Fong Law Group

Can I Sue Someone Who Has Filed for Bankruptcy?

You can register a lawsuit if someone breaks a deal or harms you in a certain way, and you want money to compensate you for your loss. However, if the person you like to sue declares bankruptcy, you may be out of luck. The sort of problem and the time of the incident will determine whether you can file a lawsuit.

Suing Someone Who Claims Bankruptcy

The automatic stay imposed by bankruptcy prevents most lawsuits from being filed after the bankruptcy is lodged. Private loans, credit card bills, hospital expenses, utility bills, and accidental injury claims are all examples of loans for which you can't file a lawsuit.

There are some circumstances in which a lawsuit can survive. For example, declaring bankruptcy will not prevent a criminal case from proceeding. The lawsuit of bankruptcy has no bearing on divorce or custody hearings. If the user declaring bankruptcy was intoxicated at the time of accident or injury, the legal case against them can be continued. In addition, lawsuits arising from debts incurred after a bankruptcy filing may be pursued. You can file a case against the borrower if they cause accidents one month after declaring bankruptcy and harm the car.

The court's verdict on whether or not to grant the request is contingent on the facts. After the court announces an automatic stay, lenders can sometimes acquire a debt.

Even after a judge announces an automatic stay, the borrower may be required to pay the debt. The creditor, except for fraud cases, can get an exemption. The creditor must show that the automatic stay is detrimental to their legitimate dispute, legal agreements, or property. You can visit Fong Law Firm if you are residing near Monterey Park California and surrounding areas.

Cases When a Bankruptcy Filing Will Not Discharge

Can you collect money from someone in the following situations?

Fraud: If the debtor committed fraud and incurred debt, the debt cannot be dismissed by declaring bankruptcy.

Personal Injury Situations: If the borrower was driving under the influence and caused the accident, bankruptcy will not be able to discharge the mortgage. This sort of lawsuit can be filed in a bankruptcy trial to decide whether the offender was intoxicated.

Debt After Bankruptcy: This debt cannot be discharged if the borrower applied for a mortgage within 3 months of declaring bankruptcy and failed to repay it.

Bankruptcy and Suing Someone

A complaint will be lodged on you if the mortgage is non-dischargeable and the lender is permitted to sue. This is a printed document that explains why a lender or other party suing you must be allowed a bankruptcy proceeding exemption.

The document is delivered to the address listed on the bankruptcy complaint. A summons will be served on you, detailing how soon you must react to the concerns and whether you must attend court. The bankruptcy court judge can issue the state lawsuit to be transferred to federal court after it is filed.

The sort of case or how much the lawsuit has advanced will determine whether the court commands the case to be moved.

Call Fong Law Group at (626) 289-8299 for a FREE consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.

Transferring Assets to Qualify for Medicaid

Transferring assets to qualify for Medicaid can make you ineligible for benefits for a period of time. Before making any transfers, you need to be aware of the consequences. 

Congress has established a period of ineligibility for Medicaid for those who transfer assets. The so-called "look-back" period for all transfers is 60 months, which means state Medicaid officials look at transfers made within the 60 months prior to the Medicaid application. 

While the look-back period determines what transfers will be penalized, the length of the penalty depends on the amount transferred. The penalty period is determined by dividing the amount transferred by the average monthly cost of nursing home care in the state. For instance, if the nursing home resident transferred $100,000 in a state where the average monthly cost of care was $5,000, the penalty period would be 20 months ($100,000/$5,000 = 20). The 20-month period will not begin until (1) the transferor has moved to a nursing home, (2) he has spent down to the asset limit for Medicaid eligibility, (3) has applied for Medicaid coverage, and (4) has been approved for coverage but for the transfer. Therefore, if an individual transfers $100,000 on April 1, 2017, moves to a nursing home on April 1, 2018 and spends down to Medicaid eligibility on April 1, 2019, that is when the 20-month penalty period will begin, and it will not end until December 1, 2020.

