Tooele Utah Bankruptcy Lawyer

Bankruptcy Lawyer Tooele Utah

If you are overburdened with debt and you can unable to pay your creditors, contact an experienced Tooele Utah bankruptcy lawyer. The lawyer can review you circumstances and explain your options. There are other ways to deal with debts. However, they may not be suitable for all. The perfect option for you will depend on your circumstances. Sometimes it may be a better option to file for bankruptcy.

Debt consolidation is one of the most popular alternatives to bankruptcy when it comes to reducing personal debt in America. However, it is not without its own balance of benefits and drawbacks. Weighing these can help a person decide whether this avenue would be a good fit for their situation. Oftentimes, consumers find that bankruptcy may be a better option. If you are considering debt consolidation as an alternative to bankruptcy, speak to an experienced Tooele Utah bankruptcy lawyer.

First and foremost, it’s important to know that debt consolidation involves taking out a loan to pay down the rest of your outstanding debts. These loans are easier to get than other types of loans and are exclusively to be used for this purpose. However, the fact that it is a loan at all can be a deterrent or an intimidating factor for some people already struggling with mountains of debt. Never assume a debt consolidation to be an automatic and viable alternative to bankruptcy filing. Sometimes a bankruptcy filing may be a better option.

Here are a few other important facts to consider when thinking about debt consolidation:

• Debt consolidation creates a single, monthly payment, rather than multiple payments to multiple creditors that consumers may currently be facing.

• These single payments may be significantly lower than the sum of payments they are currently paying – or they may be roughly the same.

• To get a lower interest rate and lower monthly payments, you will typically have to “secure” your loan.

• Securing the loan involves putting up collateral, which may include property or other valuables.

• If you fail to complete payments in a timely manner, you may risk losing these valuables.

• Consolidation also does not protect the consumer from default lawsuits, which can leave them vulnerable during their debt relief efforts.

Perhaps one of the largest drawbacks of choosing debt consolidation over bankruptcy or other methods is that it loses its appeal very quickly.
While heavy marketing and media popularity make it seem very appealing at the start, consumers often find that strict payment schedules and long, arduous journeys to a debt-free state make this method more difficult to navigate than they originally anticipated.

As the risks can become very high with this type of debt relief, it is important to weigh this option carefully under the advice of an experienced Tooele Utah bankruptcy lawyer.

For those who aren’t interested in the idea of taking on new debt or taking out a new loan, debt management programs or debt settlement can be solid choices. Here’s what you need to know about these approaches to debt relief:

Debt management programs are set up and run by credit counselors.

• They work with your creditors to reduce your payments and may even be able to lessen the amount of debt you have overall.

• Even if your overall debt cannot be reduced, your interest rates, late fees, and other associated expenses often are dramatically reduced or completely eliminated with this approach.

• This method does report on your credit ratings, as does any other debt relief program. However, it is removed as soon as you finish the program, whereas bankruptcy and other options will remain on your record for years to come even after you have paid down all debt.

• Debt management payment schedules are exceedingly strict; a single missed payment can result in termination from the program and requirement to repay fees and other associated cost.

• Debt settlement companies may promise to reduce your overall debt by over 50%.

• The process can take three to four years or more, depending on a variety of factors.

• There is no promise of effectiveness.

Credit card companies do not have to work with these agencies and there is little recourse for consumers if they choose not to.

As you’re exploring your options, you may notice that bankruptcy is regarded as a more dramatic option than most others.

Why is this?

As you’ll learn, it has a lot to do with what happens during bankruptcy – and afterward. There are also many misconceptions about bankruptcy, which can be put to rest by speaking with an experienced bankruptcy attorney.
Some important facts to know about bankruptcy include:

Bankruptcy does not wipe out all of your debt instantly.

• It does freeze your debt, though, meaning creditors can no longer contact you about it. This is called an automatic stay.

• How much of your debt is released by filing for bankruptcy depends on which type of bankruptcy you file for.

• The type of bankruptcy you file will also depend on whether you are filing as an individual, business, etc.

• This doesn’t mean your debt won’t be repaid; the point of your bankruptcy is to negotiate a plan to address your debt, not to simply abandon it.

