Can Bankruptcy Help in Medicaid or Medicare Termination for Healthcare Providers?

Chief of Medicine medical board member from a healthcare provider service discussing Chapter 11 bankruptcy with an attorney, dealing with Medicare/Medicaid service termination

The answer as to whether bankruptcy can help healthcare providers in Medicaid or Medicare termination varies by jurisdiction, but it generally leans towards a conditional yes. It all depends on how bankruptcy courts address the termination.

Medicare and Medicaid payments make up a significant amount of total revenue for many healthcare providers. So you as a healthcare provider may wonder whether you can use Chapter 11 bankruptcy to prevent a federal or state agency from terminating your Medicare or Medicaid provider agreements. 

Recent developments in bankruptcy case law have introduced potential leverage for healthcare providers. Courts have challenged the traditional view that transferees must assume all liabilities when Medicare and Medicaid provider agreements are transferred in bankruptcy. As bankruptcy experts, our team has kept a close eye on these types of cases, and offers free consultations to healthcare providers facing possible terminations.

How the Law Interprets Bankruptcy Considering Medicare/Medicaid Termination

A bankruptcy court has two ways it can attempt to halt the termination: through an automatic stay pursuant to the Bankruptcy Code, or by ordering an injunction to maintain the status quo throughout the bankruptcy proceedings (thus keeping the provider agreement in place at least temporarily). 

An automatic stay is simply an automatic injunction that prevents creditors from taking actions to collect debts from a debtor who has declared bankruptcy. However, there are certain statutory exceptions to an automatic stay, including one for actions falling within the government’s use of “police and regulatory power.”

Cases like those of Center City Healthcare and Verity have seen provider agreements treated as “statutory entitlements” that could be sold free and clear of successor liabilities rather than as “executory contracts” that require the acceptance of all associated liabilities.

Regarding the method of a separate court-ordered injunction, some question whether government actions pertaining to the Medicare and Medicaid Act are even within a bankruptcy court’s jurisdictional powers to begin with.

The Eleventh Circuit Court of Appeals (encompassing Florida, Georgia, and Alabama) has addressed the question of jurisdiction. According to the Eleventh Circuit, a bankruptcy judge does not have the authority to stop a government action related to the Medicare and Medicaid Act.

As to the automatic stay, the First Circuit Court of Appeals (encompassing Maine, New Hampshire, Massachusetts, and Rhode Island) found that the government could still terminate the Medicare and Medicaid provider agreements based on the statutory exception for police power. Meanwhile, the Supreme Court has so far not taken the opportunity to weigh in.

As things stand now, there are only two definitive answers to the question of whether bankruptcy is a guaranteed shield against the government terminating a provider agreement: maybe, and wait and see.

Have any additional questions about bankruptcy? Read our Bankruptcy FAQs here.

Let the Bankruptcy Experts Handle Your Business with Care

Navigating the complexities of Medicare and Medicaid provider agreements can be more than daunting. Our experienced legal team understands the unique challenges faced by the healthcare sector and is adept at leveraging the latest legal developments to protect your interests.

At OlsenDaines, we specialize in providing comprehensive Chapter 11 bankruptcy services tailored specifically for healthcare providers in Oregon & Washington. 

Whether you are contemplating restructuring or need to defend against the termination of provider agreements, our attorneys are here to ensure your business can continue operating without the overwhelming burden of government liabilities. We guide you through every step of the bankruptcy process, from filing to final resolution, ensuring that you have the best possible defense against any adverse government actions.

Don’t let the complexities of bankruptcy law hinder your healthcare business. Contact us today to learn how our specialized services can provide the legal protection you need.

Student Loan Debt Forgiveness: Is Bankruptcy an Option?

Photograph of a figurine of unhappy female graduate in cap and gown buried under stacks of U.S. paper currency, suggesting the idea of the crushing student loans with looming possibility of filing for bankruptcy

Any debt relief is good relief for those who owe on their student loans, including forgiveness programs and bankruptcy. Federal student loan payments were paused starting in March 2020, and years later, the U.S. Department of Education announced that (most) borrowers had to resume payments as of October 2023.

Though the decision to continue student loan payments was disappointing for borrowers across the country, that doesn’t mean it’s time to despair. Historically, student loans have been considered non-dischargeable through bankruptcy. However, thanks to the Department of Education’s recent policy changes student loan discharge is more accessible through bankruptcy than ever before. 

If you’re in this situation, there’s still some hope. Many people are unaware that there are several different ways they can achieve student loan forgiveness. In these complex times, you may find yourself in need of a student loan legal counsel from OlsenDaines to help you navigate through the red tape and explain all of your options to you. At the very least, we can give you a better idea of the options, including filing for bankruptcy.

Am I Eligible for Student Loan Forgiveness Programs?

