under federal law, a registered trademark can achieve incontestable status following five years of continuous use.Under state law in most jurisdictions, even unregistered trademarks are protected under unfair competition laws.

Trademarks that are registered at the federal level are permitted to use the ® designation. Absent registration with the U.S. Patent and Trademark Office, trademark owners can use the letters “TM” or “SM” in conjunction with the mark, to alert the public of the owner’s claim to the mark.

Trademark owners are obligated to protect the mark by taking legal action against any infringers, regardless of how insignificant the infringement may seem. Owners must be consistent in asserting and defending their rights to the mark. Failure to do so could result in a waiver of the right to enforce the mark.

Thursday, August 28, 2014

The basics of a Limited Liability Company ("LLC")

Limited Liability Company (LLC): An Overview

The limited liability company (LLC) is a hybrid type of business structure, offering business owners the best of both worlds: the simplicity of a sole proprietorship or partnership, with the liability protection of a corporation. A limited liability company consists of one or more owners (called “members”) who actively manage the company’s business affairs. LLCs are relatively simple to establish and operate, with minimal annual filing requirements in most jurisdictions.

The best form of business structure depends on many factors, and must be determined according to your particular business and overall goals:


  • LLC members enjoy a limited liability, similar to that of a shareholder in a corporation. In general, your risk is limited to the amount of your investment in the limited liability company. Since none of the members will have personal liability and may not necessarily be required to personally perform any tasks of management, it is easier to attract investors to the limited liability company form of business than to a general partnership.

  • LLC members share in the profits and in the tax deductions of the limited liability company while limiting the potential financial risks.

  • LLCs offer a relatively flexible management structure. The business may be managed either by members or by managers. Thus, depending on needs or desires, the limited liability company can be a hands-on, owner-managed company, or a relatively hands-off operation for its members where hired managers actually operate the company.

  • Because the IRS treats the limited liability company as a pass-through entity, the profits and losses of the company pass directly to each member and are taxed only at the individual level (which may or may not be an advantage to you, depending on the profitability of the LLC and your personal income tax bracket).

  • Members of an LLC have flexibility in dividing the profits and losses. In a corporation or partnership, profits must be divided according to percentage of ownership. However, with an LLC, special allocations are permitted, so long as they have a “substantial economic effect” (e.g. they must be based upon legitimate economic circumstances, and may not be used to simply reduce one member’s tax liability).


  • Limited liability companies are, generally, a more complex form of business operation than either the sole proprietorship or the general partnership. They are subject to more paperwork requirements than a simple partnership but less than a corporation. Annual filings typically include statement and nominal filing fee payable to the Secretary of State, informational returns to the IRS, and filing of a state tax return.

  • In certain jurisdictions, single member LLCs may not be afforded the same level of limited liability protection as that of an incorporated entity.

Also note that in many states, an LLC is prohibited from rendering “professional services” which can include companies providing services that require a license, registration or certification.   Such professionals typically have to establish a Professional LLC which does not offer limited liability for professional malpractice.

Monday, August 18, 2014

C-Corp vs S-Corp: Which structure is best for your new venture ?

C-Corporation Vs. S-Corporation: Which Structure Provides the Best Tax Advantages for Your Business?

The difference between a C-Corporation and an S-Corporation is in the way each is taxed. Under the law, a corporation is considered to be an artificial person. Shareholders who work for the corporation are employees; they are not “self-employed” as far as the tax authorities are concerned.

The C-Corporation

In theory, before a C-corporation distributes profits to shareholders, it must pay tax on the income at the corporate rate. Then, leftover profits are distributed to the shareholders as dividends, which are then treated as investment income and taxed to the shareholder. This is the “double taxation” you may have heard about.

C-Corporations enjoy many tax-related advantages :

  • Income splitting is the division of income between the corporation and its shareholders in a way that lowers overall taxes, and can avoid or significantly reduce the potential impact of “double taxation.” By working with a knowledgeable tax advisor, you can determine exactly how much money the corporation should pay you as an employee to ensure the lowest tax bill at the end of the year.
  • C-Corporations enjoy a wider range of deductible expenses such as those for healthcare and education.  
  • A shareholder can borrow up to $10,000 from a C-Corporation, interest-free. Tax-free loans are not available to sole proprietors, partners, LLC members or S-Corporation shareholders.

