J. Russell Jackson

Advantages of Chapter 13

Chapter 13 offers individuals a number of advantages over liquidation under chapter 7. Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time. Nevertheless, they must still make all mortgage payments that come due during the chapter 13 plan on time. Another advantage of chapter 13 is that it allows individuals to reschedule secured debts (other than a mortgage for their primary residence) and extend them over the life of the chapter 13 plan. Doing this may lower the payments. Chapter 13 also has a special provision that protects third parties who are liable with the debtor on "consumer debts." This provision may protect co-signers. Finally, chapter 13 acts like a consolidation loan under which the individual makes the plan payments to a chapter 13 trustee who then distributes payments to creditors. Individuals will have no direct contact with creditors while under chapter 13 protection.

Chapter 13 Eligibility

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual's unsecured debts are less than $336,900 and secured debts are less than $1,010,650. 11 U.S.C. § 109(e). These amounts are adjusted periodically to reflect changes in the consumer price index. A corporation or partnership may not be a chapter 13 debtor. Id.

An individual cannot file under chapter 13 or any other chapter if, during the preceding 180 days, a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court or was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 13 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

How Chapter 13 Works

A chapter 13 case begins by filing a petition with the bankruptcy court serving the area where the debtor has a domicile or residence. Unless the court orders otherwise, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a schedule of executory contracts and unexpired leases; and (4) a statement of financial affairs. Fed. R. Bankr. P. 1007(b). The debtor must also file a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling; evidence of payment from employers, if any, received 60 days before filing; a statement of monthly net income and any anticipated increase in income or expenses after filing; and a record of any interest the debtor has in federal or state qualified education or tuition accounts. 11 U.S.C. § 521. The debtor must provide the chapter 13 case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case (including tax returns for prior years that had not been filed when the case began). Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302(a). (The Official Forms may be purchased at legal stationery stores or downloaded from the Internet at www.uscourts.gov/bkforms/index.html. They are not available from the court.)

Source USCOURTS.GOV

Right now, I cannot pay my debts. Besides bankruptcy, do I have any options?

Yes, there are alternatives that you may use to take care of debts that you cannot pay. Creditors might be willing to settle their claim for a smaller cash payment, or they might be willing to stretch out the loan and reduce the size of the payments. This would allow you to pay off the debt by making smaller payments over a longer period of time. The creditor would eventually receive the full economic benefit of its bargain.

Occasionally, you may "buy time" by consolidating your debts; that is, by taking out a big loan to pay off all the smaller amounts of debts that you owe. The primary danger of this approach is that it is very easy to go out and use your credit cards to borrow even more. In that case, you end up with an even larger total debt and no more income to meet the monthly payments. Indeed, if you have taken out a second mortgage on your home to obtain the consolidation loan, you might lose your home as well.

Source- American Bar Association

Jackson Law, LTD

" Dedicated to providing clients with attentive

representation, sound legal counsel,

and aggressive advocacy."

Newsletter-March 2009

Jackson Law, Ltd.

I like to think that I'm a pretty smart guy. After all, I'm a lawyer, with years of education and experience under my belt, and a growing practice where people come to me for legal advice and help with their problems. Although that may seem impressive, I do not think I have yet attained the level of common sense still exercised by my mother, Mary Jackson.

A few weeks ago, after she received the first edition of our Jackson Law, Ltd. monthly newsletter, Mom offered a few complimentary words regarding the concept and the content, however, she wasted no time in cutting right to the chase; "Every month? You're writing it yourself? How are you going to find time to do that?" "Oh don't worry Mom," I responded, in a self assured tone, "It's really not that bad once you get started." Well, the operative concept in my response is "once you get started." Ever since that exchange, the wisdom and insight of my mother's comments have only grown.

The reality is, despite our best intentions, putting out a small monthly publication has turned out to be a lot more work than we originally anticipated, and like any other worthwhile endeavor, requires a great deal of time, discipline and planning. So although our March edition of the newsletter is reaching all of you a little behind schedule, we are working out the wrinkles and will continue to be committed to providing our clients and friends, a monthly source of good information.

