TAX REFUNDS UNDER REVIEW BY BANKRUPTCY TRUSTEES by Dennis Babiniec

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This is the time of year that the bankruptcy trustees assigned to bankruptcy cases are reviewing each case to determine whether there are nonexempt tax refunds to be required to be turned over.  For cases filed in Colorado where the person filing has lived in Colorado for the last 2 years, the tax refund except for earned income credit or additional child tax credit is not exempt (can be required to be turned over by the trustee).

Therefore, the first step would be to prepare the tax returns and determine if there would be a tax refund and if so, if the refund is from earned income credit or additional child tax credit.  The portion of the refund that is not from earned income credit or additional child tax credit is not exempt under the Colorado exemptions and could be required to be turned over by the bankruptcy trustee.  Please see the "Tax Refund Strategies" blog below to get more detailed information for the options when filing bankruptcy.

 Dennis Babiniec
Bankruptcy attorney
10701 Melody Dr., Ste. 350
Northglenn, CO 80234
(303) 451-9110  posted: January 23, 2017
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ACT QUICKLY ON A GARNISHMENT by Dennis Babiniec

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The sooner you act to stop a garnishment of wages by filing bankruptcy the better.  Of course, stopping the deduction from someone's wages is most important.  The preparation and service of a Notice of Automatic Stay within minutes of the filing of a bankruptcy case is the quickest way to stop a garnishment.  Since the judgment creditor must release the writ of garnishment before most employers will stop the garnishment deduction, the service of the Notice of Automatic Stay on the judgment creditor is the quickest way to stop the garnishment.

     There are other benefits to acting quicker to stop the garnishment.  In every bankruptcy case a Trustee is appointed to oversee the case.  One of their main duties is to recover nonexempt assets and nonexempt proceeds in order to pay creditors.  One of the things that a Trustee can recover is garnishment proceeds within the 90 days prior to the filing of the bankruptcy.  If a person waits until substantial wages or bank account balances have been garnished within the 90 days prior to the bankruptcy filing, the Trustee will be more likely to pursue the recovery of the garnished proceeds from the creditor.  The consequence on the person filing bankruptcy is that if the Trustee is going to ditribute money to creditors, they will also want to recover any nonexempt bank balances, wages, tax refunds, etc. in order to increase the amount they pay the creditors.  Many times if it was not for the garnishment proceeds, there would not have been ehnough of other assets to justify having the person filing bankruptcy turning over any nonexempt assets.  So the sooner the garnishment is stopped, the less likely it will cost the person any other nonexempt assets.

Dennis Babiniec
Bankruptcy attorney
10701 Melody Dr., Ste. 350
Northglenn, CO 80234
(303) 451-9110
  posted: November 11, 2016
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Help To Overcome Biggest Obstacle to Bankruptcy Process by Dennis H. Babiniec

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Many clients have commented to me that the biggest obstacle to the bankruptcy process for them was completing the initial information bankruptcy questionnaire and getting their information together.  I offer an optional service to assist the client in completing the bankruptcy information questionnaire and the approach that I use may be helpful to people trying to complete this paperwork.

The first thing I recommend is to gather copies of all the documents requested in the checklist attached to the package of bankruptcy forms.  By gathering all of the documents first (i.e. paystubs, tax returns, copies of bills, etc.), you will have this information available when you are completing the bankruptcy questionnaire and you do not have to stop and look for documents each time there is a question that requires you to look up data or information.  This simple approach helps make it more likely that the client will be able to complete the bankruptcy questionaire in one sitting.  It is much more efficient to be able to complete the bankruptcy forms in one sitting than to do a peice-meal approach in multiple sessions.  Once the bankruptcy questionnaire is completed and turned in, the burden is off the client and I can take it from there.

Dennis H. Babiniec
attorney at law
10701 Meldoy Dr., Ste. 350
Northglenn, CO 80234
(303) 451-9110 posted: June 30, 2016
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There is More to Being a Bankruptcy Attorney than Pushing Paper by Dennis H. Babiniec

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Practicing bankruptcy law for over 30 years gives me some perspective of the importance of analyzing a bankruptcy case before it is filed with the Court.  A bankruptcy attorney should do more than push paper, they should think first.  A careful analysis of the client's assets and possible bankruptcy exemptions is an important step in the process of deciding if and when to file a bankruptcy case.

When a bankruptcy case is filed with the court, a bankruptcy Trustee is appointed in each case.  The bankruptcy Trustee has certain powers under the Bankruptcy Code that go into effect when the case is filed.  Sections 541-561 and 721-727 of the Bankruptcy Code gives the bankruptcy Trustee appointed to a case administrative authority over all of the assets of the bankrtupcy estate.  The allure of getting protection from creditors can cause people to overlook what the bankruptcy Trustee can do regarding their assets.

A bankruptcy attorney should inform a client of the possibility that a bankruptcy Trustee could pursue or investigate an asset to determine if there is enough value to make payment to the creditors in the case.  Therefore, once the bankruptcy case is filed, neither the debtor or the debtor's attorney is able to control all aspects of what happens to property owned by the debtor if the poperty is not covered by an exemption or exceeds the exemption amount allowed by law.