Eligibility for student loan forgiveness programs can vary depending on factors such as your profession, income, loan type, and repayment history. Public Service Loan Forgiveness (PSLF), Teacher Loan Forgiveness, and Income-Driven Repayment (IDR) plans are just a few examples of the options out there. 

Public Service Loan Forgiveness

To provide relief for full-time employees of government services or non-profit organizations, the federal government also offers Public Service Loan Forgiveness (PSLF). This allows the student loans to be forgiven after 120 qualifying payments, or just ten years while working for a qualifying public service organization. Some examples of qualifying employers include:

  • Military Service
  • Public Health
  • Public Education
  • Social work
  • Early Childhood Education
  • 501(c)(3) Tax-Exempt Organizations

It’s important to note that the 120 payments do not need to be consecutive, but you must fill out paperwork to delineate which payments contribute toward your forgiveness plan. Additionally, not all employers qualify for PSLF. 

What Is an Income-Driven Repayment Plan (IDR)?

Income-driven repayment (IDR) plans are designed to help individuals who have student loan payments that are disproportionately high compared to their income. These plans calculate your required payments based on how much you earn annually rather than how much you owe. As a result, your payments could be lower and much more affordable than standard repayment options. 

Income-driven repayment plans (IDRs) use your family size and discretionary income to determine an appropriate monthly payment amount. For many people, the IDR can significantly lower monthly payment amounts. IDR plans offer complete loan cancellation after making a certain number of qualifying payments — typically over the course of 20 or 25 years. 

Borrowers may qualify for one of these types of IDR plans:

Repayment Plan % of Discretionary Income Repayment Period
Saving on a Valuable Education (SAVE) Plan 10% 20 years (for only undergraduate loans)
25 years (if you have any graduate or professional loans)
Pay As You Earn (PAYE) 10% 20 years
Income-Based Repayment (IBR) Plan (first borrowed after July 1, 2014) 10% 20 years
Income-Based Repayment (IBR) Plan (borrowed before July 1, 2014) 10% 25 years
Income-Contingent Repayment (ICR) 10% 25 years

The main differences between these plans are the percentage of your discretionary income required in each monthly payment and the amount of time you must make payments before qualifying for forgiveness. 

Saving on a Valuable Education (SAVE) Plan

In addition to the IDR plans above, the Biden Administration has also announced a new plan called the Saving on a Valuable Education (SAVE) plan. This plan has the lowest monthly payment of any available repayment option and offers a number of other benefits to make the debt more manageable. SAVE is rolling out in the summer of 2023 and will go into full effect in July 2024.

Do FFELP Loans Qualify?

Not exactly. Though Federal Family Education Loan Program (FFELP) loans can benefit from these updates to student loan forgiveness, borrowers must apply to consolidate any commercially held loans into a Direct Consolidation Loan to qualify. 

FFELP student loans are privately owned but federally backed. Most loans taken out prior to 2010 are FFELP loans, though your service provider can help you determine which type of loan you have if you aren’t certain.

To truly understand if you qualify for any of these programs, it’s highly recommended that you consult with a knowledgeable student loan lawyer at OlsenDaines. We can assess your unique situation and guide you toward the best course of action.

Filing for Bankruptcy with Student Loans

When student loan debt is crushing your financial plans, you might consider filing for bankruptcy. Chapter 7 and Chapter 13 are the two most common types of bankruptcy for student loan debt.

Chapter 7 bankruptcy, often referred to as “liquidation bankruptcy,” allows for the discharge of most unsecured debts, giving you a fresh financial start. However, student loan debt is notably difficult to discharge under Chapter 7. To have student loans discharged, borrowers must prove “undue hardship,” a stringent standard requiring them to demonstrate that repaying the loans would impose an extreme financial burden. 

Unfortunately, there is no strict definition of undue hardship. The Department of Education has established a list of guidelines that can help determine whether a borrower qualifies. Some examples of factors that can contribute to ‘undue hardship’ include:

  • If the borrower has a disability.
  • If the borrower made a good-faith effort to repay the loans.
  • If the borrower’s income is below the poverty line for their state.

Chapter 13 bankruptcy, also known as “reorganization bankruptcy,” allows you to restructure your debts into a manageable repayment plan over three to five years. While Chapter 13 does not discharge student loan debt, it offers significant relief by halting collection actions and allowing for the inclusion of student loan payments in the repayment plan. This can provide borrowers with temporary relief from high monthly payments and additional time to improve their financial situation. 

After completing the Chapter 13 plan, you must continue to repay any remaining student loan debt, but they may find it more manageable after addressing other financial obligations.

So do you file for bankruptcy, hoping for a fresh start, or do you slug it out, paying off those student loans the hard way? Either way, you don’t want to go it alone. You need someone in your corner – a student loan lawyer.

