More Elderly Filng for Bankruptcy

The Number of Elderly Filing for Bankruptcy is IncreasingElderly and Harrisburg Bankruptcy Lawyer

 

We have all been taught to believe that the “greatest generation” was careful with its  money and its members were very good savers.  We are now surprised to find that the elderly in America are one of the fastest growing segments of  bankruptcy filers. Those who are older and possibly in retirement should not be ashamed at the need to file for bankruptcy. Seeking legal help and filing bankruptcy can help an older person find peace from bills at a time in life when he should be able to relax and enjoy himself.  The elderly can, and do face financial problems that can be alleviated by bankruptcy.

Why the Increase in Bankruptcies Among the Elderly?

Older people are living longer, and consequently they are outliving their savings.  Additionally, many elderly have chronic health conditions that require expensive prescriptions and doctor visits.  Many times, the elderly often suffer from isolation and depression.  This can lead to activity like “QVC shopaholics.”  The allure of interesting products sold by attractive people, who allow you to participate along with your friends, can be almost hypnotic.  The elderly are particularly susceptible to this type of sales activity. Older people are also frequently targets for scam artists, leaving them vulnerable to losing substantial amounts of money to these criminals.

Chapter 13 Bankruptcy for the Retired

Many elderly are very conscientious about paying their credit card bills, but the minimum payments often don’t allow them to pay their other bills.  A Chapter 13 bankruptcy can be a responsible way to resolve these debts, especially if the person stops using credit cards. Rather than paying high credit card interest rates and late charges, bankruptcy can provide a way to pay off credit card balances. Most elderly people are very responsible and are quite embarrassed about filing bankruptcy. But, allowing them to repay their debts through Chapter 13 bankruptcy benefits not only themselves, but their creditors. For example, by repaying their debts through bankruptcy, the elderly can generally maintain and keep their other assets, including their residence and automobile.

Contact a Bankruptcy Attorney in Harrisburg, Lemoyne and Carlisle

For further information about filing bankruptcy, contact Harrisburg bankruptcy attorney Steven P. Miner at (717) 724-9821. Steve understands your concerns and the emotions that seeking a bankruptcy can cause.

Asset Planning For Nursing Home Admissions

Harrisburg Asset Planning Lawyer Discusses Planning for Nursing Home Admissions

 

Harrisburg Nursing Home AdmissionAs most of us grow older and arrange care for our parents we often anticipate the need for long term care ourselves.  As such, it is important to know some basic concepts in paying for nursing care.

Nursing home care is expensive.  Currently in Pennsylvania, the cost of skilled nursing care ranges from approximately $7,000.00 to $11,000.00 per month.   Most nursing home admissions involve a stay of at least twenty-four (24) months, therefore, life savings can quickly be depleted with this type of continuing expense.

For this reason, it is important to consult an attorney to see what steps can be taken to maintain your assets or the assets of a loved one when nursing care is required.  Additionally, it may be prudent to investigate the purchase of long term care insurance before the need arises.  This post, however, generally addresses the funding of nursing care and the preservation of assets.

Paying for a Nursing Home

Most people understand that when they enter a nursing home they will be responsible to pay the monthly bills.  Generally, this is true, yet, what happens when the money begins to run out?  In most situations where only one spouse of the married couple is admitted to the nursing home, the spouse that remains in the home (“the community spouse”), has options to maintain a certain lifestyle and to retain certain assets.

For instance, the primary residence can be maintained by the “community spouse.” This asset then is not available for nursing home expenses.  The law may limit this exclusion, so it is important to consult with an attorney on the latest applicable rules.  Likewise, the community spouse can keep and maintain her own vehicle.  This is important, because our society greatly relies on personal automobiles for its transportation needs.  Again, consult an attorney on the specifics of these rules.

Other “liquid” assets can also be maintained, so that the community spouse is not left destitute.  These guidelines change on an annual basis, so it is important to consult an attorney to make sure that you make appropriate planning decisions.

