There is an exception to the attorney-client privilege for fraud. So, a discussion about hiding assets in a future bankruptcy is not going to be privileged. There are cases that state that the attorney-client privilege passes to the chapter 7 trustee upon filing bankruptcy but in general, these cases involve fraud on the trustee. I believe that, for example, if the debtor wants to discuss a criminal law issue on past acts where the discussion happens to arise in the course of bankruptcy interview, the conversation is going to be privileged.
Unless you already had property or a business here, you must live in Colorado for 91 days before you are able to file here. The Debtor’s Obligation to Turnover nonexempt property and the Exemptions of the Debtor. The primary duty of the debtor in a Chapter 7 bankruptcy proceeding is to turnover nonexempt property to the trustee. Colorado law provides that certain types of property are exempt from this turnover obligation.Homestead exemption Colorado exempts the real property, including a mobile home, manufactured home or house trailer that the debtor occupies up to $60,000. The exemption is $90,000 if the owner, spouse or dependent is disabled or at least 60 years old. Colorado law exempts the proceeds of the sale of homestead by the owner or by the sheriff for a period of two years if the debtor keeps the proceeds separate and apart from other monies so the proceeds can be identified.
Yes, your claim to ½ of the proceeds of the house as an equitable owner is supported by caselaw.
Yes, your claim is supported by caselaw.
Yes, the proceeds from the sale of your house for a Colorado resident are exempt for 2 years. The caselaw states that, you can convert the proceeds to a different form during the two year period. Of course, you must be able to document the conversion and properly trace the proceeds from their current form to their original form to the sale.
No, a non-debtor cannot an exemption in a bankruptcy case. You should only claim ½ of the equity as an asset given the joint ownership.
No, the property for a homestead exemption has to have some connection with real estate. Household goods. Colorado law provides for an exemption of up to $3000 for household goods used by the debtor or the debtor's dependents.
The caselaw states that guns do not constitute household goods when used as recreational items.
Yes, the statute was amended a few years ago to include computers.
Yes, there is old caselaw that distinguishes between recreational items and household goods; however, the statute was amended a few years ago to add home electronics items to the definition of “household goods”.
Probably, the statute provides that “musical instruments” qualify as household goods. Case law provides that the statute is to be interpreted broadly. So, in my opinion, a piano will qualify as a “household good” for purposes of the Colorado exemption. The “tools of the trade” exemption Colorado provides for an exemption of up to $20,000 for business-related property in a such as stock in trade, supplies, fixtures, tools, machines, electronics, equipment, books, business partnership property and other business materials. The property must be "used and kept for the purpose of carrying on any gainful occupation."
The caselaw states that there is a continuum used in analyzing the statute. A contractor can claim the exemption for his truck, but a lawyer cannot claim the exemption for transporting his briefcase in his vehicle.
The caselaw states that the mere creation of a separate entity does not render the debtor's claim of exemption to his tools and equipment improper.
I do not believe you can claim this exemption in these circumstances. In general, the caselaw limits this exemption to property involved in a “gainful occupation” and interprets the term “gainful occupation” to mean the principal work or business for which a person receives compensation or profit, not reimbursement.
The caselaw has a nonexclusive five factor test. The Court is essentially attempting to determine whether the debtor's tools and equipment is integral to his business and his fresh start.
This is problematic. The case interprets "gainful occupation" to mean the principal work or business for which the debtor receives compensation or profit. There was one case where the debtors were farmers and began trucking to save their farming business. There was evidence that the debtors wanted to return to farming full-time and had their children tend to the farm. They worked full-time in trucking but devoted their trucking income to pay the family bills and the farming bills. The Court allowed the claim of exemption. Note that this case is a very limited exception to the general rule that "gainful occupation" means the principal work or business for which the debtor receives compensation or profit.
The issue here is whether you have a "gainful occupation" even though you are currently losing money. Because the business is your primary business and you expect to be profitable in the future (or else you would not be doing it), the caselaw states that you can claim the exemption.
No, the caselaw states that the “tools of the trade” exemption is limited to personal property. Retirement Accounts Under federal law, debtors can protect “retirement funds to the extent those funds are in a fund or account that is exempt from taxation under section 401, 403, 408 (traditional IRAs), 408A (Roth IRAs), 414, 457, or 501(a) of the Internal Revenue Code.” Traditional and Roth IRAs are exempt up to $1,095,000 per person.Colorado law exempts ERISA-qualified benefits, IRAs, Roth IRAs, and section 401 plans.