What Can a Student Loan Lawyer Do for You?

First and foremost, a student loan lawyer, like ours at OlsenDaines, will fight for you and advocate for your rights and best interests. We have the expertise to review your loans, determine if there are any violations or predatory practices, and create a legal strategy to move forward. We’ll negotiate on your behalf with lenders to secure more favorable terms or lower interest rates. We can also represent you in legal proceedings if the need arises. We’ll pursue any and all options to have the debt dismissed or forgiven, if those are possibilities.

A student loan lawyer is a powerful ally who will relentlessly champion your cause and work towards relieving the burden of your student loans.

How Much Does a Student Loan Lawyer Cost?

The fees charged by student loan lawyers will depend on several factors, including the complexity of your case, the services required, and the attorney’s experience and reputation. Setting up a consultation with an attorney can give you a more concrete answer. 

During the consultation, we will take the time to understand your needs, evaluate the intricacies of your case, and provide you with a clear understanding of the potential costs involved. Our goal is to be transparent and work with you to find a solution that aligns with your budget and provides the dedicated legal support you deserve.

We’ll Guide You Through Bankruptcy Options for Student Loan Relief

Though there are several methods for obtaining relief from student loans, the process is rarely easy. But you don’t have to face it all on your own. The debt relief attorneys at OlsenDaines can help you create a plan of action. 

We strive to provide our clients with the information and resources they need to combat debt and find financial stability. By enlisting our expertise, you gain an advocate who will fight for your rights, provide you with comprehensive legal advice, and equip you with the tools needed to overcome the challenges that student loans pose. 

With over 46 years of experience serving Oregon & Washington residents, we know how to access creative relief solutions that can take the stress of serious debt off of your shoulders. From finding other forms of student loan forgiveness to eliminating debts through bankruptcy, we can help you reach financial freedom no matter what your circumstances are.

To schedule your free legal consultation, give us a call today!

Chapter 7 Bankruptcy: What to Know and What to Do When You File

cropped view of woman with Chapter 7 bankruptcy papers near calculator on wooden background

Chapter 7 bankruptcy, also known as straight bankruptcy or liquidation bankruptcy, is a legal process designed to help individuals wipe out their unsecured debts and get a fresh start with their finances. A liquidation plan is created, the individual’s nonexempt property gets sold, and the proceeds are used to service existing debts. A judge then orders all remaining debts to be discharged. 

Although it’s the most common type of bankruptcy in the U.S., declaring Chapter 7 bankruptcy is no minor decision. But it just may be the right one for you, especially if you cannot see any way of paying off your debt in the next five years. Bankruptcy is a powerful tool in the event that your debt burden becomes unmanageable, and if you commit to rebuilding your credit afterward, it can be one of the best financial decisions you’ll ever make.

But you don’t have to make the decision alone. Gather as much information as you can, then consult an experienced bankruptcy attorney, like ours at OlsenDaines, so you can be sure you understand all of the ramifications of your decision.

There are many missteps you should plan to avoid in the months and weeks leading up to filing. For starters – before you can file for bankruptcy you must complete mandatory pre-bankruptcy credit counseling and receive a certificate. 

What to Expect in Pre-Bankruptcy Credit Counseling

The purpose of pre-bankruptcy credit counseling is to provide an impartial look at whether or not a debtor really needs to file for bankruptcy. The most important thing to remember is that you must complete the counseling before you file for bankruptcy. Upon completion, you will receive a certificate that is valid for 180 days. If you decide to file for bankruptcy, you will need to file that certificate with the court.

Pre-bankruptcy credit counseling may be the most painless part of bankruptcy. It can be done in person, by phone, or online, and it usually takes no more than a couple of hours.

Once you have completed the counseling and have your certificate, you must file it with the court along with your other bankruptcy forms. Credit counseling is mandatory. If you do not file a certificate of credit counseling with the court, the bankruptcy court will dismiss your case.

For your counseling session, you will want to bring (or have available) information about your debts and your income. The counselor will discuss your financial situation with you and will talk to you about what non-bankruptcy options you may have. Counseling will most likely include:

  • A thorough review of your personal finances
  • A discussion of alternatives to bankruptcy
  • Personal budget plan.

Overall, this counseling will help you to understand how bankruptcy works and what you can do to avoid financial risk in the future.

Should I Stop Paying Creditors If I’m Going to File for Bankruptcy?

The short answer is, no you shouldn’t stop paying creditors until you’ve officially filed. When you file for bankruptcy, the court will order an automatic stay which will prohibit lenders from making harassing collection calls, sending threatening letters, and trying to file lawsuits against you. But until then, they can continue to harass you so don’t be surprised if you suddenly stop making payments.