S-Corporations pass income through to their shareholders who pay tax on it according to their individual income tax rates. To qualify for S-Corporation status, the corporation must have less than 100 shareholders; all shareholders must be individual U.S. citizens, resident aliens, other S-Corporations, or an electing small business trust; the corporation may have only one class of stock; and all shareholders must consent in writing to the S-Corporation status.

Depending on your situation, an S-Corporation may be more advantageous:

  • Electing S-Corporation tax treatment eliminates any possibility of the “double taxation” referenced above. S-Corporations pay no federal corporate income tax, but must file annual tax returns. Because losses also flow through, shareholders who are active in the business can take most business operating losses on their individual tax returns.
  • S-Corporations must still file and pay employment taxes on employees, as with a C-Corporation. An S-Corporation may not retain earnings for future growth without the shareholders paying tax on them. The taxable profits of an S-Corporation pass through to the shareholders in the year they are earned.
  • S-Corporations cannot provide the full range of fringe benefits that a C-Corporation can.

Friday, August 8, 2014

Seven Tips for Negotiating Your Divorce Settlement

Seven Tips for Negotiating Your Divorce Settlement

Regardless of how long you have been married, negotiating a settlement is the most important part of the divorce process. Although it is no easy task, working with your spouse to arrive at mutually agreed terms of your marital dissolution is easier on your wallet and your psyche. Whatever conditions caused the breakdown in the marriage are likely still present throughout the divorce negotiation, exacerbated by emotions such as anger and fear as you each transition into the next stage of your lives.

However, staying focused on what’s best for your future will serve you well as you navigate these tumultuous waters. Taking your divorce case to trial and letting the court decide what will become of your property or children is rarely in your best interest. Although you may not get everything you hoped for during a settlement negotiation, you will save a tremendous amount of money, time and emotional anguish.

Divorce settlement negotiations involve a degree of both skill and art, both of which can be attained by following a few simple tips. Even if your attorney is doing the negotiating on your behalf, it is important that you are clear regarding your priorities, so you can make decisions that are truly in your own best interest for the future life you are establishing post-divorce.

Negotiating a settlement agreement necessarily involves a certain amount of give and take, on both sides, so keep in mind that you most likely won’t get everything you want. But following the tips below can help ensure you get what’s most important to you.

  • Establish clear priorities.
  • Know what you can give up completely, where you can be flexible and those critical items where you are unable to budge.
  • Be realistic about your options and the bigger picture, so you can be reasonable when you must “give” something in order to “take” something.
  • Stay focused on the negotiation itself, and your future; avoid recalling past resentments or re-opening past wounds. Your divorce settlement negotiation is no place for “revenge” which can ultimately delay your case and cost you thousands in unnecessary legal expenses.
  • If your soon-to-be-ex-spouse becomes emotional or subjects you to personal attacks, don’t take it personally. This may be easier said than done, but it is important to stay focused on your priorities and realize that such “noise” does not get you any closer to a settlement agreement.
  • If you spouse presents you with a settlement offer, consider it carefully and discuss it with your attorney. It may not include everything you want, but that may be a fair trade off in order to finalize your divorce and move on with your new life.
  • If you are negotiating your own settlement agreement, consult with an attorney before you make an offer to your spouse or sign any proposed agreement.

By keeping the focus on your priorities, and avoiding the emotionally-charged aspects of your failed marriage, you can ensure you negotiate a divorce settlement agreement that you can live with.

Monday, July 28, 2014

No Longer Spouses, But Still Partners

No Longer Spouses, But Still Partners

 Workplace romances are never advisable, but sometimes co-workers and business partners fall in love and get married. Unfortunately, they also sometimes fall out of love and get divorced. What happens next?

