Your situation under current laws

The conditions that made your debt unmanageable could persist after bankruptcy, but after your bankruptcy case you will be barred from filing again for a number of years. For instance, your debts cannot be discharged with a Chapter 7 case if you received the same discharge within the previous eight years. So if you have ongoing medical expenses, for example, you might get your current debt discharged by filing now, but you cannot get relief from your new expenses for a long time. If you are pregnant or expecting significant medical treatment soon, filing immediately may be a mistake.

What happens if you expect to receive an inheritance soon? If you inherit property within 180 days after your bankruptcy filing, it automatically becomes property of the bankruptcy estate, meaning it can be sold off to pay creditors. This is the case even though it might take years for your inheritance to be distributed from your deceased relative’s estate. If you inherit while paying into a plan for a Chapter 13 bankruptcy, you may have to adjust your plan and make higher payments. If the inheritance is large enough, it could have helped you avoid bankruptcy in the first place.

New options may come from new laws

Congress continues to react to the economic crisis that deepened in 2008, and we are in the midst of a transition between presidential administrations. There are new laws affecting consumer debt, and we will see more this year. The HOPE for Homeowners Act came into effect last year to give homeowners facing foreclosure a chance at refinancing their mortgage loans, but it requires their current lenders to be willing to accept 90% of the appraised value of the house. It is not clear yet how many homeowners may have this option.

Currently, both houses of Congress are considering legislation that would allow homeowners to have terms of their mortgage modified in bankruptcy, something that cannot be done under the current law. This bill is called the Helping Families Save Their Homes in Bankruptcy Act of 2009, but Citigroup has been involved in the negotiations, so we do not know where this proposal will end up. There could be an advantage in waiting to file for bankruptcy until after such a law is in effect, though it could come with costs that do not apply now.

Making your decision

These are just some reasons why you should carefully review your situation and explore your options with a bankruptcy lawyer. You should also seek help from financial or housing counselors, consider debt management options, and determine whether your creditors are willing to negotiate or settle. However, be careful of offers from services that sound too good to be true because they can get you even deeper in debt.

On the web:

• Nolo’s Bankruptcy & Foreclosure Blog
• Bankruptcy Law Network

Administrative dissolution

Remember that your corporation or LLC is not something that you created. It is a legal entity created by the State of Georgia. If you don’t follow Georgia’s rules, the state will dissolve your entity. If your annual registration is more than 60 days late, the Secretary of State can start the legal process of dissolving your entity. It can also be dissolved for failure to notify the Secretary within 60 days that you have changed your registered office or registered agent (or if you have not had an office or agent in the state for that long). A corporation can also be dissolved for not filing a license or occupation tax return within a year after it was due.

As you can imagine, it is quite a problem to wake up one day and no longer own a share of the company that you thought you had because it no longer exists. It technically does exist, but only in a state of limbo. When a corporation or LLC is dissolved, the owners have a duty to wind up its business affairs. This means that the assets need to be sold off or transferred and all the debts settled. If you are blissfully unaware of this dissolution — perhaps because you told everyone but the government where your new office is located — you will begin incurring personal liability for continuing to do business as usual. New business conducted is essentially done on behalf of the owners in their personal capacity rather than corporate capacity. Let’s not even get into the potential tax problems.

The liabilities resulting from doing business through a dissolved corporation or LLC are not all very clear. Who is responsible for a new loan? What happens to the real estate owned by the former legal entity? You may take the position that a certain debt is a corporate liability whereas a creditor would say that you are now personally liable. These answers require legal conclusions that can only come from a judge if you and other parties cannot agree what should happen. Now you are facing the prospect of litigation (and you may not be able to agree with the other business owners who is responsible for attorney’s fees for getting everyone out of this mess).

Changes of addresses, officers, and agents

You have a very strict duty to keep your information updated with the Secretary of State. This is important because lawsuits can be filed against you, and you have a duty to answer them or suffer the consequences of a default judgment. Without discussing all the ways that your corporation or LLC can be served with notice of a suit, let’s consider a worst-case scenario.

Normally the registered agent for your corporation can be personally served with a lawsuit. If your registered agent cannot be found because you do not have one or the address with the Secretary is out of date, then your corporation can be served by certified mail. Now if that address is out of date, guess who the plaintiff can serve next? The Secretary of State herself. And since you have not kept her office updated, you cannot count on her to let you know that you have been sued. Then you could suffer a default judgment.