Transfers should be made carefully, with an understanding of all the consequences. People who make transfers must be careful not to apply for Medicaid before the five-year look-back period elapses without first consulting with an elder law attorney. This is because the penalty could ultimately extend even longer than five years, depending on the size of the transfer.

Be very, very careful before making transfers. Any transfer strategy must take into account the nursing home resident's income and all of his or her expenses, including the cost of the nursing home. Bear in mind that if you give money to your children, it belongs to them and you should not rely on them to hold the money for your benefit. However well-intentioned they may be, your children could lose the funds due to bankruptcy, divorce, or lawsuit. Any of these occurrences would jeopardize the savings you spent a lifetime accumulating. Do not give away your savings unless you are ready for these risks.

In addition, be aware that the fact that your children are holding your funds in their names could jeopardize your grandchildren's eligibility for financial aid in college. Transfers can also have bad tax consequences for your children. This is especially true of assets that have appreciated in value, such as real estate and stocks. If you give these to your children, they will not get the tax advantages they would get if they were to receive them through your estate. The result is that when they sell the property they will have to pay a much higher tax on capital gains than they would have if they had inherited it.

As a rule, never transfer assets for Medicaid planning unless you keep enough funds in your name to (1) pay for any care needs you may have during the resulting period of ineligibility for Medicaid and (2) feel comfortable and have sufficient resources to maintain your present lifestyle.

Remember: You do not have to save your estate for your children. The bumper sticker that reads "I'm spending my children's inheritance" is a perfectly appropriate approach to estate and Medicaid planning.

Even though a nursing home resident may receive Medicaid while owning a home, if the resident is married he or she should transfer the home to the community spouse (assuming the nursing home resident is both willing and competent). This gives the community spouse control over the asset and allows the spouse to sell it after the nursing home spouse becomes eligible for Medicaid. In addition, the community spouse should change his or her will to bypass the nursing home spouse. Otherwise, at the community spouse's death, the home and other assets of the community spouse will go to the nursing home spouse and have to be spent down.

Permitted transfers

While most transfers are penalized with a period of Medicaid ineligibility of up to five years, certain transfers are exempt from this penalty. Even after entering a nursing home, you may transfer any asset to the following individuals without having to wait out a period of Medicaid ineligibility:

• Your spouse (but this may not help you become eligible since the same limit on both spouse's assets will apply)
• A trust for the sole benefit of your child who is blind or permanently disabled.
• Into trust for the sole benefit of anyone under age 65 and permanently disabled.

In addition, you may transfer your home to the following individuals (as well as to those listed above):

• A child who is under age 21
• A child who is blind or disabled (the house does not have to be in a trust)
• A sibling who has lived in the home during the year preceding the applicant's institutionalization and who already holds an equity interest in the home

A "caretaker child," who is defined as a child of the applicant who lived in the house for at least two years prior to the applicant's institutionalization and who during that period provided care that allowed the applicant to avoid a nursing home stay.

Caregivers Are Getting Younger, Making Planning for Long-Term Care Even More Important

As baby boomers age, more and more millennials are becoming caregivers. Many are taking on this role while just getting started in their own lives, leading to difficult decisions about priorities. Proper planning can help them navigate this terrain. 

The term “sandwich generation” was coined to refer to baby boomers who were taking care of their parents while also having young children of their own. Now millennials are moving into the sandwich generation at a younger age than their parents did. According to a study by the AARP, one in four family caregivers is part of the millennial generation (generally defined as being born between 1980 and 1996). And a study by Genworth found that the average age of caregivers in 2018 was 47, down from 53 in 2010. Gretchen Alkema, vice president of policy and communications at the SCAN Foundation, told the New York Times that the rise in younger caregivers may be because baby boomers had kids later in life than their predecessors and many are divorced, so they do not have a spouse to provide care. 

