DEADLINE LOOMS FOR SMALL RETIREMENT PLANS

Don’t forget that certain small businesses which failed to timely file required retirement plan returns in recent years have only until June 2, 2015 to take advantage of special penalty relief offered last year via Revenue Procedure 2014-32.

The relief offered under this Revenue Procedure is only available to the plan administrator or plan sponsor of (1) certain small business (owner-spouse) plans, and plans of business partnerships, and (2) certain foreign plans.

That Feeling of Being # 755,632 in Line for a U.S. Green Card

immigrant-children-ellis-islandOne of the least well understood aspects of U.S. immigration law is the visa “preference” system. The underlying issue is easy to understand: In certain categories where a family and employment relationship qualifies a non-citizen for a green card, the number of green cards (“immigrant visas”) that can actually given out per year is capped by law.

For example, only 23,000 visas are available annually to the unmarried sons or daughters of a U.S. citizen who are over age 21, only about 114,200 to the spouses and unmarried children of U.S. permanent residents (green card holders), and so on. The trouble, of course, is that many more people qualify for, and want, U.S. green cards than there are visas available. There’s always a waiting list, and it’s getting longer every year.

That’s where it gets difficult. Just how long the waiting list is getting is usually obscured by the way the U.S. government manages it. Instead of handing out numbers like my local U.S. Post Office does, it gives everyone a “Priority Date,” based on the exact day when their U.S. family-member or employer (called the “petitioner”) sent in the visa petition that starts off the application process.

Waiting would-be immigrants learn to check the State Department’s Visa Bulletin to see whether their Priority Date has appeared on the list yet. Only when they see it there can they move forward with applying for a visa — and until their date comes up, it’s difficult to guess how long the wait will be.

That’s why it’s so eye-opening to see actual numbers of how many people are in line. And the U.S. State Department just published these numbers for last year. If you’re over 21 and waiting for a visa through your U.S. citizen parent, guess what: 314,527 other people are waiting for the exact same thing. Hopefully your petitioner didn’t apply for you last week.

But you might feel better when you hear how many people are waiting for one of the 65,000 visas available annually to brothers and sisters of U.S. citizens. The total has reached 2,455,964. Some people in that category have been waiting for a visa since 1991. Unless, of course, you’ve also got a family member who’s in that category, still waiting. It sort of makes a hash of the “family reunification” that’s supposed to be the underlying principle at work here.

Supreme Court Puts Limits on (Dog) Sniffing Around

In 2012 a Nebraska police officer pulled over a motorist for driving on the shoulder of a highway. The officer had his trained K-9 in tow. In the course of the stop, the officer spoke with both the driver and the passenger, took information from them, and ran warrant checks.

The officer was suspicious, but didn’t seem to have any objective indication that anything other than a traffic violation was in the air. He called for a second officer, then issued and explained a warning ticket to the driver.

After issuing the ticket (about 20 minutes into the encounter), the officer continued to detain the men. His colleague arrived on scene; the officer then walked his dog around the vehicle twice. This was about seven or eight minutes after he had issued the ticket.

The dog found drugs.

The U.S. Supreme Court considered these facts in a decision this month. The majority acknowledged that dog sniffs during lawful traffic stops are legal under the Fourth Amendment to the federal Constitution. But it explained that an officer needs reasonable suspicion to prolong a traffic stop for a dog sniff. (Rodriguez v. U.S., 575 U. S. ____ (2015).)

If the dog sniff occurs during “the time reasonably required to complete” the stop’s “mission,” then it’s okay. Checking the driver’s license, registration, and proof of insurance, and running a warrant check are part of a traffic-stop mission. But once the traffic-stop tasks are or should be complete, an officer can’t continue to hold a driver. Whether the dog sniff happens before or after the officer issues the ticket, the sniff is illegal if it adds time to the stop.

The Supreme Court explained this rule, then sent the Rodriguez case to a lower court for a determination of whether the officer had reasonable suspicion that would justify the extended detention—reasonable suspicion of something other than the traffic infraction. Without that suspicion, the drugs the dog unearthed would be inadmissible in court.

The bottom line: Officers can’t drag out your average roadside detention in order to get a dog to sniff around your vehicle.

Should I Vacate a Money Judgment, Settle the Judgment, or File for Bankruptcy?

Leon Bayer PhotoASK LEON 

Bankruptcy  expert  Leon Bayer answers  real-life questions.

Dear Leon, 

I have a credit card judgment against me for $20,000. I am trying to improve my credit and am wondering what to do. Should I try to vacate the judgment, settle with the judgment creditor, or file for Chapter 7 bankruptcy? 

Here are the facts. I did default on payments for the credit card that is the subject of the judgment.  However, I can prove that the judgment creditor did not properly serve me with the lawsuit. I also have lots of other old credit card debt, but the statute of limitations for suing has passed on those and they will fall off my credit report in a year. 

I spoke to Lawyer #1 who will charge me $2,000 to represent me in a motion to vacate the judgment based on the fact that I was never properly served with the lawsuit. He feels I have a good case for that to be granted.  

I spoke to the lawyer for the judgment creditor. The creditor will take $8,000 as a full settlement of the judgment. I have enough money to do that, but then the judgment (even though paid off) will remain on my credit record for many years to come. I’d like to avoid that. 

I spoke to Lawyer #2 who will charge me $2,000 to represent me in Chapter 7 bankruptcy. The bankruptcy will damage my credit, but save me $6,000. 

