Archives for May 2014

Bankruptcy and Retirement Benefits

Protecting Your Retirement When You Face Bankruptcy

American Board of CertificationYou’ve worked hard to build a nest egg for your retirement, faithfully contributing to an IRA or a 401(k). Maybe you’ve had health problems or lost your job, though, and the bills have piled up. You may see bankruptcy as the only way to get back on your feet again. If you file for bankruptcy, will you lose your retirement funds and be forced to start all over again?

The Exemption of Retirement Accounts in Bankruptcy Proceedings

As a general rule, most pension and retirement funds may not be taken or used by creditors in a bankruptcy proceeding. In a Chapter 7 case, they cannot be liquidated to satisfy creditors.

The rule protecting pension and retirement accounts includes all types, 401(k) accounts, 403(b) accounts, profit sharing plans, money purchase plans, Keoghs and defined benefit plans, so long as they are properly set up as “ERISA Qualified”. For New Jersey residents, any form of IRA is also protected, unless the IRA funds were improperly or fraudulently put there. (Inherited IRA’s are an open issue right now, a question the US Supreme Court is presently considering) In other states, different exemptions may apply.

Social Security is always protected.

Federal law protects Social Security benefits from claims of creditors. This protection continues after you receive the money, as long as you can “trace” the money in an account back to Social Security payments. We recommend against mixing in Social Security payments in an account with substantial amounts of money from other sources.

This area, like so many others, is potentially complex. This discussion is fairly general. Independent review by a qualified attorney is highly recommended.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we provide a free initial consultation to every client. We do, however, reserve the right to charge a fee to review any work done by another attorney. To set up an appointment, call our office at (856) 596-2828 or send us an e-mail. Evening and weekend appointments are available upon request.

Protecting Yourself and Your Company in the Face of Business Litigation

Taking the Right Steps When You Become Involved in Business Litigation

It’s generally an unavoidable aspect of running a business — at some point, you will have a dispute with a customer, vendor or competitor that cannot be settled. When litigation is the only means to settle your differences, there are measures you should take to protect yourself.

Never ignore legal papers, and if you have been served with a Complaint, you MUST file an Answer WITH THE COURT.

Incredibly, we have seen business people whose response to a lawsuit is to call the plaintiff or their attorney, and expect that everything will all work out! They are then surprised when a judgment is entered. Calls or letters to the attorney for the other side do nothing. Whatever you do, you must file something with the court. Even if a matter is “settled” you need to file something to let the court know.

Hire Competent Legal Counsel

Regardless of how insignificant the dispute may be, you are always well served to seek advice from an experienced and competent attorney. You may be totally unaware of filing restrictions, and can risk the loss of your rights by trying to handle matters on your own.

Contact Your Insurance Carrier

It is always a good idea to review your comprehensive general liability policy or other policies to see if any provide coverage for the costs of business litigation or possible liability. Your insurer may have a duty to defend you under the policy. Even if your carrier denies coverage, you may want to seek a legal opinion regarding coverage. It costs you nothing in most cases to make a claim with the insurance carrier, but do it in writing. And do it right away.

Protect All Relevant Records

The most important step in protecting your rights is to nail down and safeguard all relevant records. If the records are hard copies or physical evidence, they should be separated and stored in a safe and secure place. This includes all electronic records or files. For these, you need to institute a litigation hold. Some of the key components of a litigation hold include:

  • Saving all electronic records and communications to a protected server or backup media, where nothing can be modified or changed
  • Creation of a secure backup with all metadata intact

Contact Neuner & Ventura, LLP

We understand the stress, anxiety and confusion that can be associated with potential business litigation. We offer a free initial consultation to every client. We do, however, reserve the right to charge a fee to review any work done by another attorney. For an appointment, call Neuner & Ventura at (856) 596-2828 or send us an e-mail. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Bankruptcy and Inheritance

Inherited Property and Bankruptcy

What are the potential implications if you found yourself struggling to meet your financial responsibilities and successfully discharged debts through a Chapter 7 proceeding only to find some months later that you are receiving money or property from someone who has died? Is the money yours free and clear? Will you be required to give some or all of it to the bankruptcy court to be distributed to your creditors? The answers can be complicated, but here are some general rules.

The Treatment of an Inheritance after the Completion of a Bankruptcy Filing

If you filed a Chapter 13 bankruptcy you become entitled to receive life insurance money or other money or assets from someone who has died before the three-to-five year period of repayment is over, you must disclose what has happened and may have to turn over any proceeds unless you can demonstrate to the bankruptcy truste that those assets are exempt or some other exception applies. As a result, your plan payments may end up being modified, or you may have to contribute the unprotected portion of what you inherited to pay debts through your bankruptcy plan.

If, on the other hand, you filed for protection under Chapter 7, whether or not you must turn over inherited assets, life insurance proceeds or other inherited funds depends on how much time has elapsed since you filed for bankruptcy. If the person you are inheriting from died within 180 days of your filing, and if you are receiving the money outright, it will generally be considered part of the bankruptcy estate, and must be disclosed. (There are or may be exceptions for money or assets that you inherit through a valid trust). Accordingly, the bankruptcy trustee can use it to pay your creditors, unless you can claim it as exempt. Any portion of the inheritance that cannot be exempted will be used to pay creditors. But an inheritance that you receive more than 180 days after a Chapter 7 filing will not be part of the Chapter 7 bankruptcy estate.

If this situation happens to you, you should promptly seek qualified legal advice as soon as you know you are receiving money or property because someone has died. With the right advice and planning, you will be guided to do the right thing and make use of whatever rights or tools are available to you.

Contact Neuner & Ventura, LLP

At Neuner & Ventura, LLP, we know the personal challenges that come with a potential bankruptcy filing. We offer a free initial consultation to every client. We do, however, reserve the right to charge a fee to review any work done by another attorney. For an appointment, call Neuner & Ventura at (856) 596-2828 or send us an e-mail. Evening and weekend appointments are available upon request.

Representing Clients across South Jersey

Recognized Quality & Experience