In this edition, our featured articles focus on important aspects of personal injury law and landlord-tenant law, specifically addressing the manner in which they are treated in Rhode Island.

So read, enjoy, and never forget that Mom is almost always right.

J. Russell Jackson. Esq.

SURVEY RESULTS- Jackson Law conducted an on-line survey that was sent to local Realtors. We asked questions regarding their opinion on a variety of subjects they ranked as most important to them and their clients. The results below tell us that we are on the right track and Jackson Law will continue to improve our services through our staffing and technology to deliver a positive and professional experience to all clients.

LEGAL HOTLINE EVENT

This event was literally Off the hook! On the evening of February 9, 2009 we opened our telephone lines for a Legal Hotline, to answer questions and assist callers with their pressing legal issues.

The response was great and we covered the gamut from Real Estate to Foreclosure to Bankruptcy. Feedback has been positive and we look forward to holding more of these events in the future.

Send an e-mail to JacksonLawinfo@Gmail.com

To receive updates about future Jackson Law events.

Non-Resident Property Owners Beware!

Rhode Island law can be unforgiving to non-resident owners of real estate. Aside from the burdensome tax liabilities which can accrue to out of state property owners at the time of sale, these investors face other ongoing challenges

relating to their real estate ownership in Rhode Island. One issue that constantly seems to pop up when I deal with Realtors, out of state owners, and tenants, relates to the statutory requirement for the designation of an agent for

service.

R.I.G.L. § 34-18-22.3 mandates that a non-resident landlord designate and continuously maintain a resident agent for service. The designation must not only indicate the agent, but also the specific properties designated. Furthermore, the designation must be in writing, and shall be submitted to the secretary of state and the clerk of each town where property is located. Standard forms can be downloaded from the RI Secretary of State's website, at http://www.sec.state.ri.us/corps. This all sounds easy enough, but believe me when I tell you that many owners simply neglect to complete these simple steps. Such an omission can prove very costly.

As a penalty for those owners that fail to comply with the designation requirements, R.I.G.L. § 34-18-22.3, provides a stiff penalty.

"If a landlord fails to comply with the requirements of this section, rent for the dwelling unit abates until

designation of an agent is made and the landlord shall be subject to a fine of up to five hundred ($500) dollars per violation, payable to the municipality."

Aside from the fine, even more devastating to the owner is the fact that this statute allows for the abatement of rental payments. In other words, the tenant simply does not have to pay rent until an agent is designated! Lawyers in Rhode Island have successfully argued that the owner's failure to properly file the designation serves as an absolute defense for the tenant in an eviction action. This omission can truly serve as a weapon for a non-paying tenant and totally complicate and frustrate a landlord's efforts to move forward with an eviction.

Although I usually represent landlords, I recently represented a tenant who was being evicted in Newport by her out of state landlord. The landlord had owned the property for years, but had never taken the time to properly file the designation forms. Based on this failure, I filed a Motion to Dismiss on behalf of my client and used it to successfullynegotiate the favorable terms of her eventual surrender of the premises, together with the landlord's waiver of months of past due rent.

These cases raise an interesting proposition which out of state landlords should find very frightening; In addition to serving as a valid defense, does the landlord's failure to file the designation which triggers the statutory provision for the abatement of rent, create a cause of action for the tenant to recover past months rent which were paid, during a time when there was arguably no legal requirement to do so? That's one legal issue I would prefer not to be on the wrong side of. At the end of the day, completing and filing the necessary designation is very easy, and can quickly be accomplished with the assistance of a local property manager, Realtor or attorney. Ultimately, it is a small price to pay as a property owner to ensure that your tenant is not given the opportunity to utilize the Rhode Island Residential

Landlord Tenant Act as a sword, and not a shield. _______________________________________________________________________________________________

Quote of the month

Only when the tide goes out do you discover who's been swimming naked.