In most cases, the automatic stay remains in effect until your bankruptcy case is concluded. Keep in mind that it won’t stop every debt collector. Automatic stay orders will not halt child support, loans against your pension, or back taxes. And if you filed for bankruptcy in the previous year, the order will expire after 30 days.

  • Auto Loans: If you stop making payments on your auto loan, the creditor will eventually attempt to repossess your vehicle. If you want to keep the vehicle, you may want to continue making payments so you don’t run the risk of having it repossessed.
  • Credit Cards: In most cases, people are fine not making their credit card payments, but you will likely be subjected to collection calls until you file for bankruptcy. If you just used a card before you realized you were going to file, you may want to continue to make payments. We recommend consulting with a bankruptcy attorney.
  • Home Loans: As with auto loans, if you stop making your mortgage payments, at some point the creditor will attempt to foreclose the home. If you want to keep it, you may want to continue making your monthly payments. Every case is different.

If you’ve taken out loans through your bank or credit union and you’ve stopped making payments, they can institute a setoff. This allows them to withdraw money from one of your accounts to another to cover the loan payment. You may want to move your money around before missing a debt payment.

How Much Does a Bankruptcy Affect Your Credit Score?

As one of the single largest events that can affect your credit score, bankruptcy can drop it by hundreds of points. If your credit score is considered ‘good,’ you will be penalized more heavily than if it is ‘average’ or worse.

So if you have solid credit (700+), your credit score will drop by about 200 points. But if you have below-average to average credit, your score won’t drop as much. 

The good news is that the effect is not permanent. In fact, you can start rebuilding credit immediately after bankruptcy is filed. The process takes some time, but financial institutions offer products like secured credit cards and credit-builder loans that can help. Just be sure to make your payments regularly and on time and practice smart spending habits. Financial institutions will look favorably on your efforts to rebuild credit after bankruptcy, even if you have it on your record.

What Factors Affect Your Credit Score?

Credit card payments, mortgage payments, and rent payments are three types of debt that will have the largest impact on your credit score. 

The rules around another common type of debt (medical debt) are currently changing as of June 2024, thanks to pressure from the Consumer Financial Protection Bureau (CFPB) and the American Rescue Plan (ARP). Those who are forced to take on medical debt usually have no idea how much their treatments will end up costing. 

Do You Still Owe Taxes if You File for Bankruptcy?

Yes, you must pay your taxes (and file extensions if needed) during the bankruptcy process. Filing for bankruptcy is one of the most effective ways to eliminate debt, save your home, and rebuild your financial security. It can also help you sleep easier at night knowing that you won’t have to worry about repossession or mounting bills. 

How Do Taxes Work After Bankruptcy?

Many people overlook their tax situation when filing for bankruptcy, but it’s crucial to know what to expect before moving forward with your case. Your tax requirements will look different depending on which type of bankruptcy you are filing for. 

Chapter 7 bankruptcy is meant to help those with lower income and fewer assets, and individuals must pass a “means test” in order to qualify. If granted Chapter 7 bankruptcy, individuals will be assigned a trustee who will be responsible for reviewing their petition and seizing any nonexempt assets that can be sold to benefit their creditors.

If you are unable to pay your taxes and accrue new debt, it can negatively impact your case and may even result in your case being dismissed. However, if you are expecting a tax refund but are granted Chapter 7 bankruptcy, then you may need to turn the funds over to your trustee, who will use them to pay your creditors.

Can Bankruptcy Discharge Tax Debt?

Tax debt generally cannot be discharged even if you are granted bankruptcy. Tax debt is considered “unsecured debt.” That said, if your tax debt meets a few specific criteria, you may be able to discharge it when filing for Chapter 7 bankruptcy. Your debt may be considered for discharge if it meets these requirements:

  • The tax return filing was due three or more years ago.
  • The tax return filing was two or more years ago.
  • The tax assessment is at least 240 days old.
  • The tax return was not fraudulent.
  • The taxpayer did not attempt tax evasion.

What is Bankruptcy Exemption Planning?

Bankruptcy exemption planning is the process of making deliberate choices concerning a debtor’s property before filing bankruptcy, to maximize the exemption protections provided by the bankruptcy law. So one primary way that bankruptcy law attains its goal of providing debtors with a “fresh start” is by providing debtors with certain “exemptions” that protect their property from creditors and put it beyond the reach of the bankruptcy trustee. 

Warning: bankruptcy exemption planning can be dangerous. Most people who file for bankruptcy do not lose anything they own because they often file a Chapter 7 bankruptcy and everything they own is “exempt.” 

Section 727(a)(2) of the Bankruptcy Code prohibits any debtor who attempts to defraud creditors by transfers of property, from being discharged. So there is tension in the law with regard to how much you are allowed to sell or transfer before filing for bankruptcy. 

To properly engage in exemption planning, you will need the advice of an experienced and highly competent bankruptcy attorney to guide you as to the safest way to engage in asset protection and other strategies, and to inform you on which strategies are likely to be safe.