Finally, certain transfers made by the nursing home patient and the community spouse are permissible under the law.  If assets were transferred to children more than five years before the parent is admitted into a nursing home, these transfers are protected from paying for the cost of nursing care.  Likewise, even on the eve of admissions, certain transfers are permitted to set up qualified Medicaid annuities.

Contact Us for Help

The concepts I have discussed can be very complicated and far beyond the scope of this post, so anyone contemplating admission to a nursing home for themselves or their loved ones should consult with a qualified attorney to discuss these and other related issues. Please feel free to contact our Harrisburg Asset Planning Attorneys at 717-724-9821 for more information.

 

 

Copyright DZMM, October 2, 2013.

Job Loss – Myths and Reality

Harrisburg Employment Attorney Explains Myths and Realities Behind Job Loss

Harrisburg employment attorney, unemploymentIt’s Friday afternoon and you know the worst is going to happen.  Things at work have gone from bad to worse.  It appears that your employer has been “setting you up” for termination.  Your performance evaluations have been bad recently, but surprisingly over your time at the company they have been generally good.  You are very anxious because you have a family to support and bills to pay.

This post gives you some idea of your rights under Pennsylvania and Federal law at the time your job is terminated.  Please feel free to contact the Harrisurg employment law attorneys of DZMM if you need counseling about job loss or potential job loss.  It is always better to contact an attorney before you are terminated so you know your legal rights.

Myths about That Last Day at Work

If you are unable to contact an attorney before termination, here are some commonly held myths about the last day.

Severance Pay

First, many people mistakenly believe that they are entitled to severance pay at the time of termination.  While severance pay will soften the blow of the immediate income loss, it is not legally required.  Pennsylvania still uses the concept of “at will” employment.  This means that you can be terminated for a good reason, bad reason, or no reason at all.  Likewise, you can leave your employment any time you wish.  While a two-week notice is customary and helps to maintain relationships with former employers, it is not legally required.

However, what happens if you are terminated on a Friday afternoon and it is five o’clock and you are presented with a severance package?  You are told by your employer that if you don’t sign the Release forms, that you will not receive your severance.  What do you do?

This depends on your age.  If you are over forty (40) years old, you are protected by the Federal law known as the Older Worker Benefit Protection Act.  This Act ensures that older workers have at least twenty-one (21) days to review any Severance Agreement with their accountant, attorney or family members.  They are permitted to review the document before signing, so that the employer does not have an unfair advantage at employment termination.  This is the appropriate time to seek legal help to determine whether or not the Severance Agreement is fair.  The Severance Agreement will often contain a Release that will require releasing your employer from all claims related to discrimination or public policy issues related to your employment.  This means that you can no longer sue your employment for these types of issues.  For this reason, the Severance Agreement should be reviewed by an attorney to determine whether there were any possible issues outstanding.  Generally speaking, an employer cannot require that you give up unemployment or workers’ compensation claims, since they are benefits which are available to you if you fit other State law criteria.  The purpose of the Severance Agreement generally is to seek your waiver of claims, and give the employer some comfort that you will not be disparaging them or possibly suing them in the future.  The advantage to you is that you will have some compensation available to you to pay bills while you begin your job search.

 Unemployment Benefits

Another reason that you may want to consult an attorney after termination is to determine whether or not you are eligible for unemployment benefits.  This will be a subject for a further blog.  However, it is important that you consider whether to resign before you are terminated.

That letter of resignation can disqualify you from unemployment benefits.  Regardless of your age, this is an important consideration. If you “voluntarily” resign, you are not eligible for unemployment. You may be told by your employer that “it is better to resign than be fired,” but you should always consult with an attorney to determine whether or not this will disqualify you from unemployment.  In the current economy, it may take a considerable amount of time for you to become re-employed.  Unemployment benefits can help you to pay bills until you can find other suitable employment.