- Warren Buffett

Recommended

Reading:

The E Myth Revisited:

Why Most Small Businesses Don't Work and What to Do About It

By Michael E. Gerber

This book is a must, for any small-business person, or foranyone just thinking about starting a business. Gerber reminds us that simply knowing how to do the work of the business, or as he describes it, being a good "Technician," does not translate into operating a successful and profitable business. To achieve success, the business owner must come to terms with theirinner "Entrepreneur," "Manager" and "Technician" in a balanced way that allows them to dedicate the necessary time and energy to work "on" the business and not just "in" the business.

I wish they taught these concepts in law school!

The IRS Niche:

This past December the IRS announced a two-year test program for certain Offer in Compromise (OIC) cases. Generally speaking an OIC is an agreement with the IRS, which enables the taxpayer to pay a lesser amount in full satisfaction of an unpaid tax liability. In an effort to bring a quicker resolution to some of these cases, the IRS is trying out post appeals mediation and arbitration programs. Under the mediation program, either the taxpayer or Appeals division of the IRS may request non-binding mediation, however the taxpayer retains the right to decline a request for mediation by IRS Appeals. Binding arbitration will also be available, if both the taxpayer and the Appeals division agree. This represents a real opportunity for certain taxpayers to achieve an appropriate disposition of their case in a much more efficient way. After the two-year test period, the effectiveness of these alternative dispute resolution methods will be evaluated by the IRS.

Jackson Law, LTD.

26 Valley Road, S. 203 Middletown, RI 02842 401.848.7979

Jackson Law, LTD

" Dedicated to providing clients with attentive

representation, sound legal

counsel, and aggressive

advocacy."

-J. Russell Jackson, Esq.

Not your typical newsletter.

Jackson Law, Ltd.

I am pleased to present the first edition of our Jackson Law, Ltd. monthly newsletter. When I first committed to the concept of connecting with our firm's clients and friends on a consistent basis through this media, I was a little hesitant about how this would all work. I personally receive a slew of newsletters from fellow professionals, and although most are informative, I must say that I know exactly what to pick up if I'm having any trouble falling asleep at night! The truth is, most newsletters from legal, financial and other professionals are technical and boring. This is because they are probably canned industry formatted newsletters that simply have the name of the firm slapped on the top. When I decided to move forward with this endeavor, I knew that we were going to do things differently. I figured I owed as much to my friends and clients that have been such an integral part of the success of the firm over the years. So you have my word that our monthly rag will be a true production of the firm, for better or worse.

With that being said, each month we will be including information and articles relating to the areas of law in which we consistently provide services. Hopefully we can look at a number of important national and local topics from a more personal perspective, to examine the impact these issues may have on you directly. Above all it is our intent to provide helpful, interesting, and at times amusing information, to keep you up to speed and well informed on a variety of topics. So each month, we hope that you read a little, learn a little, and always keep us in mind if we can be of assistance. - J. Russell Jackson. Esq.

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Coming Soon!

THE ULTIMATE GUIDE TO ACCIDENT

CASES IN RHODE ISLAND By J. Russell Jackson, EsqTo receive a free e-copy please E-mail your request to -

Beth@JacksonLawltd.com

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Recommended Reading:

Crunch Point: The 21 Secrets to Succeeding

When It Matters Most

by Brian Tracy

Timely advice for personal and business crisis

Management..... JRJ

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The IRS Niche:

Dealing with the IRS can be a daunting and intimidating prospect for most people. In fact, many people who have tax issues with the IRS would probably prefer root canal over dealing with the IRS to get the problem resolved. Despite avoidance, procrastination, and wishful thinking on the part of many, tax problems don't go away by themselves.

This past October, I traveled to Denver to attend a two-day conference on IRS problem solving tactics. I look forward to continuing to hone my skills and represent clients in this growing practice area. I also look forward to providing great information in future newsletters about common problems and potential solutions when dealing with the IRS.

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Jackson Law

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