It does not matter if the plaintiff knows where you really are and could make sure you know about the lawsuit. The plaintiff has no duty to look you up in the phonebook or search Google. Georgia courts have determined that your company, however, has a strict duty to keep its entity registration up to date. A default judgment could wipe out your business — and your personal assets could also be wiped out if your entity is dissolved and no longer limiting your liability.

The takeaway

Your annual registration for your LLC or corporation is due by April 1 to the Georgia Secretary of State. It costs $30 and can be paid by credit card online. You should update your information at this time and at any other time your registered agent, addresses, or officers change. Failure to make these updates can jeopardize your livelihood.

I hope that you manage your business well and found this article a little patronizing. Unfortunately, many business owners think that the Secretary of State just registers a name and bothers them with trivial clerical tasks each year. If you had a lawyer organize your entity, make sure she is checking with you soon to file your annual registration. If you do not know the status of your registration, you can find it online. If you are unsure of how to list a registered agent or other information, you may need legal advice for your situation.

On the web:

• Georgia Secretary of State Corporations Division
• Georgia Secretary of State Corporations Search (view your registration)

A worksheet is used for the process of child support calculation. The gross income of each parent is entered, then each income is adjusted based on self-employment taxes and obligations to other children whether or not covered by another support order. These adjusted incomes are added to make a combined income figure and compared to a table to find the basic child support obligation that both parents owe to the child.

Once the basic support obligation is found, the worksheet calculates each parent’s share of the obligation. The share is expressed in terms of a percentage which is the same percentage to which that parent’s income contributes to the combined income. Now that we have each parent’s share, we can see what each parent owes to the child to add up to the basic child support obligation, and the noncustodial parent would pay his or her share to the parent with custody of the child.

But there is more to add. The worksheet next includes the costs of health insurance as well as child care made necessary by the custodial parent’s employment. These expenses are also prorated (just as the basic support obligation was prorated) and added to the shares of the basic support obligation. Now we have the real amount that each parent is presumed to owe to the child, and the noncustodial parent pays the custodial parent.

The real world is more complicated, of course. Deviations from these amounts can be entered on the worksheet, and the court must determine if these deviations apply to consider them for the actual amount of child support payments ordered. Possible deviations might take account of whether a parent’s income is particularly low or high, vision and dental insurance, alimony payments, extraordinary expenses, parenting time, and other deviations. Parenting time is a consideration of how much visitation time the noncustodial parent has with the child, meaning that with more visitation his or her payments to the other parent will be lower.

Finally, health care expenses not covered by insurance are considered on the child support calculation worksheet in a special category, and again we are looking at prorated shares. These expenses will not be part of the regular support payments, but they are to be paid when the actual expenses are due.

Accuracy

Completing the worksheet accurately requires a special effort to gather documents. Both parents need to gather their pay stubs, tax records, and documents that show other types of income and benefits. It may be difficult to keep track of records of various expenses, but this paperwork may be required to convince the court to apply deviations that a parent may ask for.

Special Problems

One common problem is that a parent may not produce enough of his or her income. With no evidence, this parent could have income imputed for purposes of the calculation, an assumption that the parent earns minimum wage for forty hours per week. But the other parent can ask the court for more time to gather evidence if he or she believes that this parent actually earns more than minimum wage. If the case involves a modification to a previous child support order and the paying parent refuses to provide documents, the court can assume that this parent’s income has been increasing ten percent each year.

Another problem is where the parent who is to pay child support is unemployed or earning less income than he or she should be able to earn. The court can actually consider this possibility and determine whether the parent’s decision not to pursue a better paying career is reasonable in light of the obligation to support his or her child. The parent’s education and actual employment history can be considered, and the court can order child support payments based on assuming a higher income for this parent.

There are also many cases in which a parent is working but earning a low income that makes it difficult to pay child support or provide for the child when receiving child support. If a parent makes less than $1,850 per month, he or she can be given a self-support reserve of $900 per month for purposes of income calculation (which is an adjustment to income). However, this process has limits to ensure that the child will be provided with food, clothing, shelter, and other basic necessities.

There are many other factors that can be considered in child support calculations, so a lot of information and documents need to be considered. The child support guidelines provide considerable guidance to courts looking at these factors.

On the web:

• Ten Basic Steps of Calculating Child Support (PDF presentation)
  
• Step by Step Process of Calculating Child Support in Georgia (PDF)
• Georgia’s New Income Shares Child Support Guidelines