If you have any questions about job loss or unemployment benefits, please feel freee to contact Daley Zucker Meilton & Miner, and ask for Steven Miner.

 

 

 

Defense of Marriage Act (“DOMA”) and Estate Planning in Pennsylvania

How Does the End of DOMA Impact Pennsylvania Estate Planning?

As you may have heard, the United States Supreme Court has struck down the Federal Statute known as the Defense of Marriage Act (DOMA).  The case was interesting because it involved an estate between two lesbians that were married under New York law.  The Complaint filed by the surviving spouse, Windsor, was based on her requirement to pay Federal Estate Tax upon the death of her wife.  She and Thea Spyer had originally gotten married in Canada.  When they lived in New York their gay marriage was recognized by New York State, but not by Federal law.  Ms. Windsor challenged the Federal Statute because she felt that it was unfair that a heterosexual married couple will pay no Federal Income Tax for any transfers between spouses, but since she was subject to DOMA, she was required to pay $360,000.00 in Federal estate taxes.

She sought assistance from the Supreme Court to have this taxable claim refunded. The Court agreed with her and refunded the Windsor’s tax with interest and also struck down the Statute.

What to Remember about the end of DOMA

The important thing to take away from the Court case is that whether you are unmarried heterosexuals, or, an unmarried homosexual couple, you should look at estate planning. Currently, under Pennsylvania law, there is no provision for “gay” marriage.  This means that gay people living together are treated as unrelated people and pay higher tax rates than married people.  This is obviously unfair.  To mitigate this taxable “hit,” it is suggested that you consult with an attorney to use a variety of estate planning devices to minimize taxable transfers.  This includes both heterosexual and homosexual unmarried couples.

If you need further information about estate planning after DOMA, please feel free to contact me, Steven P. Miner, at (717) 724-9821 or sminer@dzmmlaw.com.

Answers to Bankruptcy Questions

Answers to Common Bankruptcy Questions For Individuals Considering Filing for Bankruptcy

(1) Q. Will I lose my house?

A. Generally speaking, no. Most bankruptcies involve the use of substantial exemptions provided by State and Federal law, so it is unlikely that you will lose your house, unless you do so voluntarily. For instance, you may wish to surrender your house because you can no longer afford to make the payments. But, as a general rule, if you are able to afford your mortgage you most likely will retain your property.

(2) Q. Will I lose my car?

A. Again, this question is very similar to the issue relating to your house. The maintenance of payments on secured items determines whether or not you keep secured personal property. In other words, if you can afford to make your vehicle payments, you most likely will keep your car. However, if you cannot afford your car, or, you decide that you wish to surrender the car because it is a “lemon” you may do so voluntarily.

(3) Q. Will my name be in the newspaper?

A. Usually, only business bankruptcies are printed in newspapers. Additionally, because many newspapers are going to a limited publication, the chance of public notice is even less. However, bankruptcies, like any other public record, are available for public inspection in the Federal Courthouse, and certain creditors may have access to PACER which is a subscription to access Federal records.

(4) Q. Will my boss find out about my bankruptcy?

A. The answer is similar to number three. While the bankruptcy filing is a public record, it is unlikely that your employer will be aware of your bankruptcy unless you choose to pay your Chapter 13 Plan payments through wage attachment. In other words, you can make payments with voluntary wage attachment to ensure payment in your Chapter 13. A Court Order will be necessary to make these deductions and will be sent to your payroll department. However, your employer cannot discriminate against you because you filed bankruptcy, so the voluntary wage attachment process should not have any impact on your employment.

(5) Q. Will I have to go to court?

A. Yes, you will attend a Creditors’ Meeting regardless of which Chapter of Bankruptcy that you file, Chapter 7, 13 or 11. However, the Creditors’ Meeting is an informal process presided over by a Bankruptcy Trustee, not a Bankruptcy Judge. Most of the people in attendance are also bankruptcy debtors, and your privacy will be respected.