For some couples, the end of the marriage parallels the end of their working relationship—and possibly the end of the business itself. There are a number of options in such cases. The couple can sell the business and split the proceeds as part of the divorce settlement, or one partner can buy out the interest of the ex-spouse.  Or they can try to split the business, with each taking half. Speak with an experienced business lawyer about the pros and cons of these options for your situation.

However, some former spouses do figure out a way to maintain their business partnership after the divorce. The personal relationship may have hit a dead-end, but the investment involved in building and growing a successful company can make it hard to walk away—and unless the business is wildly successful, with plenty of prospective buyers waiting in the wings, it is feasible that neither party can afford to walk away.

Overcoming the Challenges

There are challenges in every business partnership, and ex-spouses can adopt some basic business strategies to cultivate and maintain a healthy working relationship:

  • Sign a partners agreement. Be clear about your separate and joint responsibilities, and matters of liability. Make a contingency plan outlining how assets will be divided in case either partner decides to leave.
  • If necessary, divide up responsibilities or tasks you once did together so you each have more autonomy.
  • Establish a board of directors. Trustworthy business people may have valuable perspectives about the direction and goals of your company.
  • Keep the company finances transparent. Money is often one of the most difficult issues in a divorce. Get help if necessary to streamline your accounting processes.
  • Be professional around other staff members and employees. It is not fair to put employees in a position where they feel pressured to take sides or respond to inappropriate complaints about their other boss. A toxic work environment is never good for business.

Thinking Outside the Box

Even with the best intentions, a divorced couple may keep falling back into their old patterns at the workplace. If you still think that the business is viable and worth the effort to make a go of it, get professional help. A good marriage therapist is trained to help couples understand the point of view of the other person and gain insight into their dynamics, and this can be valuable information post-divorce, as well. 

Most entrepreneurs have a knack for thinking outside the box. Maybe you and your ex- can alternate day and night shifts for a few months.  Build a partition between your desks. It might take a while before you move from being unhappy exes to friendly partners - but it just might be worth it.

Friday, July 18, 2014

An Ounce of [Legal] Prevention and Planning for Your New Business...

Protect Your New Business with Preventative Legal Planning

Most Legal Issues Can Be Resolved Before They Even Arise. Here’s How.

Most people are familiar with the idea of “preventative” legal action. The term refers to anticipating legal issues and conflicts and working to prevent them, rather than solving them or “winning” them once they occur. Companies can benefit from implementing preventative legal strategies as this approach is often less expensive than litigation, mediation, arbitration, and local, state and federal fines.

By working with an attorney early on in the creation of your new business, you can build a sound foundation for your company while likely saving money down the road. The following steps can serve as a great starting point for sound legal planning:

  1. Establish a relationship with an attorney who can assist you with the legal issues your new business will face early on in the start-up process. When an attorney is familiar with your firm from the onset, he or she can more effectively anticipate and address legal challenges and provide solutions. Also, many business law attorneys will allow for a flat-fee relationship that enables you to address legal issues as they arise without incurring any additional expenses.

  2. Determine what you want, negotiate it and memorialize it in proper legal documents. Businesses encounter disagreements with vendors, landlords, employees, partners and others. To minimize the number of conflicts, it’s important to establish written contracts for all important agreements, arrangements and accommodations.

    A business law attorney can help you identify all key concerns regarding employee compensation and benefits, property usage and maintenance, relationships with suppliers and responsibility and profit sharing with partners. An attorney can ensure that, when a question, disagreement or conflict arises, your interests are written down, clearly stated and legally protected by a mutual agreement with the party in question.

  3. There are many exciting steps in starting a new business venture; selecting the type of legal entity the business will be is rarely one of them. Yet, it’s important to select a business structure early. Corporations offer numerous advantages but also require officers, boards, articles of incorporation and other formalities. Partnerships and sole proprietorships are simpler than most other business structures but open owners to potentially costly liability. Limited liability companies offer a middle ground for many, providing a liability shield and comparative simplicity. A business attorney can help you determine which business structure will work best for you by taking into account tax planning, location and other key considerations.