What’s the best course of action to improve my credit?  Vacate the judgment? Settle the judgment? File for Chapter 7 bankruptcy?  

Yours truly, 

Alfred

Dear Alfred,

Your best course of action might be to settle the judgment for $8,000 and get the judgment creditor to agree to try to vacate the judgment as part of the settlement (perhaps by kicking in a little more money). If you just vacate the judgment, you’ll eventually be back in the same boat you are in now – owing a judgment. And if you file for bankruptcy, that will remain on your credit report for ten years.

Below are details on each of these options.

Vacating the Judgment

Winning a motion to vacate the judgment doesn’t mean you’ve won the underlying lawsuit. It just means that you now have an opportunity to answer the lawsuit and fight it in court. But if you owe the money that is the subject of the lawsuit, it’s reasonable to assume that you will eventually lose the case and have a judgment entered against you. On top of that, you’ll be out an additional $2,000 for the fees you paid your lawyer. For this reason, vacating the judgment is probably not a good strategy.

Settling the Judgment

I agree with your credit concerns about settling the judgment for $8,000. The judgment will stay on your credit report for ten years. Even if your credit report shows that you paid it, the damage is done. (Learn how long negative information will remain on your credit report.)

Filing for Chapter 7 Bankruptcy

Chapter 7 bankruptcy is cheaper than settling, since you’ll pay just $2,000 to your lawyer rather than $8,000 to the judgment creditor. However, bankruptcy, like a judgment, will stay on your credit report for ten years.

How long ago was the judgment entered against you?  If it was entered some time ago, then it will fall off your report sooner than will a bankruptcy. (For example, if the judgment was entered five years ago, it’ll come off your report in five years. If you file for bankruptcy today, it’ll come off your report in ten years.)  If that’s the case, the bankruptcy will damage your credit for a longer period of time than will the judgment.

A Fourth Option: Get the Creditor to Vacate the Judgment as Part of the Settlement

Here’s another idea to try. Tell the plaintiff’s lawyer that you’ll settle the judgment for $8,000 but that as part of this settlement the creditor must:

  • make a good faith effort to vacate the judgment, and
  • if successful, dismiss the lawsuit.

If it all works out, the debt will be resolved and you won’t have a judgment on your credit report.

The creditor’s lawyer will be reluctant to agree, because this route will require extra work. So be ready to sweeten the deal and make it worth the lawyer’s time. Offer more money, say $1,000, to cover the creditor’s expenses incurred in making the motion to vacate the judgment and dismissing the lawsuit. If successful, the extra money you pay will be a drop in the bucket compared to the benefit you’ll get for your improved credit report.

Other Considerations When Settling a Debt

Here are a few other things to think about when settling the judgment.

Bon voyage on your quest for good credit!

– Leon

Leon Bayer is a Los Angeles bankruptcy attorney.  He is a partner at Bayer, Wishman & Leotta, a California law firm specializing in bankruptcy.  The opinions and advice in this blog post are from Mr. Bayer alone, and should not be attributed to Nolo.  By answering a question on this blog, Mr. Bayer does not become your lawyer.

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What Is Curb Appeal, Anyway?

butterflySpring is officially here, and the real estate market is responding just as it’s supposed to. Home prices are up across the United States, even reaching new highs in some areas. (Go, Colorado!)

Home sellers who’ve decided that now is the time to sell are, among other tasks, sprucing up their front yards in search of that elusive selling factor known as “curb appeal.”

What exactly is “curb appeal,” and how important is it in selling your home? The late, great real estate journalist Broderick Perkins called it “the first impression your home conveys to prospective buyers,” which “should arouse shoppers’ desire to own the home and entice them to cross the threshold.”

Crossing the threshold is a big deal, apparently. As Washington real estate agent Patricia Wangsness told me, “If the home doesn’t look good from the outside, buyers don’t want to get out of the car.” Many real estate agents have described the same experience.

That raises the question of what goes into making a house look “good.” A Coldwell Banker checklist of ways to improve curb appeal breaks it down into such categories as:

  • paint and siding
  • other parts of the home exterior, such as gutters, front door, and windows
  • flower beds, and
  • lawn.

In other words, it’s not just one thing, like landscaping, but a combo platter. Folks who like to measure things, and ask questions like, “What financial difference will it make if I invest in making my home’s exterior look better?” should not expect easy answers.

For instance, while a study by Clemson University reportedly found that upgrading landscaping from “good” to “excellent” could add 6% to 7% to a home’s value, a home with great landscaping could still have lousy curb appeal if the shingles and gutters were falling off.

Texas real estate agent Greg Nino confirms, “A home’s overall value can be raised, lowered, or destroyed depending on curb appeal” and related factors, but the exact difference is “impossible to quantify by percentage.”

Perhaps it would help to think of it as a combination of maintenance and aesthetics. The latter lures buyers in, while the former assures them that they’re not taking on a fixer-upper. Massachusetts real estate agent Nancy Atwood explains that curb appeal can be critical to home buyers who “feel that folks who take care of the outside of their home are more apt to do critical updates on the inside. So when they do drive by’s on homes, if the outside looks messy, unkempt or neglected, they tend to avoid those homes.”

When you come right down to it, the concept of curb appeal has a lot in common with that of judging a book by its cover—in both cases, the insides may be better than buyers expect, but that first impression is hard to shake. It may end up being the only impression.