Bankruptcy in the Context of Divorce

Many divorced couples say that conflict over finances caused their marriage to fall apart. Fights over money ruin relationships. That’s why we so often see divorce occur when there is a bankruptcy. It’s because of this that it is critical to understand the intersection of bankruptcy and divorce laws.

What comes first – divorce or bankruptcy? There’s no simple answer. If you are facing divorce and bankruptcy, the first thing you need to consider is timing. You must decide whether to file for divorce first or for bankruptcy first. (Filing the two together causes significantly more problems.) How you answer that question depends on a number of things: 

  • Your income
  • Your spouse’s income
  • What assets you possess
  • Costs of divorce and bankruptcy
  • What type of bankruptcy you are filing for or qualify for

What Type of Bankruptcy to File in Divorce

An important factor to consider is the type of bankruptcy that you should file for. A Chapter 7 bankruptcy requires that you meet the income requirements of the “means test.” If your income compared to certain expenses is too high, you will be required to file for Chapter 13 (“reorganization”) bankruptcy instead.

If your earnings are significantly different from your spouse’s, it might make more sense to file for divorce before you file for bankruptcy. On the other hand, if you earn significantly less than your spouse and you file for bankruptcy individually after the divorce is final, you may have a better chance of qualifying for Chapter 7 bankruptcy.

Although the intersection of bankruptcy and divorce may be common, it is not simple to navigate. But the good news is that you do not need to try to figure all this out on your own. OlsenDaines is here to help.

Before you can make a final decision, you must consider the facts of your situation, the divorce laws, and the bankruptcy laws. That’s why you should sit down with an experienced bankruptcy attorney to discuss your situation and what is best for you. 

Is Bankruptcy Right For You? Let OlsenDaines Help You Decide

To achieve your financial goals, it’s best to work with an experienced bankruptcy attorney. OlsenDaines has vast experience with bankruptcy. In fact, we’re the top bankruptcy filer in Oregon & Washington. 

Filing for bankruptcy can be overwhelming, but you don’t have to navigate it all alone. The experienced bankruptcy attorneys at OlsenDaines are prepared to help get you through the process as quickly and easily as possible while answering all of your questions. 

We have proudly served Oregon & Washington residents for over 46 years and are ready to use our expertise to help you relieve your debt. To get started, schedule your free, no-obligation legal consultation with one of our attorneys today!

Protecting Your Retirement Accounts in Bankruptcy

Protecting Your Retirement Accounts in Bankruptcy in the Vancouver-Portland Metro area | OlsenDaines

Bankruptcy is often associated with losing everything, including your hard-earned retirement savings. But contrary to popular belief, filing for bankruptcy doesn’t necessarily mean that you have to surrender all your retirement accounts. There are ways of protecting your retirement accounts from creditors during bankruptcy. In this blog post, we’ll discuss different types of retirement accounts, what counts as a qualified account, and how you can safeguard your retirement savings.

The Two Types of Retirement Accounts

When it comes to retirement accounts, there are two types: qualified and non-qualified. Non-qualified accounts are regular investment accounts that you use to save for retirement. These accounts are not protected during bankruptcy, so creditors may seize your investments if you file for bankruptcy. On the other hand, qualified accounts are tax-advantaged retirement accounts that the IRS recognizes and approves. These accounts are usually exempt from bankruptcy proceedings, meaning your creditors can’t touch them.

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What You Need to Know About Qualified Accounts

The most common types of qualified accounts are 401(k)s and IRAs. A 401(k) is a retirement savings account offered by an employer, while an IRA is an individual retirement account. These accounts are tax-deferred, meaning you won’t have to pay taxes until you withdraw the money in retirement. If you file for bankruptcy, you can protect your 401(k) and IRA from creditors as long as you follow specific rules and regulations.

One of the most important things you need to do to protect your retirement accounts in bankruptcy is to provide accurate and complete information about your retirement plans. Your bankruptcy attorney will review your account statements and determine whether they qualify as protected retirement accounts. If you have a mix of qualified and non-qualified retirement accounts, your attorney may advise you to transfer your assets to your qualified accounts to shield them from creditors.

How Bankruptcy Exemptions Can Protect Your Assets

Another way of protecting your retirement savings during bankruptcy is to use exemptions. In some cases, state or federal laws may allow you to exempt certain assets from bankruptcy proceedings, including retirement accounts. However, the specific amount of exemption you can claim will depend on the type of retirement account, its balance, and the laws of your state.

It’s also worth noting that filing for bankruptcy may impact your retirement plans. For instance, if you have a 401(k) loan when you file for bankruptcy, you may be required to repay the loan in full or risk losing your 401(k) savings. Similarly, if you have already started receiving retirement benefits, such as Social Security or pension payments, you may not be able to discharge them in bankruptcy.