Even with preventative legal planning, a lawsuit may arise. If it does, it’s important to approach it from a business, not a personal standpoint. This strategy can help you make decisions that are best for your company’s future, keep your focus on the day-to-day needs of your business and avoid unnecessarily disclosing information. For legal advice and hands-on assistance during the formation and continued operation of your business, contact a qualified business attorney.

Tuesday, July 8, 2014

What Is The H-1B Visa ?

What is the H-1B Visa ?

Each fiscal year, the H-1B provisions authorize approximately 85,000 foreign workers in the science, technology, engineering and mathematics (STEM) sectors to work in the U.S. on a temporary basis.

The H-1B visa program is intended to assist U.S. employers in securing workers with very specific education, training and experience to fill a company's workforce gaps. Employers who are otherwise unable to find workers with the business skills and abilities required for specific positions within their company can sponsor a foreign worker who fits the qualifications for the position the company is seeking to fill.

In order to obtain an H-1B visa, an employer must extend a job offer and file a petition to sponsor a worker with the United States Citizenship and Immigration Services (USCIS). Each petition, known as an I-129, may only include one potential employee.

An H-1B visa is a non-immigrant visa under the Immigration and Nationality Act, which means that a H-1B visa holder who quits or is dismissed from their sponsoring employer must either find another employer to sponsor them, apply to change to another non-immigrant status, or leave the U.S.

The law provides for the protection of visa holders as well as similarly employed U.S. workers, as the sponsoring employer is mandated to provide working conditions that will not affect the working conditions of workers in similar capacities. In addition, U.S. companies are not allowed to employ an H-1B worker at any location where workers who fall into the same job classification as the H-1B employer are on strike or a lockout is occurring.

In 2013, the USCIS received approximately 124,000 H-1B petitions during the filing period, proving that there is a lack of available U.S. STEM workers. In April of that year, the USCIS used a "lottery" system to "randomly select" the 65,000 petitions permitted by the general category cap. H-1B provisions allow for an additional 20,000 petitions under the advanced degree exemption limit. 

In 2014, the USCIS again used a computer-generated "lottery" to "randomly select" approval for H-1B visas the FY2015 fiscal year, beginning on April 1, 2014.  On April 7, 2014, the FY2015 H-1B visa cap was reached.  USCIS reports that a total of 172,500 H-1B visa applications were received in the six-day window in which applications were accepted.


Monday, June 30, 2014

Financial Records and Your Business

Financial Records and Your Business

In starting a business, entrepreneurs are inundated with paperwork, legal requirements and numerous planning meetings. While most of these activities seem burdensome, many business owners cite financial management and record-keeping as the most daunting task of daily operations. With some businesses having thousands of transactions each day, coupled with expenses and employee payroll, it should come as no surprise that business financials can be overwhelming. With so many documents and figures, it can be difficult to stay organized and leads many business owners to question what they are required to keep and what they can simply discard.

The Basics in Understanding Your Business’ Financial Health
While it may be tedious, maintaining organized and balanced financial records isn’t an option for businesses, it’s a requirement. Not only may you have to produce these records if you are audited by the IRS but it’s likely that creditors, your bank and future stockholders will want to see these records for insight into the health of your business. Having a solid record-keeping plan early on will save you a great deal of time and energy down the line when you are asked to produce financials for your company. As a general rule of thumb, business owners should produce, and regularly review, the following:

Balance Sheet - Simply defined, this statement summarizes your company's assets, liabilities and shareholders' equity at any given time. It is in essence a snapshot of your company's financial health, showing the net worth of the business.

Profit and Loss Statement - This statement summarizes the revenues, costs and expenses incurred during a set period of time (most businesses do this on a quarterly basis but some even do a monthly report). It indicates how well the business is doing in terms of buying and selling inventory (or services) and ultimately showcases profitability.

Cash Flow Statement - This document reports the cash generated and used during a set time frame. Some business models are based upon cash flow and in these cases, this report may be paramount in understanding the well-being of the business.