There are occasionally creditors that attend these meetings, but they are seeking information about your case that is provided in the bankruptcy petition and schedules, so attendance from creditors is fairly limited.

(6) Q. Will I have to pay taxes on the debts that are discharged in my bankruptcy?

A. No. The good news is that debts discharged or forgiven in a bankruptcy are not subject to Federal taxation for “loan forgiveness”. This is subject to Section 108 of the Internal Revenue Code. This is one advantage that bankruptcy has over credit counseling, since debt forgiveness usually does incur tax liability.

(7) Q. Will I lose my retirement account?

A. No. The happy news is that your retirement account, whether in the form of an Individual Retirement Account, or, a 401(k) Plan or traditional pension are excluded from your bankruptcy estate. This means that you do not use bankruptcy exemptions to shelter these assets. Rather, they are not considered assets of the bankruptcy estate. This is a
good public policy, because it permits you to discharge your debt while maintaining retirement assets.

Hopefully, these answers to the FAQ’s are helpful to you. If you want more specific information, please contact my office for a free consultation.

New Pennsylvania Mortgage Programs

MORTGAGE DIVERSION PROGRAMS AND MORTGAGE MEDIATION PROGRAMS

 

Since my last blog about foreclosure remedies, I am happy to report that there are now additional programs to assist homeowners in foreclosure or nearing foreclosure.  Many counties in Pennsylvania and other states now have mortgage diversion programs.  The purpose of these programs is to permit homeowners in foreclosure, or, on the verge thereof, to apply for mortgage modification through a Court supervised process.  Because of Court supervision, and the cooperation of the parties the resulting mortgage modifications are more numerous, and involve more satisfactory results.

Basically, the procedure requires the homeowner to notice the mortgage holder to participate in the program.  At this point, a Mediator is appointed.  Based on Court rules, the homeowner is required to provide necessary documentation for review by the mortgage holder.  This process creates a standard whereby the mortgage company can be assured that they receive the documentation in a timely fashion.  Moreover, the homeowner can be satisfied that their documentation is being promptly reviewed by the lender.  Based on the strict time lines and Court supervision, the chances of success are greatly enhanced.

Based on the success of County Courts, some of the Bankruptcy Courts have also adopted the mortgage mediation process.  The process is very similar to the County Court process, but involves cases where foreclosure has been stayed by bankruptcy proceedings.  Again, the mortgage mediation process is governed by the Bankruptcy Court rules, so there is a standard by which the parties understand the process and the necessary documentation required for mortgage review.  Additionally, because of the timeline set out by the Court rules, the lender and homeowner have the same expectation of the duration of the process. Additionally, the parties can avail themselves of assistance of the Court, if necessary.  If you need more information about these programs, contact your County Bar Association in Pennsylvania, or, the Clerk’s Office in Bankruptcy Court.

Bankruptcy in Pennsylvania: Myths v. Reality

Many people have misconceptions about bankruptcy and what it means to them.  This post is devoted to dispelling some of the various myths that I have encountered from discussions with my clients.  As with all of the posts provided by my firm, this is general advice and is not intended to apply to every individual debtor.  However, these general concepts should help dispel some of the fears and myths associated with bankruptcy in Pennsylvania.

First, there is a common myth that a bankruptcy debtor must turn over all of his/her property to the Court.  This is generally not the case.  In fact, most bankruptcy debtors keep all of the property that they own at the time of bankruptcy.  The reason for this is every bankruptcy debtor is eligible to keep certain property based on exemptions provided for in the Bankruptcy Code.  Please consult an attorney for specifics, but this allows most people to keep their house, cars, bank accounts and most importantly any retirement savings.

Secondly, many people believe that filing a bankruptcy is very expensive.  To the contrary, bankruptcy attorneys often offer free consultations to discuss whether or not to file a bankruptcy and the bankruptcy fees charged by attorneys are generally reviewable by the Court or Court-appointed Trustees to make sure that they are fair and reasonable.

