Straight Talking on The Law

Don't Pay for Oregon Family Law Forms That You Can Get For Free

By: Amy Velazquez,

Family Law Lawyer

Your most important asset isn't your car or your home. It's your family. You want to keep them safe and secure and healthy. That's why it's important for you to retain a qualified family law attorney whenever you have the misfortune to be involved in a dispute regarding Child Custody, Parenting Time, Legal Separation in Oregon, Alimony , or any other serious Oregon Family Law issue.

That being said, we understand that some people can't afford an attorney. In those cases, we suggest a non profit  firm that accepts clients on a sliding scale. You can also call the Oregon State Bar and ask about the modest means program for limited income clients. 

If you do chose to represent yourself, for whatever reason, you should think twice before you purchase legal forms from a "big box" store, or from some person who calls themselves a paralegal on craigslist, or from some generic website you found on the internet.

New Estate Tax Laws

By: Robert Harris

 Recently there has been congressional movement on the issue of the estate tax. The "Responsible Estate Tax Act, Senate Bill 3533." Has been introduced to the Senate.  In the United States House of Representatives, the "Responsible Estate Tax Act, House Bill 5764.", identical to the Senate bill, was introduced. The bills, in their present form, would provide a $3.5 million exemption per individual, with a progressive rate structure. The top rate would be 55 percent, and there would be a 10 percent surtax on billionaires. Here’s the bullet point press release from the sponsors. They say these bills would

•Exempt the first $3.5 million of an estate from federal taxation ($7 million for couples). This represents the same exemption that existed in 2009. This would mean that 99.75 percent of all estates would be exempted from the federal estate tax in 2011 alone.

What's Happening With the Federal Estate Tax?

  By: Robert Harris

You know that the federal estate tax law passed in 2001 provided that in 2010, there is no federal estate tax, but in 2011 it will  be reimposed at a 55 % tax rate on all estate assets exceeding 1 million dollars.

Congress has been debating what to do about this, and the Republicans and conservative Democrats in the Senate thought they had a deal to reset the federal estate tax credit at 5 million dollars with a tax rate of 35% above the exempt amount.

But the deal broke down, with more liberal Democrats demanding the credit be reset at 1 million dollars with a 55% tax above that amount.

I have taken several calls from clients who have appreciating assets in trust, asking what they should do. Do you terminate the trust now, forego the step up in tax basis so that your appreciating assets will be taxed at a capital gains rate? Or do you keep the assets in trust to take advantage of the step up in basis, and hopeing for the higher unified estate tax credit.

And what happens if Congress raises capital gains rates to 20%, or even gets rid of the capital gains rates all together and folds gains into earned income, as some Democrats advocate?

There's simply too many variables for anyone to know the best answer. And there's certainly no boilerplate answer. But if you have a trust, or a net worth over 1 million dollars, spending a few bucks on professional advice right about now would be a very good investment.

Rob Harris is the founder and President of Harris Law Firm, P.C. a firm focusing on the needs of families and their small businesses.

[email protected]

www.harrislawsite.com

Strategic Mortgage Default

   By: Robert Harris

With the local housing market still in a downward mode, more homeowners are calling me about strategic defaults on their home loan. A strategic default is where the borrower has the ability to pay the loan but decides not to because the home is worth less than the amount of the loan.

Businesses have engaged in strategic defaults forever. If a business can't pay its debts. It closes its doors, or tells its bank that it must reduce the loan, or they will walk.

For homeowners however, strategic default is a new option. Since home prices seemed to have historically either risen consistently, or at least stayed constant, there was little need for considering the a strategic default. However, with home prices having dived by 20% - 35%, there are a lot of homes that are worth much less than is owed on them. 

It's been estimated that as many as 20% of the current defaults on home loans are strategic defaults. And, studies show that when the home value sinks to 75% of the amount owed, people are more likely than not willing to consider a strategic default.

The federal government has very recently enacted a new program that appears to be directed right at people who are considering a strategic default. This program is as much, or more, to benefit creditors as it is homeowners, since the last thing a lender wants is a foreclosed home. Because if an owner does quit making payments, they can continue to live in the home until the foreclosure is complete, which can be as long as one year, and make no payments.

Before you consider a strategic default, you need to consider the benefits and the detriments. Yes, you can live "payment free" in your home during the foreclosure. Yes you can substantially reduce your overall debt. But a foreclosure will harm your credit score.

However, for someone who is $100,000 underwater in their home, it could be a good business decision to consider a strategic default. Many people would be willing to take a hit on their credit score if they could save $100,000.

Short Sales Information

By: Robert Harris

I Had coffee with an experienced realtor last week. (At my favorite coffee bar Insomnia Coffee in Hillsboro Oregon) We talked about the housing market (pretty good for homes under $275,000, but not so good for those more luxurious homes), foreclosures and short sales.

After our meeting he gave me what I think is some concise, valuable literature on short sales and foreclosures. If you're a homeowner, and in a situation where a short sale or foreclosure appears to be an option, you'll want to read these.

And, if you're looking to buy a short sale property, this information will educate you to the process and the hurdles that you may face.

Who is filing for Bankrutpcy?

 

By: Ryan Hacket,

      Attorney at Hackett and Harris, LLC.

What types of people file for Bankruptcy?

