Sample Cases
This is a sample of cases handled by Normand & Associates
Disclaimer: Remember that every case is different, and we are not able to promise in advance what your case result will be. We outline below, hypothetical samples of the types of cases that we have handled before. Please note that this is a fictional example of the types of cases that we see and is not intended to reflect any individual client.
Sample Bankruptcy Cases
In order to understand the bankruptcy process, we outline an example of the types of matters that we deal with on a daily basis. This is purely a hypothetical example and is not a reflection of any specific client that we have represented.
For example, a husband was working as an electrical engineer for a manufacturing company in northern Massachusetts and earning good wages. His wife worked as an administrative assistant for an insurance company. They had a nice home, were saving money for the college education of their children, had two nice cars, a boat to use on weekends and took annual vacations. They did not save very much and felt that they were getting by until the husband lost his job.
Credit cards seemed handy at first to get through the few weeks and then few months that husband was out of work and collecting the much lower rate of unemployment compensation. After 12 months, all of their savings were exhausted, their credit cards were maxed out, and they were falling behind in their mortgage and their car payments as well. The husband withdrew money from his 401(k) plan that caused the family to incur significant penalties and tax obligations. After two years of trying to cover their bills, they finally spoke to an attorney about their rights. It is too bad they did not do that sooner.
Since they were not too far behind in their mortgage payments, they were able to reaffirm their mortgage and save their house, even though they had almost $200,000 in equity in their home.
Their cars did not have much equity, but their credit was so bad by this point that it would have been hard for them to get car loans. They gave up one of the new cars to get their monthly obligations down and were able to reaffirm the car loan on the other vehicle.
The $65,000 in credit card debt that was accruing interest at rates in excess of 30% per month was totally discharged.
Unfortunately, since the money was already withdrawn from the 401(k) plan and spent, it could not be saved. If they had contacted us earlier, we would have let them know that under New Hampshire law, they would have been able to keep all of the money in their 401(k) plan as well as their IRA. In other words, they could have had $100,000 in their 401(k) plan for their future retirement and would not have had to use that money to pay for their credit card debt. Under this example, they did not have to sell their home or use the equity in the home to pay their credit card debt or any other unsecured debt such as medical bills.
This Chapter 7 liquidation bankruptcy allowed this family to get a fresh start in life at a modest cost of less than $2,000.
Chapter 13 Personal Reorganization is a Viable Option for High-Wage Earners
Under the federal bankruptcy guidelines, individuals and families who earn more than a median or set income established by federal guidelines are unable to file for full liquidation bankruptcy. They still have an opportunity to relieve themselves of much of their debt however, through the filing of a Chapter 13 reorganization bankruptcy. Under a Chapter 13 plan, arrangements are made to repay a portion of the family debt over a three or five year payment plan. You can also use a Chapter 13 plan to make payments on your student loans before other unsecured creditors receive payments through the plan. At the end of the Plan, any balances that remain on your unsecured debts (not including any balance that remains on your student loans) is fully discharged and no additional payments to those creditors is required.
A Chapter 13 Plan also allows you to keep assets that you may otherwise be forced to sell in a Chapter 7 full liquidation bankruptcy. For example, if you own an apartment building, a boat, a motorcycle or other valuable assets, you do not have to sell those assets under a Chapter 13 plan. Rather, your plan payments are adjusted to reflect those assets.
Sample Estate Planning
Example 1:
Aunt Bea died recently after she was cared for by her nephew for many years. Her husband previously died, and she did not have any children. Her Last Will and Testament left all of her remaining estate to her nephew, Robert, who had cared for her.
Aunt Bea owned a two-family home. There were tenants living below Bea at the time of her death. Since Bea died, the tenants have not been paying their rent. She also had some money in the bank, including an old bank account at St. Mary’s Bank in her name and her deceased husband’s name. She also had an annuity with Northwestern Mutual, naming her nephew Robert as the survivor beneficiary.
Robert retained our office to help probate the Last Will and Testament of Aunt Bea to legally transfer her assets into his name. Since he was already named as a survivor beneficiary on the annuity with Northwestern Mutual, Robert was able to access that account immediately by completing the appropriate forms and filing them with the insurance company. Aunt Bea’s bank accounts, including the account at St. Mary’s Bank that was in Aunt Bea’s name and her decease husband’s name, and her two family home had to go through Probate to be properly transferred to Robert.
Attorney Maureen Higham of this office filed a Petition for Probate Administration which was approved by the court. Attorney Higham then filed the appropriate bond with the court and received the Certificate of Appointment needed to close Aunt Bea’s bank accounts and evict the tenants who had stopped paying their rent.
Attorney Higham worked with an auctioneer to appropriately appraise the contents of Aunt Bea’s home and obtained a real estate appraisal of her home as well. The formal appraisal of a home is important after someone dies since it establishes the federal tax basis for the property which is needed for any subsequent sale by Robert.
The estate had to be opened for six months to allow creditors of Aunt Bea to come forward and file claims against the estate for money due them. After the six months had passed, Attorney Higham worked with Robert to prepare a final accounting to file with the Court and Aunt Bea’s final income tax return was filed with the IRS. The Probate Court allowed the final accounting without a hearing, and the real estate was properly transferred into Robert’s name making him the legal owner of the property. The legal fees involved in the administration of Aunt Bea’s estate were not substantial, since there were few complications.
Sometimes additional complications arise, such as creditors who make claims against the estate and relatives who are dissatisfied with the nature of the distribution created by the decedent in her Will. We are frequently able to negotiate a significant reduction in the amount of money owed to the creditors. With respect to contesting relatives, it is a very rare case where the contesting relatives, even though they may grumble their dissatisfaction, undertake the very substantial cost of trying to actually set aside a Will. In those instances, it is always a good idea to work with a law firm, since the law firm acts as a buffer between the executor of the estate and the dissatisfied relatives.
Example 2:
John and Mary have been married for 40 years. They had a Last Will and Testament written by their family lawyer when their children were young. Now their children are grown and John and Mary are grandparents. They have heard that there is a significant delay associated with probate, and they would like to explore the possibility of establishing a trust to avoid probate. They have a home worth $300,000 with a small mortgage on it, $50,000 in a certificate of deposit and $10,000 in the family checking account. John has a 401(k) with his work. Their children are on their own and independent and their grandchildren are a very important part of their lives. They would like to avoid probate and would also like some help handling their affairs as they age.
John and Mary met with Attorney Jim Normand who recommended that they consider executing a revocable trust. Through a revocable trust they create an actual legal entity into which they are able to transfer title ownership to their home, the certificate of deposit, the bank accounts, and their personal belongings including their automobiles. By establishing the trust and transferring these assets into the trust, after John and Mary die, their children will NOT have to go to probate to transfer these assets. The assets will be held by the trust, and the trustee that John and Mary established will be able to make the transfer of the assets to whomever John and Mary selected in the trust.
Additionally, as they aged, they were able to name their oldest daughter, Sarah, as an alternate trustee. That way, if in the future either John or Mary passes away or one or both becomes ill, Sarah can help with their financial affairs without the necessity of going to court to be appointed guardian. After John and Mary die, their property can be transferred by Sarah to John and Mary’s children and grandchildren. Since some of the grandchildren are still young, John and Mary are able to keep their money in the trust to be used to help their grandchildren with their college education. The cost of adopting the trust was not significant and it simplified the administration of John and Mary’s estate.
No one likes to think about their own death, but it’s imperative to have your affairs in order. The attorneys at Normand & Associates can help you take care of your loved ones to give you the peace of mind you deserve.
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