Therfore, a thorough review of the circumstances of each bankruptcy client and the applicable exemption law is important to avoid problems later.  At least if the bankruptcy attorney does a thourough analysis, the client can decide before the bankruptcy case is filed if the risk of losing an asset is worth the benefit of being protected from their debt.  That way the client can make the decision of whether they wish to assume that risk or look to another option.

Dennis H. Babiniec
attorney at law
10701 Melody Dr., Ste. 350
Northglenn, CO 80234
(303) 451-9110 posted: May 5, 2015
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Tax Refund Strategies by Dennis Babiniec

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As the year comes closer to a close, bankruptcy Trustees are viewing the 2014 tax refunds as possible assets for bankruptcy debtors to turn over.  In order to develop a strategy regarding your expected tax refunds you should be aware that once your bankruptcy case is filed, your strategy if, any, is locked in.  That is why it is important to understand your options regarding tax refunds before you file a bankruptcy case.

The bankruptcy Trustee's job is to look for nonexempt assets to collect in order to pay creditors.  Therefore the starting point to determine a strategy regarding tax refunds is to determine the applicable exemptions.  Since my bankruptcy practice is located in Colorado, I most often use the Colorado exemptions.  However, if the person filing bankruptcy has not lived in Colorado for the two years preceeding the filing of the bankruptcy case, the exemption of the state they lived in two years prior to the date of filing is the source of the applicable exemption.  Some states however, do not allow the use of their exemptions to nondomiciliaries (persons not living in the state), in which case the federal exemptions are applicable.

Once the applicable exemption is known, the next question is whether the person filing bankruptcy would prefer to receive their tax refund and spend it prior to the filing of the bankruptcy or prefer to receive the nonexempt part of the tax refund for expenses after the filing of the bankruptcy.  The answer to the question is usually based on how much of the tax refund is exempt.  If Colorado was the applicable exemption law, the earned income credit and additional child tax credit are exempt.  Therefore, if someone's tax refund was entirely or predominately from earned income credit and/or additional child tax credit, then they would know that the portion of the tax refund within these two categories would not be taken by the bankruptcy Trustee as nonexempt tax refunds.  Therefore, if they preferred to receive the tax refund after the filing of the bankruptcy to help them on their fresh start, that would be a viable strategy.  On the other hand if someone knew that all or most of their tax refund was nonexempt, they could expect to lose the nonexempt portion of the tax refund to the bankruptcy Trustee unless they receive it before they file their bankruptcy and use the proceeds on reasonable and necessary expenses prior to the filing of the bankruptcy and retain proof of how they spent the tax refund.

A proper analysis of the applicable exemption law and how it applies to the expected tax refunds  before a bankruptcy case is filed will give the client a chance to determine what strategy they wish to pursue regarding their tax refunds.  Then once the strategy is determined, the timing of the filing of the case can be consistent with the tax refund strategy to produce the optimum result.

This is one example of how understanding tax refund strategies can produce an outcome more favorable to the person filing bankruptcy.  The tax refund strategy is just one of the factors that I review as I am assembling and analyzing a bankruptcy case.  My goal is to get the best result possible for my clients.

By Dennis Babiniec
bankruptcy attorney
10701 Melody Dr., Ste 350
Northglenn, CO 80234
303-451-9110 

  posted: December 11, 2014
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Don't Wait Until It's Too Late by Dennis Babiniec

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It is common for people to avoid dealing with stressful situations including financial difficulties.  When the money coming in does not cover the bills that are due, it produces anxiety because there seems to be no answer to the problem.  But if financial issues are not addressed, eventually the debts will go into the collection process leading to judgments and then garnishments and judgment liens.  The end result is that the person's wages, bank accounts or home could be attached to pay the debt and inaction could exacerbate the financial problems even more by the loss of money and property.

Finding out your options prior to getting to that point is a prudent thing to do.  As a bankrutpcy attorney with over 30 years of experience in the Denver area, I can analyze financial situations and inform the person of their options in order to address their specific situation.

The three most common options to deal with debt problems are a debt repayment approach, a debt settlement approach or a bankruptcy approach.  I begin my analysis with examining the financial resources of the person, their living expenses and their debt obligations.  From the analysis I can inform the person of whether they have sufficient income or assets to likely accomplish the resolution of their debts or whether bankruptcy would be a viable option.

The bankruptcy option generally includes the availability of Chapter 7 and Chapter 13 bankruptcy.  Each Chapter has it's own features and requirements that can be examined under the individual circumstances of each person.  But what sets aside bankruptcy from the other debt resolution options is that it involves the legal discharge of debts by operation of law, rather than having to rely on the creditor to be willing to negotiate an arrangement to resolve a debt.

So even if a creditor is uncooperative and not willing to work with someone to resolve the debt, the Bankruptcy Code will determine the dischargeability of the debt and the creditor is powerless to enforce a debt that is discharged in bankruptcy.

If you are under stress over your financial situation, I would like to help.  Please call me today at:  303-451-9110 for a Free Initial Consultation to find out your options and how bankruptcy could apply to your situation.

