U.S. Treasury Sending $1,200 Relief Payments

Wasson and ThornhillFinancial Crisis

The U.S. Treasury is sending money to most adults “as rapidly as possible,” $1,200 if you make less than $75,000, plus $500 per dependent.   On Friday (March 27) Congress passed and the President signed into law the Coronavirus Aid, Relief, and Economic Security Act. It’s also called the CARES Act, better known as the massive $2.2 trillion pandemic relief … Read More

Driving While Intoxicated Personal Injury

Wasson and ThornhillBankruptcy Law

If you owe someone for injuring them by unlawfully driving while intoxicated, that debt would be a priority debt in bankruptcy. So what?   Priority Debts For many weeks our blog posts have been considering how bankruptcy deals with “priority” debts. Examples of these special debts that we’ve covered include child/spousal support, income taxes, and wages owed employees. Sections 507(a)(1),(4), … Read More

Pay Your Debt to an Employee

Wasson and ThornhillBusiness Bankruptcy

If you operate or used to operate a business and are considering filing bankruptcy and would like to pay an employee, the law can help you.   Our last two blog posts were about debts owed to your employees or independent contractors. Specifically we discussed the conditions in which past wages, commissions, or benefits qualify as “priority” debt. Two weeks … Read More

Debts for Employee Wages

Wasson and ThornhillBusiness Bankruptcy

Debts for wages, commissions, and employee benefits may be priority debts, more likely paid. It depends on the timing and amount of the debt.     Our last dozen blog posts have been about “priority” debts. These are special unsecured debts that bankruptcy law treats better than the rest, called “general unsecured” debts. (Secured debts are a third main category … Read More

Chapter 13 and Unpaid Child or Spousal Support

Wasson and ThornhillChild & Spousal Support

If you are behind on child or spousal support, Chapter 13 is better because it stops collection of this unpaid support. Chapter 7 doesn’t.   Last week we discussed situations in which Chapter 7 would help if you’re behind on child or spousal support payments. We made clear that Chapter 7 “straight bankruptcy” provides only limited help. Mostly it gives you relief … Read More

An Income Tax Chapter 13 Plan

Wasson and ThornhillIncome Taxes

An income tax chapter 13 plan lets you to pay the IRS whatever you can afford, avoid some or all penalties, and stop interest from accruing.   Today we put the facts of last week’s blog post into a Chapter 13 plan, showing how it actually works. You’ll see how Chapter 13 saves you money and avoids stress as you … Read More

Pay Income Tax Debts through Chapter 13

Wasson and ThornhillIncome Taxes

One of the smartest ways to pay your priority income tax debts—ones that can’t be discharged, written off—is through Chapter 13.   Last week we discussed the advantages of paying priority debts through a Chapter 13 “adjustment of debts” case. We referred to recent income taxes as one of the most important kinds of priority debt. Today we show how … Read More

Priority Debts in a No-Asset Case

Wasson and ThornhillEffects of Bankruptcy

In a Chapter 7 no-asset bankruptcy case, the trustee collects nothing from you and pays nothing on your debts, including your priority ones.   Most Chapter 7 Cases Are No-Asset Cases Chapter 7—“straight bankruptcy”—is the most common type of consumer bankruptcy case. They are generally the most straightforward, lasting about 4 months start to finish. Usually everything you own is … Read More

Priority Debts in Bankruptcy

Wasson and ThornhillBankruptcy Law

In bankruptcy some debts are treated much, much better than others. Priority debts are treated much better in various important ways.   Debts Are Different So the Law Recognizes Some Differences The law does not treat all debts the same. That’s because you have different kinds of creditors that you owe for very different reasons. The law tries to be … Read More

Co-Signed Debt

Wasson and ThornhillBankruptcy Advice

If you have a co-signed debt, you’re concerned not just about the joint debt, but also about your separate liability to your con-signer.   If you have a co-signed debt you tend to be more concerned about one of two sets of problems. You’re either mostly worried about the other co-signer, or about the creditor you’re both owe on the … Read More

Bankruptcy Prevents a Support Lien

Wasson and ThornhillChild & Spousal Support

Chapter 7 prevents a support lien by discharging other debts so you can afford the support payments. Chapter 13 does so by stopping liens directly.   Child and Spousal Support Liens If you fall behind on child or spousal support payments, your ex-spouse can put a lien on your home.  (Most likely a lien can be imposed on your other … Read More

Prevent Income Tax Liens with Chapter 7

Wasson and ThornhillIncome Taxes

Chapter 7 can effectively prevent income tax liens if it’s filed before a tax lien is recorded and the tax qualifies for bankruptcy discharge.   Last week’s blog post was about filing bankruptcy to prevent the IRS/state from recording income tax liens on your home. The “automatic stay”—bankruptcy’s broad freeze of creditor collection actions—stops tax lien recordings immediately when you … Read More

Protect Your Home from Income Tax Liens

Wasson and ThornhillIncome Taxes

Bankruptcy can protect your home from income tax liens. In the right situations you pay nothing on the tax, instead of needing to pay it all.     Income Tax Liens Are Dangerous Our last two blog posts were about judgment liens. First was about how filing bankruptcy can sometimes remove, or “avoid,” a judgment lien from your home. Second … Read More

Protect Your Home from Judgment Liens

Wasson and ThornhillCreditor Lawsuits

Bankruptcy can protect your home from judgment liens. It can stop a lawsuit from becoming a judgment, and then a judgment lien.   Judgment Liens Are Dangerous Our last blog post was about how filing bankruptcy can sometimes remove, or “avoid,” a judgment lien from your home. This is a great potential benefit of bankruptcy if a judgment lien has … Read More

Stripping a Second Mortgage with Chapter 13

Wasson and ThornhillHome Mortgages

Under the right circumstances bankruptcy can strip a second (or third) mortgage off your home’s title, and radically reduce how much you pay.   Summary Do you have a second or third mortgage on your home? Imagine if you could stop paying that monthly mortgage payment. Imagine over the course of the next 3 to 5 years paying only as … Read More