Financial Record Retention
While certain types of business require that special records be kept, most are not required by law to maintain a definite set of documents. As a general rule of thumb, the IRS recommends that businesses keep the following records:

Gross Receipt Documentation

  • Cash register tapes
  • Bank deposit slips
  • Receipt books
  • Invoices
  • Credit card charge slips
  • Forms 1099-MISC

Purchase Documentation

  • Canceled checks
  • Cash register tape receipts
  • Credit card sales slips
  • Invoices

Expense Documentation

  • Canceled checks
  • Cash register tapes
  • Account statements
  • Credit card sales slips
  • Invoices
  • Petty cash slips for small cash payments

Travel, Transportation, Entertainment, and Gift Expenses (only if you plan to deduct these)

Asset Documentation

  • A record of when and how you acquired the assets.
  • Purchase price
  • Cost of any improvements
  • Section 179 deduction taken
  • Deductions taken for depreciation
  • Deductions taken for casualty losses, such as losses resulting from natural disasters
  • Documentation on how the asset was used
  • When and how you disposed of the asset
  • Selling price
  • Expenses of sale
  • Employment taxes

There are specific employment tax records you must keep for at least four years. It’s important that all business owners, and their accounting teams, review IRS guidelines for more information on these records.

There are different requirements when it comes to how long records must be retained. In determining the best financial management and record-keeping solution, it’s imperative that you contact a business law attorney to discuss your options and ensure compliance.

Wednesday, June 18, 2014

What property is protected in Chapter 7 & 13 ?


What Property Is Safe from Sale in Chapter 7 and Chapter 13 Bankruptcy?

Bankruptcy is perhaps the most effective way to eliminate unmanageable debt. It is a highly structured, entirely legal process that has helped millions of individuals and families emerge from the frustrating, demoralizing and expensive path of minimum payments and impossibly high interest rates. Yet, numerous families who could eliminate debt and get back on their financial feet choose not to file. Why?

A common deterrent to filing for bankruptcy is confusion and misinformation regarding the sale of property during the bankruptcy process. This is unfortunate because bankruptcy laws are devised specifically to protect certain property types from sale during bankruptcy. In fact, those who file under Chapter 13 bankruptcy, assuming they qualify, experience no loss of property at any point during the bankruptcy process. Instead, under Chapter 13 bankruptcy, filers simply restructure their debt payments under court order and remaining debt is discharged at the end of the debt repayment plan.

Chapter 7 bankruptcy involves the sale of certain property, including second homes, “extra” vehicles and other property that can be sold to pay off outstanding debt. Many types of property, though, are protected from sale during the Chapter 7 bankruptcy process. These are different from state to state, but can include, to varying degrees, the following:


  • A primary home, i.e. a “homestead”. A primary home can be a single family home, a mobile home, a boat, a condominium, a townhouse or other form of home
  • A vehicle or vehicles
  • Personal property such as clothing, furniture and appliances
  • Jewelry, art and heirlooms to a varying level of value
  • Income and financial assets from Social Security and from personal injury and wrongful death actions up to varying levels
  • Tools of a trade, such as equipment, materials, uniforms, books, tools, furnishings and a motor vehicle
  • Various property such as building materials, health aids, a burial plot, books and animals
  • Numerous forms of pensions as well as public and private retirement benefits

Additional property can often be deemed exempt during the bankruptcy process as the filer works with the bankruptcy court.

Chapter 7 offers numerous advantages in the pursuit of eliminating unmanageable debt. When nonexempt property is sold, the proceeds aren’t forfeited by the bankruptcy filer. Instead, they are used to reduce the filer’s debt. And importantly, many types of debt that remain unpaid after nonexempt property is sold is discharged, or “forgiven”. Types of dischargeable debt can include:

  • credit card debt
  • debt owed directly to retailers
  • health care debt
  • unpaid utility bills
  • debts due to lawsuits
  • rental and lease debt, and
  • deficiencies remaining after the repossession of a car or the foreclosure of a house.

While filers are not able to discharge income tax debt less than 3 years old, child support debt, student loan debt and criminal fines debt, many other forms of debt are dischargeable.

Bankruptcy options are best explored with the help of a knowledgeable bankruptcy attorney. A bankruptcy attorney can answer your questions and provide a recommended course of action based on the specifics of your unique debt challenges.

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