I have been out of work for some time, my bills have gotten out of hand, and I need to file for Bankruptcy. I may be getting a new job soon. Will my new job affect my Bankruptcy filing?
If a would-be Chapter 7 debtor were to see a significant change in their income before filing a Chapter 7 bankruptcy, there is a risk that the debtor would no longer qualify under the Chapter 7 Means Test, and must file under Chapter 13. While Chapter 13 Bankruptcies are often effective in allowing a debtor to cure mortgage arrearages and keep their house, if the debtor’s intention is to pursue liquidation of all assets (including the house) or does not have real property to protect, your increased income would be required by the U.S. Trustee to fund the Chapter 13 plan, and not be used for other costs/expenses. In this case, a Chapter 7 Petition should be filed before any increase in income.
Sunday, October 7, 2012
Thursday, October 4, 2012
I'm getting Divorced, can I file a Single Status Tax Return?
For the purposes of Federal and Massachusetts income tax returns you are required to file under the status of either "joint" or "married, filing separately" if you are married to your spouse on December 31st of the tax year in question. Therefore, if you are in the process of getting a divorce but were still legally married on December 31, 2010, then you must file under one of these two statuses for the year 2010.
There is no specific law that requires you to file under the status of "joint" or "married filing separately", and typically this is your choice. A Judge can order parties to file jointly if there will be a benefit (such as a higher refund), but this is not typical.
In each case the choice of how to file can be affected by different factors. For example, if you are concerned that your spouse is hiding income, then you definitely would not want to file a "joint" tax return because you could be liable for his/her hidden income.
In most cases it makes sense to file jointly because their is usually a financial benefit, but in your case you should consult with an accountant to figure out the best option for you.
There is no specific law that requires you to file under the status of "joint" or "married filing separately", and typically this is your choice. A Judge can order parties to file jointly if there will be a benefit (such as a higher refund), but this is not typical.
In each case the choice of how to file can be affected by different factors. For example, if you are concerned that your spouse is hiding income, then you definitely would not want to file a "joint" tax return because you could be liable for his/her hidden income.
In most cases it makes sense to file jointly because their is usually a financial benefit, but in your case you should consult with an accountant to figure out the best option for you.
Sunday, September 30, 2012
Post-Divorce Problems: My Ex is Doing Better than Me
A common complaint that potential clients express to us is a dissatisfaction with their prior agreement or judgment because their ex-spouse seems to be doing very well. They might have a bigger house, or take a lot of vacations, or have a really nice car. In some cases this is a legitimate indicator that a support order may not be fair, and in those cases a Complaint for Modification may be warranted (our next few posts will address when this is appropriate).
However, many times this imbalance reflects something which can’t be fixed by a Complaint for Modification. In some cases exes have not fully accepted the divorce yet, and comparing your lifestyle to your exes is an indication that you haven’t yet moved on. Even with a well-crafted agreement your life is unlikely to turn out exactly equal to your exes.
Many couples divorce because they have different views on finances and in these cases usually one spouse is good at budgeting and the other is not. Divorce doesn’t change these habits, and a spender will still be a spender and a saver will still be a saver. A few years after a divorce, these different habits will become evident in the lifestyle of each ex-spouse. One of the consequences of separating your finances in the divorce is to give each person the chance to fail or succeed on their own, and if your ex has succeeded because they manage their finances better you have no legal (or moral) right to gain an ongoing benefit from that success.
In other cases, the imbalance that has been created is due to poor choices that were made at the time of the divorce. Both you and your ex-spouse may be equally good at budgeting, but if you made poor financial trades in your property division then you may be feeling the consequences of that now. For example if you were divorced in 2004 (prior to the housing market crash) and you took house equity in exchange for your spouse taking other assets, then you probably lost out on that deal. Your ex might still have close to their original value of assets, while you are left with little to no home equity.
I have often tried to explain to divorcing clients that trading one type of asset for another often has both tax consequences and risk/benefit consequences. Pinning one’s hopes in the housing market for their retirement is not always the best idea (especially not right now). However, many people still choose to trade different types of assets, in order to meet a non-financial goal, such as being able to stay in their home.
Once a property division is completed, these types of decisions, and their consequences, cannot be revisited. The importance of understanding your property division and its potential consequences is one of the most important reasons to consult with good legal counsel, and oftentimes with financial planning experts as well.
Click here to learn more about crafting appropriate Divorce Agreements.