Chapter 7 bankruptcy involves liquidation of assets in order to pay off as much of your debt as possible.

• The rest of your debts may be negotiated down or released, depending on your situation.

Chapter 13 bankruptcy involves paying down your renegotiated debt over the course of three-five years and typically does not involve liquidation.

• Both chapter 7 and chapter 13 are used for personal bankruptcy and may or may not involve exemptions when it comes to property, valuables, income, etc.

Chapter 11 bankruptcy is typically reserved for businesses and is very similar to chapter 13.

• A business may choose to carry on everyday operations as normal during these bankruptcies, or may have to downsize significantly or even close due to the situation.

Bankruptcy payments boast an advantage over those of consolidation or other debt relief methods in that they are typically easier to meet financially. This is because they are customized based on what is actually available to a person from their income and assets, so they are more likely to continue making payment successfully during bankruptcy than during a consolidation.
One thing many people do not know about bankruptcy is that you can begin repairing and rebuilding your credit right away during a bankruptcy.

Other options – such as consolidation – do not allow you to work on your credit during the debt relief process. This means that you’re stuck handling one step of the process at a time, making it much longer than it may advertised to you as. While it may take multiple years for a bankruptcy to be worked through, you’re doing just that – working throughout the length of it – to rebuild your financial life as you go.

It’s important to remember that while paying down debt is a practical process and should be regarded as such, it can also be a very emotional journey for many people.

When you’re looking to pay down debt, it’s usually in preparation for a major change in your life or to move on from something that has caused damage in the past.

When emotion is involved, it’s easier to make irrational decisions, so taking your time and following the advice of an experienced Tooele Utah bankruptcy lawyer throughout your debt free journey is critical for achieving success.

To keep the balance of practical accomplishment and emotions in check during your debt-free journey, consider prioritizing your debt pay-down to give the most gratifying results, rather than simply the most practical.

What does this mean?

Here are a few examples:

• If you have two $500 debts to pay down or a single $1000 debts to pay down, you may choose to pay down the two $500 debts first in order to feel more accomplished emotionally.

• While debts with higher interest rates should typically be paid down first, debts in smaller amounts can be paid down quickly and give consumers a feeling of accomplishment right away, keeping them motivated to continue their journey.

These types of changes to your debt pay-down plan should only be made with the advice of your financial professional, of course.

However, working together with your experienced Tooele Utah bankruptcy lawyer will give you the chance to voice your own opinions and concerns and do what feels most motivating for you.

At the end of the day, whatever is getting you to that endpoint in your debt-free journey is the best choice.

Knowing your options along the way will simply help you make the smartest choices throughout the path to get there.

Bankruptcy is a legal process intended to give honest debtors a fresh financial start by discharging their debts. When a debtor files for bankruptcy an automatic stay comes into operation preventing creditors from contacting the debtor or taking steps to collect the debt. If the creditor has initiated legal proceedings to recover the debt, the legal proceedings will be automatically stayed when the debtor files for bankruptcy. Consult with an experienced Tooele Utah bankruptcy lawyer if you want to file for bankruptcy.

To be eligible, your unsecured and secured debts must be less than certain dollar amount. This dollar amount is adjusted each year by law. If you want to file for bankruptcy protection under Chapter 13 of the bankruptcy code, consult with an experienced bankruptcy attorney. The attorney can advise you on your eligibility for filing under Chapter 13. If you have a source of income, you should consider filing under Chapter 13 whereas if you do not have a source of income, you should file for bankruptcy protection under Chapter 7.

In a Chapter 7 bankruptcy proceeding, a court appointed trustee will take over the individual’s assets and sell the assets to pay off the creditors. However, the trustee will not take over all the assets of the individual. Federal and state laws provide certain exemptions. Assets that are exempt under Federal and state laws continue to remain in possession of the individual. After all the non-exempt assets are sold by the trustee, the individual will receive a discharge. Chapter 7 bankruptcy is also called liquidation proceedings. If you wish to retain your assets, speak to an experienced Tooele Utah bankruptcy lawyer. The lawyer will advise you on the best course of action. You may not automatically qualify for a Chapter 13 bankruptcy proceedings in Utah.