Your Attorney Can Help Protect Your Accounts

Recently, I had a conversation with a client who had two different types of accounts – a nonqualified account and an IRA, which is a qualified account. After filing for bankruptcy, our next step was to meet with the trustee to verify the types of accounts the client had. Unfortunately, there was some confusion, and the trustee initially believed that both accounts were non-qualified. This could’ve resulted in the client surrendering some of her accounts. Fortunately, we had the proper documentation in place, and we could demonstrate that the money in her IRA was totally protected and exempt from any creditors. For the client, it was a relief to know that her assets were protected and that we had done the work beforehand to ensure that her documentation was in order.

Filing for bankruptcy can be a stressful and daunting experience, especially when you need clarification on what will happen to your retirement savings. However, with the right legal guidance and strategies, you can protect your retirement accounts during bankruptcy and ensure that you have a secure financial future. Remember, if you’re considering filing for bankruptcy, it’s crucial to work with an experienced bankruptcy attorney who understands the intricacies of bankruptcy law and can help you make informed decisions. Don’t let bankruptcy erode your retirement plans – take steps to safeguard your future today!

Contact OlsenDaines for Bankruptcy Help Today

From our free bankruptcy consultations to our complimentary credit rebuilding program, bankruptcy attorneys at OlsenDaines are here to help you with every step of the bankruptcy process. We are the largest and most experienced consumer bankruptcy law firm in the Pacific NW. We are able to address your financial difficulties with the expertise and careful planning you are seeking. Contact us today!

How Bankruptcy Can Affect Your Family Business

How Bankruptcy Can Affect Your Family Business in the Vancouver-Portland Metro area | OlsenDaines

Are you considering bankruptcy but wondering how it might affect your family business? If so, you’re not alone. Many small business owners find themselves in a position where they need to file for bankruptcy but are worried about the impact it will have on their company. In this blog post, we’ll explore how filing for bankruptcy can affect your family business and provide helpful information to ease your worries.

Membership or Shares in the Family Business

When you file for bankruptcy, the first thing that is considered is your assets. It’s important to note that your LLC or corporation must only file for bankruptcy if it’s also experiencing financial difficulties. However, the value of your membership or shares in the corporation will be considered. The bankruptcy law protects your assets, so there are limits to what can be taken or seized by creditors. This is where your membership or shares in the family business come into play.

Value of Your Membership or Shares

If the membership or shares do not have enough value to a trustee, they will not be at risk of bankruptcy. That said, it’s important to have a professional look closely at the value of your ownership interest in the LLC or Corporation, as this is what the trustee will assess. In many cases, your membership or shares may not be worth enough to be at risk of bankruptcy. In assessing the value of your ownership interest in the LLC or corporation, you should contact a professional with experience in bankruptcy law. They can help you determine whether your family business is at risk and guide you on the right path forward. They’ll discuss the valuation of your membership or shares and whether you need to take action to protect them.

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Bankruptcy Often Does Not Impact Your Ownership Interest

In most cases, you can file for bankruptcy without impacting your ownership interest in the family business. For example, in a recent client’s case, we found that his portion of the family LLC wasn’t worth enough to be at risk of bankruptcy. He could file for Chapter 7 bankruptcy to eliminate his credit card, medical, and vehicle repo debts while keeping his ownership interest in the family LLC. In this way, bankruptcy could give Kyle the fresh start he needed while preserving his ownership status.

If you’re considering filing for bankruptcy and worried about how it might impact your family business, there’s no need to fret. While your membership or shares in the LLC or Corporation will be taken into account, they may not be at risk. By working with a professional experienced in bankruptcy law, you can determine the value of your interest and whether it will be impacted. In most cases, you can file for bankruptcy and keep your family business intact. So, don’t let the fear of default keep you from getting a fresh financial start. Consult with a professional and get the help you need.

Contact the Bankruptcy Attorneys at OlsenDaines Today

From our free bankruptcy consultations to our complimentary credit rebuilding program, bankruptcy attorneys at OlsenDaines are here to help you with every step of the bankruptcy process. We are the largest and most experienced consumer bankruptcy law firm in the Pacific NW, with convenient offices throughout Oregon and Washington. We can address your financial difficulties with the expertise and careful planning you are seeking. Contact us today to schedule your free bankruptcy consultation.

How to Make Bankruptcy Process Smooth for You and Your Attorney

How to Make Bankruptcy Process Smooth for You and Your Attorney by OlsenDaines in the Vancouver-Portland Metro area.

Are you one of those people who are overwhelmed by debt and are contemplating filing for bankruptcy? If so, this post is for you.