Younger caregivers have different challenges than older caregivers. They may have younger kids to manage and careers that are just beginning, rather than established. In addition, more millennial men are caregivers compared to previous generations. The AARP study found that millennials spend an average of 21 hours a week on caregiving, and one in four spend more than 20 hours per week. More than half (53 percent) also hold a full-time job in addition to their caregiving duties and 31 percent work part time. Younger caregivers are also less likely to discuss their caregiving duties with their employer than previous generations.

Managing caregiving duties, family, and employment is stressful. Having plans in place can help alleviate some of the stress, and the earlier you plan ahead the better. The following are resources you can use to put together a long-term care plan: 

• Long-term care insurance can help lessen some of the costs of caregiving if it is purchased early enough. 
• A geriatric care manager can help determine what care is needed and where to find resources. 
• An elder law attorney can draft essential documents like a power of attorney and a health care proxy, as well as advise you on available benefits, such as Medicare, Medicaid, or Veteran’s Administration benefits. 
• Adult day care can give caregivers a much-needed break. 

Having resources in place will help, but you also need to be mindful of when you need help. Recognize when you are being stretched too thin and consider your priorities. If possible, talk to your employer about flexible hours. Consult with other family members and do not be afraid to delegate tasks. Take care of yourself by eating well, exercising, and finding time to relax. For some tips on handling the caregiver/life balance, click here.

For an article on the unique caregiving challenges facing the women of Generation X, click here.

Divorced Women and a Financially Secure Retirement

“For women in particular, divorce is financially perilous—at least, that’s what nearly all the studies tell us.”

This article from Money, “This is The Single Best Way Divorced Women Can Secure a Successful Retirement,” begins by noting the frequently referenced “divorce gap.” This was documented in 2008 by a professor at the University of Essex, who found that women who divorce see their income fall by more than a fifth, while the men they divorced see their household income rise by about a third. A more recent study offers more nuanced scenarios, with a more positive outlook.

A more recent study from the Center for Retirement Research in Boston College found that formerly married, but now divorced women historically are better off than single, never married women because of the assets they have accumulated before divorce. The biggest difference comes from one asset—home ownership—because divorced women are more likely to own a home than singles.

However, home ownership is a double-edged sword, say many divorce lawyers and financial advisors, who find the new data both interesting and unsettling. They say that keeping the house isn’t always the best move. Many newly-single women find they don’t have the resources to keep up with mortgage payments, maintain the property, pay taxes and deal with an unexpected crises.

One advisor says she’s concerned that these new numbers will lead to women who can’t necessarily afford to maintain a home to hang on to their homes.

 However, a researcher involved in the study maintains that while the study mentions homeownership, there’s a bigger point being made. Married women who divorce benefit from receiving a share of marital assets. Single, never-married women do not and must rely solely on themselves for saving and accumulating assets that can be used to finance their retirement.

A critical fact that women who are divorced must do: whatever assets they get in the divorce settlement, commit to keeping those assets intact for retirement. It’s easier to do this with a house. However, it’s tempting to dip into assets that are intended for retirement.

Being house-rich but cash poor is no way to prepare for retirement. Focus on the longer term—if you don’t see yourself living in the house for 10, 20 or 30 years, be realistic. If you think you might want to sell, sell while the market is good. Don’t wait until you’re tapping retirement funds for home maintenance.

Reference: Money (Aug. 10, 2018) “This is The Single Best Way Divorced Women Can Secure a Successful Retirement”

The Impact of Divorce on Retirement 離婚對退休的影響 (中英對照)

“When all is said and done, ending a marriage can be almost as destructive to your retirement savings as the Great Recession was, according to new findings from the Center for Retirement Research at Boston College.”

It is almost impossible to end a marriage and to leave retirement savings intact. Between the cost of legal fees and the division of assets and households with one income instead of two, the cost of divorce is high. As CNBC reports in “This move is almost as bad for your retirement savings as the Great Recession was,” divorce puts people’s retirements at risk and some folks have to work many more years as a result.