The Bankruptcy Code has a provision for lien stripping. Liens can be stripped off of the debtor’s assets in when there is not enough equity in the asset, after deducting senior liens from the property’s current market value, to secure the unsecured in whole or in part, where the lien exceeds the value of the debtor’s property.

Lien stripping means reducing a secured claim to the value of the underlying collateral. The lien is bifurcated into secured and unsecured. If you want to use bankruptcy to strip a lien, contact an experienced Tooele Utah bankruptcy lawyer. You can legally strip a lien in bankruptcy. The secured lien is allowed in the amount up to the fair market value of the property at the time of the stripping. The balance of the lien, which exceeds the fair market value of the property, is now deemed unsecured. Speak to an experienced Tooele Utah bankruptcy lawyer to know how you can strip liens in bankruptcy.

Utah Bankruptcy is complex. Seek an appointment with an experienced Tooele Utah bankruptcy lawyer. An experienced Tooele Utah bankruptcy lawyer can explain your options. You may have other options available. Consider these options. If these options are unworkable for you, then bankruptcy may be your only option.

Don’t try to navigate the complex maze of Utah bankruptcy laws by yourself. Always hire an experienced Tooele Utah bankruptcy lawyer. In an attempt to save attorney fees, you may end up getting your bankruptcy petition thrown out without any of your debts getting discharged. An experienced Tooele Utah bankruptcy lawyer is your best friend when you are filing for bankruptcy protection.

Bankruptcy Attorney Free Consultation

When you need to stop a garnishment, stop a foreclosure, stop a repossession of a car, protect your wages, protect your assets, protect your home and your family, please call Ascent Law LLC (801) 676-5506 for your Free Consultation. We can help you. We file chapter 7 bankruptcy, chapter 13 bankruptcy, chapter 9 bankruptcy, chapter 11 bankruptcy and chapter 12 bankruptcies for those who need relief.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

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Bankruptcy Lawyer Tooele Utah

Bankruptcy Lawyer Tooele Utah

A troubled business may be burdened with a collective-bargaining agreement. Such an agreement may substantially affect the value of the enterprise. Under the Bankruptcy Code, a Chapter 11 debtor may seek court approval to reject a collective bargaining agreement. If you need a consumer bankruptcy such as a chapter 7, chapter 13 or even a chapter 12, please call Ascent Law for your free consultation.

A union is allowed to file a general unsecured bankruptcy claim for its members’ lost wages stemming from rejection of the collective bargaining agreement. Lost wages are recoverable as damages stemming from rejection of an executory contract and are not limited to the one-year period following the petition date. The union is allowed to deduct compulsory dues from the damages payable to individual employee claimants. An experienced Tooele Utah bankruptcy lawyer can help employees when their employer has filed for bankruptcy.

If the estate assets include a subsidiary that is a party to a collective bargaining agreement, the liquidator may be forced to file a Chapter 11 bankruptcy petition for the subsidiary in order to modify the agreement, thereby facilitating the sale. However, the union’s claim may substantially affect the parent companies residual equity value in the subsidiary.

Defined Benefit Plans

Large firms going through liquidations frequently must deal with defined benefit pension plans that, when times were better, were set up to provide predetermined and calculable retirement benefits to employees. As the debtor proceeds toward liquidation, it must continue to manage its pension plan, but with a new objective—to dispose of the plan through termination or sale. Typically, a debtor that establishes a defined benefit plan also serves as the plan’s sponsor. Members of its management team often serve as the committee that decides ongoing plan matters, such as investing and benefit changes. In addition, the plan administrator, who serves the primary fiduciary role for the plan and manages its day-to-day activities, also is typically a member of the sponsor’s management team. Within this incestuous set-up, huge problems arise when a firm must be liquidated. Defined benefit pension plans maintain investment assets separate from an employer’s assets in order to fund the benefit payments to current and future retirees. Accordingly, an employer has several responsibilities as a fiduciary. In particular, an employer must ensure that its actions and those of the pension plan comply with various federal laws that govern retirement plans, especially the Employee Retirement Income and Security Act of 1974 (ERISA). Responsibility for administering a plan is likely to be thrust upon the liquidator after a company files bankruptcy. In dealing with a liquidating company’s defined benefit pension plan, the plan administrator needs to achieve each of the following objectives:

• Manage and dispose of the plan in a way that minimizes the cost or maximizes the recovery to the debtor.