Filing for bankruptcy might seem complicated, but it doesn’t have to be. To make the process smoother and less stressful for you and your attorney, consider taking a few simple steps. In this post, we’ll discuss what great bankruptcy clients do to help their attorneys assist them effectively.

Provide Documents in an Appropriate Format

One of the most important things you can do to help your attorney is to provide all the necessary documents in an appropriate format. Typically, people use PDF documents in the business world, and most bankruptcy attorneys also accept PDF. If you provide documents in alternate formats like JPEG or TIFF format, it may take your attorney extra time to modify them before submitting them to the court. Some attorneys offer a portal where you can upload your documents, while others may prefer to receive them by email. Either way, it’s crucial to send all the documents in one email with multiple well-labeled attachments.

Organize Your Documents

Bankruptcy involves summoning a lot of paperwork, and you will need to provide financial information about your assets, debts, and income. Thus, you must ensure all your documents are well-organized before giving them to your attorney. Go through all your documents and create a checklist of required documents. Label each document using appropriate titles such as bank statements, pay stubs, tax returns, or insurance documents. It’s essential to provide all necessary documents since you need a document to ensure your bankruptcy case is completed on time.

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Provide Accurate Information

To fill out the bankruptcy petition, your attorney will need accurate information from you. Therefore, it’s essential to be honest and forthright about your finances, assets, and debts. Providing inaccurate information will not only delay your case but can also result in legal consequences. Be sure to inform your attorney of any significant debt or assets you own, even if it’s not listed in your credit report or financial statement.

Answer All Questions Honestly

Your attorney will ask you many questions, some of which may seem too personal. They may ask about your income, expenses, past bankruptcies, or lifestyle. It’s vital to answer all the questions honestly since providing false or inaccurate information can have legal consequences. Your attorney may even re-phrase a question or ask it in a slightly different way to ensure they get an accurate response.

Keep in Touch With Your Attorney

You and your attorney are a team, and communication is vital to ensuring the bankruptcy process runs smoothly. If you have any questions or concerns regarding your case, contact your attorney immediately. Ensure that you respond to all their queries promptly and honestly. Keep your attorney updated on any changes to your finances or personal life, such as job loss, marriage, or relocation.

Bankruptcy can be an overwhelming experience, but with the proper support, it doesn’t have to be. By following these tips, you can make the bankruptcy process smoother and easier for you and your attorney. Remember to provide all the necessary documents in an appropriate format, be honest and accurate about your financial information, and keep in touch with your attorney throughout the process. By doing these things, you will increase the chances of a successful bankruptcy filing and move towards a new financial beginning.

Do you have questions regarding the bankruptcy process? Wondering if bankruptcy is right for you? Whatever questions you may have, we can help. Call today to schedule your free consultation with one of our experienced bankruptcy attorneys in the Vancouver-Portland metro area.

How to file an adversary proceeding for student loan bankruptcy

Person looking at data on tablet at a busy desk in OR | OlsenDaines

As most people dealing with debt know, there are many different kinds of debt and some types are more difficult to eliminate in bankruptcy than others. Student loan debt is one such debt that’s not automatically discharged in bankruptcy proceedings. Unfortunately, this fact has led many people to believe that student loans can’t be discharged at all. Many borrower can discharge student loan debt through bankruptcy, but it requires additional steps.

This post explains how to file an adversary proceeding for student debt bankruptcy in Oregon, and help you decide whether it’s the right move for you.

How Do You File an Adversary Complaint for Student Loan Bankruptcy?

Getting student debt discharged through bankruptcy requires filing for an adversary proceeding. An adversary proceeding is a legal action that occurs within a bankruptcy case; it’s a formal process used to address specific issues or disputes between various parties that cannot be resolved through the regular bankruptcy process.

What are the Steps to Getting Student Debt Discharged through Bankruptcy?

The first step should always be consulting with an experienced bankruptcy attorney. Bankruptcy laws are extremely intricate, and this process is no exception. Need help finding a student loan lawyer? Check out our blog on how to hire the best student loan lawyer for you. 

If you and your bankruptcy attorney believe your case meets the criteria, you should proceed with these steps:

  • File the complaint: The complaint is filed with the bankruptcy court overseeing your case. There are specific forms and procedures you need to follow, which your attorney will be familiar with. Filing the complaint initiates the adversary proceeding and sets the legal process in motion.
  • Serving the parties involved: After filing the complaint, it must be properly served to all relevant parties, including the student loan lender or servicer. This ensures that everyone involved is aware of the legal action and can respond accordingly.
  • Responses and negotiations: The opposing party will respond to your complaint. This usually leads to negotiations or settlement discussions. Your attorney will guide you through these interactions and help you make informed decisions about potential resolutions.
  • Court proceedings: Depending on the progress of your adversary proceeding, you might need to attend a deposition and trial. Your attorney will represent your interests and present your case to the judge.
  • Decision rendered: The judge will ultimately make the decision. If the court rules in your favor, your student loans will be fully discharged.  The judge can also order a partial discharge if it appears you can pay back some but not all of your student loans.

