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Hugh Massey Ray III

Hugh Ray’s Answers

3 total

  • Should I file for bankruptcy?

    I am 29 years old, and I graduated with my MBA almost 3 years ago. Before i went back to school I was making about 45,000 a year. When I went back, I was a graduate assistant (and signed a contract not to work if they paid my tuition and 500 per m...

    Hugh’s Answer

    First of all, I need to clarify that I am not your lawyer and since you do not live in Texas where I practice, this should not be construed as legal advice, rather it is a generally applicable statement of the law.

    People generally file bankruptcy to protect assets - to prevent a foreclosure, etc. If a debtor has no job, nothing substantial to seize, no significant wages to garnish, etc., there is little benefit from bankrutpcy.

    Also, with very rare exceptions for extreme hardship, (i.e. you are brain damaged and in a coma), student loan debt is not dischargeable.

    If you consult with a bankruptcy attorney in your area, he can advise you on state exemptions (which are assets you could keep after a bankruptcy). I advise you to consult with a consumer bankrupty attorney in your area.

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  • Can past state or federal income tax debt be discharged in bankruptcy


    Hugh’s Answer

    First, I am not your lawyer and I do not have enough information from your question to give specific legal advice. This does not answeer questions of Georgia law. Generally, I can state the following:

    1) If a person files bankruptcy he MUST file his tax returns or else the bankruptcy will be dismissed. If no return was filed, or if the returns were filed within the last 2 years, the taxes cannot be discharged (11 U.S.C. §523(a)(1)(B). If the return was fraudulent, the taxes cannot be discharged. 11 U.S.C. §523(a)(1)(C).
    2) If someone owes employee withholding trust fund taxes (form 940 and 941), he cannot discharge them.
    3) If someone owes ordinary income taxes that were assessed and owing within the last 2 years (and returns were filed), he cannot discharge them. (An offer and compromise to the IRS will extend this 2 year period)
    4) If someone owes ordinary income taxes that were unsecured, assessed and owing more than 2 years before the bankruptcy, bankruptcy law allows for those taxes to be discharged if the debtor complies with all other provisions of bankrutpcy law, which may require partial repayment based on the debtor's disposable income. 11 U.S.C. §523(a)(1), §507(a)(8).

    Short answer - the answer depends on how long the taxes have been past due, when the returns were filed, and why the taxes are owed. Even then, a discharge can require monthly payments of disposable income for five years. You should call a Georgia bankruptcy lawyer to consult about the specific facts of your case.

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  • Under TX debt collection laws what are a debtor's rights when a credit card company has secured a judgment against me

    what do i do if there is judgement against me from credit card debt and i can not pay it?

    Hugh’s Answer

    First, please understand that this communication does not make me your lawyer and you are not my client. I do not know all the particular facts of your situation - for instance, whether you are a Texas resident and for how long, how you make money ad what you own, and whether the credit card company sued for fraud or just sworn account. Generally - here are the possibilitiies:

    The credit card company may sell the judgment to a collection company, who may re-sell it, etc.. Whoever holds the judgment has the following options:

    1) Abstract the judgment in the county where you own real estate to place a lien on any non-homestead property. If you have a second home or similar property, they may be able to sell. it.
    2) Execute on the judgment to seize non-exempt assets. This is unlikely for most people as Texas allows a homestead regardless of value (up to 10 acres urban or 100/200 acres rural) and an additional $30,000 in personal property (but not money in a bank) for a single person or $60,000 for a family.
    3) seek to garnish your bank accounts. This is unlikely unless you keep a large amount of money in that account.
    4) appoint a reciever - even more unlikley unless you own and run a business.
    5) file an involuntary bankruptcy if they can find enough of your other creditors and think you have been hiding assets.
    6) Send out post-judgment discovery requests, in which you will have to disclose your assets.

    Your options:
    1) do nothing and let the creditor get frustrated. They will probably pester you. They have 10 years to collect on the judgment and they may renew for another 10 years.
    2) do nothing, wait for the collection companies to get frustrated, and negotiate a lower one-time payment to discharge the debt (this deal should be in writing, however).
    3) file bankruptcy and discharge the debt along with all other unsecured debts. Bankruptcy should only be considered as a last resort - after discussing your options with an attorney who represents you. No matter what you do, you should call a good consumer debtor attorney in your area to discuss your options and NOT a credit counseling service until advised to by your lawyer.

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