• Reach closure in a timely fashion while avoiding any subsequent exposure for the debtor and its manager.

• Ensure that the interests of the plan’s participants are addressed appropriately.

Although these objectives are not mutually exclusive, conflicts sometimes arise among them. For example, looking after the interests of the participants by enhancing their benefits could reduce a plan’s monetary surplus or increase its deficit to the detriment of the debtor. Accordingly, a plan administrator must take care to ensure that the interests of both the participants and the debtor are addressed properly.

Interim Management
The administrator of a debtor’s pension plan is responsible for managing the plan as long as the debtor remains the plan sponsor. This typically involves determining eligibility for benefits; paying benefits to current retirees; advising participants or beneficiaries of their rights under the plan; directing investment policies; paying plan expenses; preparing necessary reports for participants; and maintaining plan compliance with ERISA, the Internal Revenue Code, and other relevant laws.

Defined Contribution Plans

Defined-contribution pension plans are typically much easier for a liquidator to terminate than defined-benefit plans. First, the plan document is reviewed to see if it needs to be amended to comply with current law or to correct any obvious disqualifying defects. If necessary, amendments or corrective action should be taken. The bankruptcy trustee then files a motion for authority to (i) amend, if necessary, and terminate the plan; (ii) fully vest all plan participants in any unvested account balances; (iii) take any necessary action to maintain tax qualification of the plan upon termination; and (iv) distribute the assets. If the termination occurs outside of bankruptcy, the governing body (i.e., board of directors, managers, receiver, etc.) passes a resolution authorizing the same. The liquidator should (but is not required to) submit the plan to the IRS for a determination that the plan is qualified upon termination.
Employees who have left the company are entitled to immediate distribution prior to plan termination and prior to receipt of any determination letter from the IRS. They are provided with a distribution notice and may elect a direct rollover, taxable distribution, or deferral of distribution. Until the plan is terminated (and IRS letter received in most cases), the liquidator cannot require them to take a distribution, but they may elect to take a distribution. The liquidator should attempt to distribute as many voluntary distributions as possible prior to termination.

Any employees who remain employed through the liquidation and any former employees who do not elect to take a distribution prior to termination must wait until the plan is terminated before they receive a distribution. If a participant does not return a distribution form, the plan administrator is required to set up an individual retirement account (IRA) for the participant and roll the benefits into the IRA. Other than the distribution tax notice, no notice to participants or anyone else is required.
Sometime down the road, the IRS will issue a determination letter on the plan. The liquidator may, but is not required, to wait for the determination letter before distributing the assets. The reasonable administrative expenses of plan termination and winding up can be charged to the plan accounts before distribution, if necessary. The preferred method is to obtain the creditors’ approval to allow the company to pay the expenses.

Problems occur when the plan trustee or plan administrator has abandoned the plan. The custodian of the assets usually will not release the funds without direction from the plan trustee. In that situation, typically the bankruptcy trustee assumes the responsibilities of trustee of the plan. Once all assets are distributed to participants or rolled into IRAs, the plan trustee can resign, assuming he or she hasn’t already disappeared from the scene.

When the debtor has not made the requisite contributions, the PBGC normally asserts a claim to recover these amounts. This claim has priority status. Members of the board of directors and other key executives may have personal liability.

401(K) Plans

In the course of business operations, a company frequently establishes and maintains a 401(k) plan, a retirement plan qualified under Section 401(a) of ERISA, for the benefit of its employees. The debtors’ employees who satisfied certain age and service requirements are given the opportunity to participate in the plan. As a result, at the time of bankruptcy, current and former employees of the debtor are entitled to their plan account balances.