Thirdly, many bankruptcy debtors are concerned that if they file bankruptcy, they will never be able to obtain credit again.  Their fear is that they can no longer borrow money for an automobile or take out a mortgage for a house.  To the contrary, while the bankruptcy discharge will remain on a debtor’s credit report for up to ten years, most people will again have access to credit after their bankruptcy discharge.  This does not mean that credit will be available at market rates, but credit will be available and creditors will evaluate the interest rate based on the credit worthiness of the former bankruptcy debtor.  Obviously, a discharged bankruptcy debtor’s credit score will improve over time as the bankruptcy debtor continues to earn a living and pays his/her bills on time.

A look at the process for a Sheriff sale in Pennsylvania – what to do when you couldn’t pay your mortgage

You never thought that it would come to this, but you have now received notice of a sheriff sale.  Despite your best efforts to pay your mortgage on time, you have been unable to do so.  Perhaps it has been the loss of a spouse, a recent divorce or a substantial period of unemployment,  but you have been unable to meet your mortgage obligations and you need help.

You have received notices from your mortgage company and have received a complaint in mortgage foreclosure.  Despite your best efforts and these warnings, you have not been able to resolve issues related to the sheriff sale.  What do you do now?

First, carefully review the notice materials you receive since they give you important information about organizations that can assist you.  The Pennsylvania Housing Finance Agency is one such organization that may lend you money, so that you can pay your mortgage arrears and become current on your mortgage over time.  In effect, the finance agency becomes an additional mortgagee on your real estate, so you will need to pay this loan back.  However, it will stop the sheriff sale and allow you to catch up the arrearage on your first mortgage over time and save your home.

Additionally, since the arrearages will be paid overtime, you can concentrate on making the current payments on your mortgage when they are due.  If this fails, it is very important to seek legal help.

Another way to stop a sheriff sale is to file a bankruptcy.  Bankruptcy filings are complicated and there are certain limitations on the ability of certain filers to file a bankruptcy.  You need to consult with an attorney to discuss your particular issues.

Many bankruptcy attorneys will offer a free consultation.  At the consultation, the bankruptcy attorney can determine whether or not a bankruptcy will work for you.  If it is the chosen course of action, the bankruptcy filing acts as an automatic stay.  This means that the bankruptcy court order entered at the time you file a bankruptcy will stop the sheriff sale.  This does not mean that you will not need to pay the mortgage arrears, but rather you will have additional time to do so.

The bankruptcy stay returns you and your mortgage lender to the status quo that existed before the sheriff sale was scheduled.  In other words, it stops the sale, and the sheriff sale is postponed or stopped altogether.  The additional time also allows you to work with your bankruptcy attorney to see if you have sufficient income to pay your mortgage arrearage through a Chapter 13 bankruptcy plan.  You may also be able to sell your property through a Chapter 13 plan, if you believe there is equity in the property and you feel that you can no longer afford your current property.

If you discover that your mortgage balance with arrears exceeds the value of your house, you may be able to surrender your house to the mortgage lender with no further obligation to your  mortgage lender.

A sheriff sale need not result in the loss of your house, if you act promptly to protect your legal rights.  If the sheriff’s gavel falls, it is too late to do anything, so seek legal help as soon as possible.

How do Property Owners Contest a Lien? How can a Municipality Initiate Action?

By Steven Miner

For an explanation of scire facias see this post.

Property Owner Contests Amount of Lien and Property Owner Initiates Action

If the property owner challenges the municipal lien, the property owner may file a notice to issue writ of scire facias.  In response, a municipality must file a writ of scire facias within 15 days after the notice is filed.   If the municipality does not issue the writ, upon motion, the lien is stricken by the court.   If the municipality issues the writ, the case proceeds as detailed below.