With this amount of money, there is case law where the court allowed the retirement account exemption (which permitted the debtor to keep the retirement account) even where the debtor transferred the money right before filing. However, in the case, the court said that, if the sum was large enough, then the transfer may be considered a fraud on the creditors. Furthermore, there were certain facts in the case upon which the court noted
a)The debtor fully disclosed the timing and the source used to fund his IRA to his creditors and the Trustee in his Statement of Financial Affairs, schedules, and at his creditors’ meeting
b)There was no evidence that the debtor was being sued or threatened with suit at the time of the purchase, nor did he have any judgments pending against him
c)The debtor did not abscond, nor did he transferred property to others prior to filing bankruptcy
d)The Debtor did not borrow any funds to purchase the IRA
e) The funds in question could not be traced to a long-term investment, such as stocks or bonds, which at the last hour the Debtor decided to convert into an exempt asset
f) he maximized his exemptions on counsel's advice;
g)If the debtor would have waited until next year and spent the money, the creditors would receive nothing. Where the debtor has failed to properly disclose assets, the caselaw have denied the exemption to the debtor.
The holder of an inherited IRA may withdraw the entire balance of the account at any time—and for any purpose—without penalty. The Supreme Court has decided that inherited IRAs are not protected under federal law. The issue under state law has not been decided. I believe that, as part your pre-bankruptcy planning, you should spend the monies in your inherited IRA prior to filing bankruptcy.
In a recent case, the Court of Criminal Appeals held that a health savings account is not a retirement account, and denied a garnishment exemption.
Yes, the caselaw states that your tax refund is part of the bankruptcy estate, so you have turn it over to the trustee upon his request. In the case of partial tax year up to the date of filing, the refund is prorated and you will have to turnover the part of the refund for the year up to the date of filing.
The caselaw states that this calculation is straightforward. The trustee is to compare the debtor's actual tax return with the credit applied to a hypothetical return without the credit applied. So, the entire part of your tax refund attributed to the child tax credit is exempt.
The adoption expense credit is not refundable, so the amount is not exempt.
No, this issue has been litigated in the Supreme Court, and that Court held that this type of refund was property of the bankruptcy estate. This means you would have to turnover the property at the request of the trustee. Colorado does not have an exemption for this type of refund.
Under the case law, the answer is no.
The compensatory damages for your personal injuries will be exempt. But, under the caselaw, the punitive damages will not be exempt.
No, under the caselaw, this claim is not exempt. If you collect, you will have to turnover such proceeds to the trustee.
If there is no signed contract for the provision of personal services between Debtor and the liable party, the proceeds will not be exempt in bankruptcy.
If you have term life insurance, there is no cash value (only a face amount that you get if you pass). If you have whole life or universal life insurance, you may have a cash value portion of the policy (this is different than the face amount that you get if you pass). When you pay your premiums, part of the payment is a contribution to the cash value. The incremental increases in cash value during the four years prior to filing would not be exempt; only the cash value which is accrued four years prior to filing would be exempt. In my experience, most debtors who have life insurance have no idea what the cash value portion of their life insurance is. If you are planning to file bankruptcy and you have whole or universal life, you should contact your insurance agent to determine what is the potential amount that you may have to turnover to the trustee.
There is not an exemption in Colorado for a retirement annuity. The caselaw states that it does not qualify as life insurance.
If you file right now, the trustee will avoid your friend’s claim of a lien in bankruptcy. You/your friend should perfect the lien on the certificate of title before you file. Your friend will not be able to claim an equitable lien under the caselaw.
If the trustee asks, you should be able to explain your losses and show accounting documents on this issue. The failure to satisfactorily explain a loss or deficiency of assets - even for several years prior to the filing of the bankruptcy - can be a reason to deny a discharge.
The Bankruptcy Code provides there is no discharge of a debt for reasons including “fraud or defalcation while acting in a fiduciary capacity".
One case involved roofing supply creditors suing the president of a roofing company who filed bankruptcy for himself and his company. Before the bankruptcy, the debtor used proceeds from sales to pay off the oldest company debts rather than the roofing suppliers. Colorado law imposes a statutory trust on construction monies and requires that the suppliers and laborers be paid first. The district court held that “defalcation while acting in a fiduciary capacity” requires that the actor act with knowledge or reckless conduct. The court held the debt to be partially nondischargeable since the debtor misdirected funds after hiring counsel to negotiate a settlement.