In a liquidation, the 401(k) plan is typically no longer a necessary or meaningful component of the debtors’ operations or bankruptcy estate. As long as the plan remains in effect, the debtor will continue to incur expenses for ongoing administration and will incur legal expenses as the plan is amended to comply with changes in the law. Under ERISA, these expenses can only be paid by the debtor or from the assets of the Plan. These expenses become completely unnecessary and of no benefit to anyone, since the participants are able to continue to receive the tax benefits provided under the 401(k) plan by transferring their assets to an IRA or to a plan maintained by a new employer. Accordingly, as part of the ongoing resolution of the debtors’ affairs, the liquidator should file a motion with the court for authority to terminate the 401(k) plan and make appropriate distributions to the participants.

After the plan’s termination, each remaining participant receives a distribution equal to the amount held in his or her account after the payment of allocable costs and expenses incurred by the termination. Individual participants may elect either to have their amounts taxed currently or defer taxation by transferring the amount distributed to an IRA or a plan maintained by a new employer. The sooner the liquidator takes the necessary action to terminate the 401(K) plan, the better.

Deferred Compensation Plans

A deferred compensation plan (deferred comp plan) typically allows a highly paid executive to defer a portion of his or her annual compensation until retirement. In order to avoid income tax on this compensation in the current year, the obligation must be an unsecured contractual obligation of the employer/ company. These are not Keogh, 401(k), or other qualified plans. Upon bankruptcy, these executives become unsecured creditors of the estate with respect to their deferred compensation claims, and any plan assets become property of the estate. These plans are often called “rabbi trusts,” because the first such plan was created as part of financial planning for a rabbi.

Post-retirement Health Benefits

A Chapter 11 trustee or debtor-in-possession must pay retiree benefits as an administrative expense of the bankruptcy estate. Retiree benefits are limited to health care, accident, disability, and death benefits, and do not apply to give priority to claims by trust funds that administer only pension benefits for retired workers. Likewise, premium payments for retiree health benefits are entitled to priority status as an administrative expense. Premiums are due annually, and the employer is required to pay a full year of premiums, even though it has plans to cease doing business shortly after the premium due date.

A bankruptcy procedure, separate but similar to the rejection of collective bargaining agreements, is used in evaluating whether the requirements for termination or modification of retiree health benefits have been met. Unless the benefit plan is modified, the employer must continue retiree benefits. These procedures require that prior to seeking modification of retiree benefits, the employer must bargain with a representative of the retirees, either the union or a separate retiree committee. If bargaining is not successful, the employer can then seek modification of retiree benefits.

Workers’ Compensation Insurance

Utah law require that a company either have workers’ compensation for its employees or have a bond on file with the state to satisfy any obligations that may arise under the policies. Premiums are typically based on the experience rating of a company’s workforce. The lower the incident of injury, the lower the workers’ compensation rates. Operating without workers’ compensation insurance is illegal.

Employee issues frequently arise in large liquidations. In some cases, the liquidator needs to retain existing employees in order to maintain its subsidiaries’ viability long enough to sell the operating businesses for the best prices. In other cases, the need may be to downsize by laying off employees and closing plants. Special incentives may be needed to entice key employees to stay. Incentives should not, however, be so large that they create problems with other employees who are asked to stay and make financial sacrifices. Particular care is required in implementing plant closings and mass layoffs. The WARN Act may impose substantial penalties on a firm that terminates large numbers of employees without adequate notice. The liquidator should proceed with due care and caution.

Terminating pension and other employee benefit plans is complex. If the plan is solvent, the surplus (after paying required taxes) represents a potential recovery for the estate and its creditors. If the plan is insolvent, the deficit represents another source of claims. In either case, the sale or termination of the debtor’s various qualified and nonqualified benefit plans requires a number of carefully executed steps to satisfy the requirements of the IRS, PBGC, and other interested parties and to maximize residual values for the estate.

If you are an employee in Tooele and your employer, a large corporation has filed for bankruptcy, consult an experienced Tooele Utah bankruptcy lawyer.

Tooele Utah Bankruptcy Attorney Free Consultation

If you have a bankruptcy question, or need to file a bankruptcy case, call Ascent Law now at (801) 676-5506 for your Free Consultation. We want to help you.

Michael R. Anderson, JD

Ascent Law LLC
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States

Telephone: (801) 676-5506

Ascent Law LLC

4.9 stars – based on 67 reviews

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