Dennis H. Babiniec
attorney at law
303-451-9110
10701 Melody Dr., Ste. 350
Northglenn, CO 80234 posted: October 17, 2013
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Eight Year Anniversary of Bankruptcy Abuse Prevention and Consumer Protection Act by Dennis H. Babiniec

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October 17, 2013 will be the eight year anniversary of the effective date of the Bankruptcy Abuse and Consumer Protection Act that brought many changes to the bankruptcy laws. One of those changes was extending the date that a person would be eligible for a Chapter 7 discharge of debt to eight years from the filing of a previous bankruptcy case granting a discharge of debt.  

What that means is that people have to wait at least eight years from the filing of a previous bankruptcy case before they can file a Chapter 7 case to discharge their debts that are legally dischargeable.

There is a shorter rule regarding Chapter 13 cases.  A person is eligible for a Chapter 13 case to discharge debts if it has been more than 4 years from a prior Chapter 7 case or more than two years from a prior Chapter 13 case.

If you think you would be interested in filing a Chapter 7 or Chapter 13 bankruptcy case, I would like to help.  Call 303-451-9110 for a free intial consultation.

Dennis H. Babiniec
Attorney at law
10701 Melody Dr., Ste. 350
Northglenn, CO 80234
Call: 303-451-9110 
posted: September 20, 2013
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Don't Let Garnishments Take A Bite Out Of Your Finances by Dennis Babiniec

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     In my over 30 years of experience as a bankruptcy attorney in the Denver area (including Northglenn & Thornton), I hear numerous situations of somebody being negatively effected by a garnishment.  Having wages or bank accounts garnished in some case could jeopardize someone being able to keep up their vehicle or house payments.  In many cases had a client consulted with me sooner, they most likely would not have had bank accounts or wages garnished by creditors.  
     Don't wait until the creditor takes a bite out of your bank account or wages, Call 303-451-9110 for a free initial consultation regrading your bankruptcy options.  Once a creditor files a law suit against you, they are only one step away from obtaining the judgment that will allow them to garnish your wages and bank accounts. If bankruptcy is appropriate, I would like to help you stop collection actions, (except for child support and spousal maintenance), by getting your case filed as soon as possible.

I would like to help you get through the bankruptcy process smoothly.  Call Dennis H. Babiniec Today at 303-451-9110.
BBB accredited, A+ rated.

Dennis H. Babiniec
Attorney at law


posted: March 20, 2013
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Key to a Bankruptcy Case Going Smoothly by Dennis Babiniec

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In my 30+ years as a bankruptcy lawyer in the denver area (northglenn & thornton) I have found that the key to a bankruptcy case going smoothly is having the the petition and schedules contain full and accurate information.  The Trustee appointed to the case is required by the Bankruptcy Code (Bankruptcy Reform Act) to determine that the petition and schedules are complete and accurate.  Even small oversights will cause the Trustee to require the attorney to amend the petition or schedules or if not, will file a motion to dismiss the case.  Also, inconsistencies of information in the schedules will also greatly increase the chances of an inquiry by the US Trustees Office.
My philosophy as a bankruptcy attorney is that the extra effort it takes to do the job right is worth it to make the case go smoother.  It also gives the client more value for the attorney services by avoiding the costs of doing amendments.  From my observations of court hearings in Denver, some attorneys are overlooking the details for the sake of quicker turn around and greater volume.  I believe clients count on their bankruptcy lawyer to look out for their best interests even if it means extra work for both the attorney and the client in order to get the best result.

I would like to help you get through the bankruptcy process smoothly.  Call Dennis H. Babiniec Today at 303-451-9110.
BBB accredited, A+ rated.

Dennis H. Babiniec
Attorney at law

posted: September 25, 2012
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Eight Years of Scratching & Clawing to keep from Drowning in Debt & Finally SomeRelief by Dennis Babiniec

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In 2005 over 42,000 bankruptcy cases were filed ahead of the imposition of The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.  However the economy worsened from 2005-2007 causing the situation to go from bad to worse for some people who had already filed bankruptcy and then found themselves unemployed or under employed or who incurred large unexpected medical expenses.  Some of these people have been fighting an uphill battle ever since.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 provides that at least 8 years must pass from the filing of a prior Chapter 7 case before a Chapter 7 case can be filed again.   Persons who filed a Chapter 7 bankruptcy in 2005 or earlier, may either already be eligible or soon will be eligible to file for chapter 7 again if necessary.  The decision to file bankrukptcy, expecially if someone has already filed before, must be made carefully.  The filing of Chapter 7 bankruptcy is carried on one's credit report for up to 10 years and so it is possible that if a second bankruptcy case is filed within 10 years that the person would have 2 bankruptcies showing on their credit report and that would substantially limit their credit opportunities.

However those who are having their wages or bank accounts garnished or in danger of garnishment by their creditors may be looking for protection from debt.  Filing bankruptcy would prevent almost all creditors from collecting their debts (domestic support obligations excepted).  If you are interested in finding out your options, I offer a free intial consultation just Call 303-451-9110 and I would be glad to help you out.

Dennis H. Babiniec
Attorney at law

posted: May 14, 2013
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