In 2008 over 1 Million Americans filed for bankruptcy protection.  I recently came across this interesting and colorful chart that broke down the demographics of these filers.

As you can see from the chart there is a broad spectrum of people who file bankruptcy.  When I tell my friends and family members that I am a bankruptcy attorney they always seem to assume that I help people who have nothing and are unemployed.  I always tell them that quite the opposite is true. Nearly all of my clients have jobs and many have assets, such as cars, homes, or other valuable items.  As the chart shows, only 13% of people who filed bankruptcy in 2008 were unemployed.

Debt Settlement Companies or Bankruptcy

By: Robert J. Harris

On today's MSN Money website, there is a great article called "10 Secrets of Filing for Bankruptcy". All the tips are valuable, but because this is a BLOG, and I know people reading this may have come here looking for bankruptcy alternatives, I want to focus on tip number 5.

                             "Debt Settlement Companies May do More Harm than Good"

Debt settlement firms offer to play hardball with creditors and whittle outstanding balances by as much as 75%. They bill their services as an alternative to bankruptcy, but in many cases they can hurt more than they help. Debt settlement firms are unregulated, for-profit entities that require regular payments before taking any action on a consumer's behalf. This business model works squarely against debtors' interests, says Walter Benenati, a bankruptcy attorney in Orlando who worked briefly for a debt settlement firm. "They're getting fees every month, so they have no incentive to settle (with creditors) as fast as possible," he says.

In fact, you don't need a middleman to negotiate with creditors. But, says Mariana Bekker, director of media relations for the United States Organizations for Bankruptcy Alternatives, a debt settlement trade organization, most debtors don't have the "time, stamina or desire" to do it themselves. Either way, you'll owe taxes on any amount saved on your debt. (That's right: The IRS considers forgiven debt taxable income.)

About a year ago, I had a representative of a "debt settlement company" call me and asked me to refer people to him. He told me if I did, he'd refer all his clients to me. He said that none of them ever complete their payment plans anyway, so I'd get a lot of work. Needless to say, I didn't do business with that gentleman.

Good, Accurate Bankrutpcy Information on the Internet? Good Luck

By: Robert Harris

As someone who spends a significant amount of time writing on legal issues, it is quite concerning to see so much incorrect and erroneous information about Oregon bankruptcy law on the Internet.  Consumers need to be aware of this.

 

I frequently do Internet searches on various bankruptcy topics and I am constantly amazed and disappointed at the extremely poor quality of the information on some websites. 

There are three main reasons why some online bankruptcy information is bad

 

Beware of Debt Consolidation Services

    By: Robert Harris

I just noticed that the 7th most searched for term on Google is 'Debt Consolidation". With the amount of debt load people are carrying, the rising unemployment rates, increases in the interest rates to home owners and credit card holders, its little wonder people are looking for ways to re-budget with lower monthly payments.

However, be aware that some of these debt consolidation services are ineffective, some give bad advice that benefits only them, and some are out and out scams.

If you're not able to pay your bills on time, before you sign on with a debt consolidation service, make an appointment with an attorney who deals in debt and bankruptcy. Most offer free consultations, so take advantage of that offer.

Just because you talk to a bankruptcy attorney doesn't mean you'll file for bankruptcy. But you should know your alternatives before you agree to make additional payments on debts you can ill afford.

To find out more about handling your debts, visit my website.

New Oregon Non Competition Agreement Law

By: Robert Harris

I was reviewing a non-competition agreement for a client recently, and it occurred to me that a lot of businesses hadn't yet caught up with the new Oregon law that went into effect January 1st, 2008.  Now a non-compete will be void and may not be enforced by Oregon courts unless certain steps are taken.

• The employer must inform the employee in a written job offer, at least two weeks before the fist day of employment, that a non-compete agreement is a condition of employment or if the agreement is entered into upon a bona fide advancement of the employee.
• The employee must be engaged in administrative, executive or professional work. They need to be performing intellectual, managerial, or creative tasks, as well as exercising discretion and independent judgment. The employee must also earn a salary or be exempt from Oregon's minimum wage and overtime laws.
• The employer has a "protectable interest" (employee must have access to trade secrets, sensitive, confidential or professional information).
• The annual gross salary and commission, at the time of termination, must exceed the median family income for a family of four.
• Finally, the term of the non-compete agreement must not exceed two years from the date of the employee's termination. The rule also contains a "savings provision" that may allow non-exempt employees to have an enforceable non-compete.

One of the biggest changes is that it is now essential that the notice of a non-compete be included in the original written offer of employment. This announcement must be given at least two weeks prior to the employee start date. If they are not informed before hire, you will have to wait until the employee receives a bona fide advancement before an enforceable agreement can be obtained.

The other big change is that non competes can only be enforced against employees doing administrative, managerial creative or professional work. This change was made because there were instances where for instance a parking lot owner in downtown Portland actually had his parking attendant sign a non-compete. Under former law that was enforceable. Under this new law it wouldn't be.

Employers should audit their practices and adjust accordingly. Particularly pay attention to the two week notice if you want to advance someone and have them sign a non-compete agreement.  And more importantly, before offering a non-compete agreement legal council should be consulted.

Robert Harris and Harris Law Firm provide Legal advice to businesses and individuals in the Portland Metro area, with offices in Hillsboro and Portland Oregon.