 Current statistics show that approximately 40% of all marriages end in divorce. Researchers at Boston College behind the National Retirement Risk Index examined how likely individuals are to maintain their standard of living, once they retire. As of 2016, half of working-age households were reported to be at risk. Divorce pushes up a retirement risk for a person by 7 percentage points, while the 2008 financial crisis added 9 points.

Here are more reasons why divorce deals a tough blow to retirement:

• In addition to legal fees, divorce proceedings pull people away from work and can have an impact on their earnings abilities, especially women.
• Many divorces lead to the sale of the family home, which creates a major financial burden. If your marriage falls apart when the housing market does, the impact will be even worse.
• It’s more expensive to run two households, than it is to run one.
• Tax rates change when couples divorce.

Dividing up a 401(k) when only one spouse was working can be tricky. You’ll need a court order known as a QDRO (a domestic relations order) to divide the account. The nonparticipating spouse of a 401(k) can typically receive funds from their ex’s as cash and not have to pay a tax penalty for the early withdrawal.  However, that money should be set aside for retirement. The money is often used to pay off debt or to fund the purchase of a new home. That means there is much less available for retirement.

Once the financial dust has settled, experts recommend reviewing both your retirement plan and estate plan. You’ll want to make changes on documents, including life insurance policies and any assets where your former spouse was listed. There may be court orders concerning retitling accounts. Failure to make changes can have disastrous consequences.  Speak with your estate planning attorney, to make sure your estate plan matches your new marital status.

Reference: CNBC (June 28, 20918) This move is almost as bad for your retirement savings as the Great Recession was”

離婚對退休的影響

“根據波士頓學院退休研究中心的最新發現，結束婚姻對退休儲蓄幾乎和經濟衰退一樣具有破壞性。”

要結束婚姻並保持退休儲蓄不變幾乎是不可能。由於法律費用和離婚後資產分配和家庭少了一份收入，離婚的代價費用會很高。如同CNBC中討論 “This move is almost as bad for your retirement savings as the Great Recession was,”(對於退休儲蓄來說，這一舉措幾乎與大衰退一樣糟糕) 離婚使人們的退休處於危險之中，因此一些人離婚後必須工作多年才能退休。

目前的統計數據顯示，大約40％的婚姻以離婚告終。波士頓學院全國退休風險指數背後的研究人員研究了，退休後個人維持生活水平的可能性。在2016年，據報導有一半的工作年齡家庭處於危險之中。離婚將一個人的退休風險提高了7個百分點，而2008年的金融危機則增加了9個百分點。

以下是離婚對退休造成嚴重打擊的更多原因：

• 除了法律費用外，離婚訴訟還會使人們難以專心工作，並對他們的收入能力產生影響，尤其是女性。
• 許多離婚導致出售家庭住房，這造成了巨大的經濟負擔。如果你的婚姻破裂正處在房地產市場下滑時，其影響將更加嚴重。
• 負擔兩個家庭比負擔一個家庭更昂貴。
• 夫妻離婚時稅率會發生變化。

當只有一個配偶工作時劃分401（k）退休儲蓄賬戶可能會很棘手。您需要一個稱為QDRO的法院命令來劃分賬戶。401（k）的非參與配偶通常可以從他們的前配偶獲得帳戶裡的現金，而不必為提前退出而付出代價。但是，應該留這筆錢用於退休。很多人會用這筆錢來償還債務或購買新房，但這意味著可用來退休養老的錢便少了。

一旦財務搞定了，專家建議審查您的退休計劃和遺產計劃。您需要對文件進行更改，包括人壽保險單和有您前配偶名字的任何資產。你可能需要法院命令来改變帳戶名稱。未能做出改變可能會帶來災難性的後果。請與您的資產規劃律師聯繫，確保您的資產計劃符合您新的婚姻狀況。

參考: CNBC (June 28, 20918) This move is almost as bad for your retirement savings as the Great Recession was”