M.G.L. 93H and Data Privacy Basics
Massachusetts has enacted one of the strictest data-privacy laws in the country and is scheduled to go into effect on March 1, 2010. Any personal information that any business entity maintains or stores is subject to Massachusetts General Laws Chapter 93H, while M.G.L 93I governs the destruction of physical and electronic documents and data. Both M.G.L. 93H and M.G.L. 93I define “personal information” as a person’s last name and either his or her first name or first initial, combined with any one of the following: a social security number; driver’s license number or state-issued identification card number; financial account number, debit or credit card number, with or without any required security code, access code, personal identification number or password that would permit access to a resident’s financial account.
Guidance for business’ implementation of M.G.L. 93H can be found in 201 CMR 17.00, and creates an affirmative duty to every person that “owns, stores or maintains personal information about a resident of the Commonwealth” to “develop, implement, maintain and monitor a comprehensive, written information security program applicable to any records containing . . . personal information.” In determining whether such comprehensive security program complies with M.G.L. 93H and accompanying 201 CMR 17.00, a court will consider:
(a) the size, scope and type of business of the person obligated to safeguard the personal information under such comprehensive information security program;
(b) the amount of resources available to such person;
(c) the amount of stored data;
(d) the need for security and confidentiality of both consumer and employee information.
Any business must have a written information security program (“WISP”) that establishes security policies for the firm’s computers and wireless system, and all personal information contained therein. All personal information stored on laptops or “other portable devices” must be encrypted. All records and files, including emails, containing personal information that is transmitted across public networks or wirelessly must be encrypted “[t]o the extent technically feasible.” The written security program must include plans for systems monitoring for unauthorized use, up-to-date firewall protection, and up-to-date system security software that is set up to receive regular security updates.
Authentication protocols must include a “reasonably secure method of assigning and selecting passwords.” 201 CMR 17.04(1)(b). Assigning random complex passwords to clients would be a preferable defensive strategy. Such passwords must be controlled “in a location and/or format that does not compromise the security of the data they protect.”
With that in mind, businesses should develop a policy which includes:
(a) Encryption of all emails that contain personal information.
(b) Encryption of all personal information stored on portable devices
(c) Installation of system security agent software that is set up to receive security updates
(d) Maintenance of firewall protection for all files on a system connected to the internet.
(e) Implement a termination/Disciplinary policy for misuse of personal information.
(f) Education/Training of employees on proper use of computer security system and importance of personal information security.
Attorney Trask of Kelsey & Trask, P.C. was a cryptologic materials manager in the U.S. Marines, and has experience planning and implementing encrypted communications (voice and data) networks. If you have any questions regarding M.G.L. 93H, contact us at (508) 655-5980 or click here.
Guidance for business’ implementation of M.G.L. 93H can be found in 201 CMR 17.00, and creates an affirmative duty to every person that “owns, stores or maintains personal information about a resident of the Commonwealth” to “develop, implement, maintain and monitor a comprehensive, written information security program applicable to any records containing . . . personal information.” In determining whether such comprehensive security program complies with M.G.L. 93H and accompanying 201 CMR 17.00, a court will consider:
(a) the size, scope and type of business of the person obligated to safeguard the personal information under such comprehensive information security program;
(b) the amount of resources available to such person;
(c) the amount of stored data;
(d) the need for security and confidentiality of both consumer and employee information.
Any business must have a written information security program (“WISP”) that establishes security policies for the firm’s computers and wireless system, and all personal information contained therein. All personal information stored on laptops or “other portable devices” must be encrypted. All records and files, including emails, containing personal information that is transmitted across public networks or wirelessly must be encrypted “[t]o the extent technically feasible.” The written security program must include plans for systems monitoring for unauthorized use, up-to-date firewall protection, and up-to-date system security software that is set up to receive regular security updates.
Authentication protocols must include a “reasonably secure method of assigning and selecting passwords.” 201 CMR 17.04(1)(b). Assigning random complex passwords to clients would be a preferable defensive strategy. Such passwords must be controlled “in a location and/or format that does not compromise the security of the data they protect.”
With that in mind, businesses should develop a policy which includes:
(a) Encryption of all emails that contain personal information.
(b) Encryption of all personal information stored on portable devices
(c) Installation of system security agent software that is set up to receive security updates
(d) Maintenance of firewall protection for all files on a system connected to the internet.
(e) Implement a termination/Disciplinary policy for misuse of personal information.
(f) Education/Training of employees on proper use of computer security system and importance of personal information security.
Attorney Trask of Kelsey & Trask, P.C. was a cryptologic materials manager in the U.S. Marines, and has experience planning and implementing encrypted communications (voice and data) networks. If you have any questions regarding M.G.L. 93H, contact us at (508) 655-5980 or click here.
Subscribe to:
Posts (Atom)