How Do They Decide Whether to Discharge Your Student Debt?

The judge will make a decision based on your specific situation. The decision is based on three main guidelines:

  • Are you unable to maintain a minimal standard of living for you and your dependents? This is determined by current income and expenses.
  • Is there a likelihood you will be able to pay back your loans in the future? Factors the judge will consider include disabilities, long-term unemployment, and other adverse circumstances.
  • Have you made a good faith effort to repay your loan up until this point? If you’ve enrolled in an income-driven repayment plan, applied for forbearance or forgiveness programs, or consolidation, this can be used as evidence that you have made a good faith effort to pay.

Are You a Candidate for Student Loan Debt Discharge through Bankruptcy?

If student debt is crushing your ability to become financially independent, you may be a good candidate for student debt forgiveness. Of course, as with any possible legal strategy, it’s vitally important to get an opinion from a lawyer with specialized knowledge – in this case, an experienced bankruptcy attorney. An lawyer who focuses his practice on bankruptcy issues will understand the ins and outs of this particular area of law and can review with you some important considerations before you move forward.

While discharging student loans through bankruptcy is not guaranteed, taking the right steps and seeking professional guidance can increase your chances of achieving a favorable outcome and gaining relief from your student loan debt. If you’re ready to start exploring your options for filing an adversary complaint for student loan bankruptcy, give us a call today. Our experienced Oregon-based bankruptcy attorneys are ready to answer all your questions.

Explaining the New Bankruptcy Discharge Process for Student Loan Borrowers

Person adding up student loan debt on calculator

Over 42.8 million Americans have student loans, making it one of the most common forms of debt in the United States. While the amount of student loan debt has increased in recent years, it remains one of the most challenging types of debt to discharge through bankruptcy. However, the Department of Education recently reformed its policies to make the discharge process easier and more accessible to student loan borrowers. In this guide, we’ll explain everything you need to know about the new bankruptcy discharge process for student loans. 

Adversary Proceedings and “Undue Hardship”

In order to be considered for student loan discharge, individuals must initiate a separate lawsuit within their bankruptcy case called an “adversary proceeding”. During this process, the debtor is essentially suing the student loan lender. To do so, however, the debtor must demonstrate that he or she is experiencing “undue hardship” as a result of the loans.

Prior to these policy changes “undue hardship” was an undefined term in the bankruptcy code, which made it challenging for courts to judge each case by universal standards – leaving a lot of room for interpretation. 

In the past, most courts used something called the “Brunner Test” to determine who qualified for student loan discharge. This test was originally created in a 1987 court case during which a woman attempted to discharge her student loans less than a year after earning her degree. The goal of the test was to deter individuals from rushing into bankruptcy immediately after graduating, and it includes three questions:

  • Have you made a good-faith effort to repay the loans?
  • Are you unable to maintain a minimal standard of living while making the payments?
  • Is your financial situation likely to persist?

If the answer to each of these questions is “yes” and is supported by extensive evidence, then the loans can be discharged. 

On the surface, this may seem like a great system for discharging student debt. However, adversary proceedings are lengthy and costly, and they often weren’t successful because the requirements to pass the Brunner Test were still highly variable. Over time the test became increasingly difficult to pass, and many legal experts think it is now close to impossible to have loans discharged through this method.

How New Policy Changes Make Student Loan Discharge More Accessible

Debtors are still required to initiate an adversary proceeding within their bankruptcy case in order to be considered for student loan discharge.  The recent policy changes will ease the process by:

  • Setting clear standards for what is considered “undue hardship”: The current process uses arbitrary methods to review evidence and determine whether the debtor is experiencing undue hardship. According to the Department of Justice’s recent press release, the new process will include a thorough review of the debtor’s financial situation against concrete standards. These standards will be based on data provided by the Department of Education, along with other information that could contribute to undue hardship. This will ensure each debtor is judged fairly, without room for subjectivity.
  • Allowing for partial discharge if appropriate: Historically, student loans were either completely discharged or left entirely intact. The new policy changes allow for partial discharges depending on the debtor’s financial situation, which will make relief more accessible to those who are struggling with student loans. 

Considering Bankruptcy?

If you are overwhelmed with debt and need relief, don’t hesitate to contact the knowledgeable bankruptcy attorneys at OlsenDaines. Whether you’re dealing with significant student loans or other types of debt, we can assess your situation and help you determine the best course of action to regain financial stability. With over 40 years of experience serving individuals and businesses throughout the state of Oregon, we know how to help you with everything from foreclosures to creditor harassment. Whatever you’re facing, we can help. Just give us a call today to schedule your free legal consultation.