Questions about debts or bankruptcy? Call Doug Beaton, a local specialist in American bankruptcy law.

Everyone knows that lawyers and regular people speak different languages.

Lawyer, of course, speak legalese. And are very attuned to rules, regulations and legal implications.

Most other people speak so they are understood, and and depend on traditional and practical rules to guide them through their lives.

It turns out Kathy Cruz, a bankruptcy lawyer in Arkansas has coined a hilarious phrase for the ordinary dealings that people engage in — she calls them “generally accepted people practices,” a twist on CPA’s concept of GAAP, or standard accounting practices.

According to Cruz, these include putting relatives names on the titles to their property (or taking them off again), buying goods on credit for friends and relatives that can’t afford them on their own, and setting up secret bank accounts for relatives instead of writing a will.

None of these common practices are illegal, or even wrong, on their own, but they will really set off the alarm bells once a bankruptcy case is filed by anyone involved in these “people practices.”

When the legalese of bankruptcy law kicks in, transactions like these are all considered “transfers” in our own legalese, and need to be gone through with a fine tooth comb before a bankruptcy case is filed.

As bankruptcy specialist Cathy Moran points out, you need to go over this kind of stuff with your bankruptcy lawyer before you file a case. At a minimum, consider reviewing

* Whether you have changed the title to any asset;

*Whether you are holding anything that really belongs to someone else;

*Whether anyone has recently died and left you an inheritance you haven’t collected.

*Whether you are on the title to anything that really belongs to another;

*Whether there is anyone holding assets for you in their name;

*Whether you have you taken a loan or cosigned a loan for someone who was unable to get credit themselves;

*and whether you are on anyone else’s bank accounts.

Ironing out these common “people practices” with your bankruptcy lawyer at the start of the case rather than halfway through, will save you a lot of grief later, for sure!

By Doug Beaton

When filing for bankruptcy, debtors are required to list all their debts, including medical debts. But filing bankruptcy on medical debt does not impact your ability to receive treatment in the future. Bankruptcy offers all debtors a fresh start, including debtors with medical debt.

Medical debt is actually one of the biggest causes of bankruptcy in the country. Medical debt is such a huge problem that many Americans are afraid that if they file bankruptcy a hospital or doctor that was included in the bankruptcy may refuse to treat them in an emergency situation. No hospital can refuse emergency treatment to any patient regardless of their income, credit or bankruptcy status: that is the law. And hospitals are not checking with the bankruptcy court when you come through their emergency room, so you have nothing to fear in that regard.

Many debtors considering bankruptcy are also afraid that if they include their personal physician in their bankruptcy case they won’t be able to return to that doctor. This is highly unlikely. With the rising costs of medical care, filing bankruptcy because of medical debt has become more and more common. The medical community is not in the habit of denying treatment to patients even if they discharged a very large medical bill in bankruptcy.

By Doug Beaton

There may be a silver lining for bankruptcy debtors who have a yard full of old cars or trucks that they own.

Last January, the Supreme Court dealt bankruptcy debtors a tough blow — they ruled that they could not take a “vehicle ownership” deduction on the means test for cars and trucks they owned outright, without any loan or lease encumbering them. For a couple with two cars owned outright, that’ s a loss of almost $1000 in means test deductions.

Bottom line: it made it harder for debtors to qualify for Chapter 7, and made it more expensive for them to pay for Chapter 13 plans.

But there is an obscure deduction out there that offer at least a little bit of partial relief. If a bankruptcy debtor’s car is older than 7 years, and has more than 75,000 miles on the odometer, a $200 dollar “clunker” deduction comes into play. (The theory apparently is that older cars cost more to run and maintain).

This little known exception can save the day if you need to file for bankruptcy and have one (or more) older cars sitting in your driveway.

By Doug Beaton

Did you know you can keep your 401 (K) retirement account when you file for bankruptcy?

You can keep all of it, in fact.

Which brings up one of the most fundamental rules of bankruptcy law practice — don’t raid your retirement accounts to pay bills if you think you might have to file for bankruptcy.

Retirement accounts are typically 100% exempt in a bankruptcy case. (This goes for IRA accounts as well as 401(k)’s ). Creditors can’t touch them. No amount of motions filed with the bankruptcy court will change the law. So it is a very bad move to vaoluntarily raid your account to pay off bills.

Instead, you may be able to file for bankruptcy, eliminate all or most of your debt, and still keep your retirement savings. In one fell swoop, you could be ahead of most people in saving for retirement, instead of being behind constantly.

So this is a real no-brainer, as they say. Don’t raid the 401 (k) without talking to a bankruptcy attorney first. If you are in or near the Merrimack Valley and are thinking about bankruptcy, give me a call. The number is 978-975-2608, and I am in on almost every workday.

By Doug Beaton