Property Owner Contests Amount of Lien or Municipality Initiates Action

The municipality may pursue the writ without being prompted the property owner by filing a writ of scire facias with the Prothonotary in the Court of Common Pleas where the property is located.  As I previously mentioned, the process detailed below is identical to the process where the property owner initiates the action except that in this type of case the municipality has a time limit.  The writ may name any individual that has an interest in the property.  The sheriff must serve the writ by hand delivering the writ to any adult found on the property.  If the sheriff finds anyone in possession of the property, the sheriff may also add that adult to the writ.  If no one is found on the property, the sheriff may post the writ on the public part of the subject property.

Once the writ of scire facias is served, the owner may, in response file an affidavit of defense wherein he raises all defenses that he has to the municipal claim.  The lien acts as prima facie evidence of a valid claim and acts as conclusive evidence of the facts set out in the writ, except where those facts are specifically denied by the Defendant.  If the defendant fails to file an affidavit of defense, the Plaintiff municipality may file for default judgment.

Once the writ is issued and the affidavit of defense is filed, the case proceeds like any other standard civil case.  For example, preliminary objections, motions for summary judgment, and motions for judgment on the pleadings are all proper in writ of scire facias proceedings.   If necessary, a jury trial can be held.

How can municipalities collect on liens from landowners?

What is scire facias?
By Steven Miner

In today’s tough economic climate, cities, townships, and boroughs alike are cash strapped. More and more municipalities are filing for, or at least strongly considering Act 47 protection.  Facing a $3 million deficit, Middletown Borough has made recent headlines with the possibility of filing for Act 47 protection.  Since 1987 when Act 47 was adopted, 27 municipalities have applied for Act 147 protection.  While the reasons for filing Act 47 are numerous, one of the reasons is that municipalities are struggling to collect on their municipal liens.  For example, in 2010, Palmyra Borough had over 500 municipal liens with the top 10 ranging from $145,000 to $109,000.  The problem is not just in Pennsylvania—according to the National Conference of State Legislatures, nationwide, states had a combined $510.5 billion deficit in 2011.    However, despite the gloom and doom, municipalities do have an option of collecting past debts—the writ of scire facias.

Under the “Municipal Claims and Tax Liens Act” claims for water rents or rates, lighting rates, power rates and sewer rates may be filed in the court of common pleas of the county in which the property is located.  The claims must be filed within three (3) years.  In the case of municipal improvements, the claim must be filed within six (6) months of when the improvement was finalized.  Municipalities do this on regular basis and this part is rather simple. (On a side note for the purpose of this post the terms “lien” and “claim” are synonymous.)

The problem becomes what happens once the lien is filed?  When a property owner disputes a purported lien filed the Act does not provide a mechanism by which to dispute the claim or if the property owner simply decides to do nothing.  There are 3 methods by which to handle the lien:  1)  Both landowner and municipality can do nothing; 2) the landowner can challenge the amount of the lien; and 3) the municipality can execute on the lien.

First both the landowner and the municipality can do nothing in which case as a practical matter, the lien continues forever until the property deed is transferred because although the lien continues for 20 years, the lien can easily be revived.  While this option may be enticing because the lien will most often continue to accrue interest, this option does nothing to help municipalities that are presently cash strapped.  This brings me to the final two options—challenge the amount of the lien or execute on the lien through a writ of scire facias proceeding.

The writ of scire facias (“scire facias”) provides a mechanism by which a municipality can obtain money from past judgments.  More specifically, a scire facias proceeding is one in which a lien holder, such as a municipality obtains a judgment against the property itself, (an “in rem” proceeding—as opposed to against the person, an “in personam” proceeding).  The writ of scire facias serves 3 goals—1) first to ascertain the amount of the lien due; 2) second to allow the Defendant landowner the opportunity to dispute the amount of the lien; and 3) to allow the municipality to collect on the judgment.

For information about the process see the next post.