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Wednesday, April 30, 2014

Judge Rules Fiancee Dumped via Text Keeps Her Ring!

Last week a New York Supreme Court judge made a controversial ruling in a matrimonial case in which an upstate man decided to call off his wedding with his fiancée by text message. The judge ruled that the woman would get to keep her 2.97 carat diamond engagement ring, valued at over $50,000, despite New York's established legal precedent that grooms have a right to the ring back if the wedding does not place, regardless of which party got cold feet (you can find more information about that in my Love and Warfare blogpost found here.

In this particular case, the groom texted the bride to call off the wedding. When the bride protested about the method of the breakup, the groom replied by saying "Plus you get a $50,000 parting ring. Enough for a down payment on a house." This statement came back to haunt the groom when the Judge ruled that his statement counted as a formal acknowledgement that the ring was a parting gift intended for the bride to keep.

Stories like this drive home the potential dangers of technology when dealing with legal matters. You should keep in mind that things that you say in text messages, Facebook updates, tweets and an array of other forms of instant communication can and potentially will be used against you in Court. You can read the letter I give to clients about smart social media usage here and find more information on how social media can affect your divorce here.

Thursday, April 24, 2014

Get the Right Lease When Leasing Commercial Real Estate

The process of purchasing commercial real estate, especially for the first time, can be overwhelming. The first step is finding the ideal property, one that suits both your business needs and your financial resources. The next step is drawing up the right lease. When purchasing commercial real estate, as with any other major financial transaction, I strongly recommend you retain the assistance of an experienced attorney.

The details of your lease agreement will be very important for your financial future. These details can save or cost your business thousands of dollars annually, so it is vital for you to look over every section of your lease agreement with care. Below, I am listing some items you and your attorney should consider before you sign your new lease. 

- What space are you renting?
The lease should clearly define the parameters of the space you will be leasing, including a site plan. A lease that is not clear in delineating what your property can lead to future costly Landlord/Tenant disputes. A common issue of contention is common areas and their maintenance. Most leases will hold Tenants responsible for at least some of the cost of maintenance of common areas, make sure 

- What is your rental rate and how is it calculated each year?
Your lease should state not only your rental rate, but how much it will increase each year, whether that is determined by a formula or simply a flat rate. 

- Do you have an "Exclusive Use" clause?
In commercial real estate, renters are commonly given an "Exclusive" if their property is located in a shopping mall or other commercial area. An "Exclusive Use" clause gives you the right to be the only business of your particular type in the commercial area owned by your landlord. An "Exclusive" can ensure your new business wont deal with direct competition and save you money in the process, so make sure you consult your attorney if these rights are not mentioned in the initial draft of your lease. 

- Does the lease include a "Personal Guarantee"?
A "Personal Guarantee" is a clause in your lease that holds you, as the renter, personally liable for the rent if the business is not able to pay it. Personal Guarantee clauses have become increasingly common in the past few years, but this does not mean you have to outright accept them. If signing a Personal Guarantee makes you uncomfortable, you can ask your attorney to revise it to cover only a set amount of time, for example the first two years of the lease.

- Does the lease permit subleasing?
A lease that permits the renter to sublease the space can be a big advantage to renters, especially if you signed a Personal Guarantee. Subleasing rights allow the renter to lease out the property and cover rent costs if difficulties arise. 

You and your attorney should consult on each of the above topics before you sign your new lease agreement. Good luck! 

Thursday, April 17, 2014

What Business Owners Need to Know About Hiring Employees and Background Checks

One of the most difficult facets of running a business as a small business owner is finding and keeping the ideal employees. One aspect of this is the background check. Background checks are often necessary to ensure that potential employees are honest, stable and/or have the necessary prerequisites for the job. Although employers have the right to freely require a background check for employees in New York and New Jersey, there are some regulations that small business owners should be aware of.

According to the new federal guidelines, employers are no longer legally permitted to issue a blanket "no" if the applicant in question has a criminal record. Instead, employers must determine if the record will have any effect on the applicant's suitability to the job.

The other important set of regulations to keep in mind when hiring is the Fair Credit Reporting Act. The FCRA delineates the rights consumers have to protect their credit and other personal information. The FCRA clearly states that businesses must have a "permissible purpose" in order to pull credit information while hiring. This information is important because there has been a recent uptick in lawsuits pertaining to potential FCRA violations. If you are a small business owner and are unsure whether or not you have legal permission to request a credit report, you should consult an attorney with experience in labor issues. Again, you should have a clear reason for requesting a credit report before you do so. This reason must be pertinent to the job in question.

Remember, any violations of the federal guidelines will result in monetary penalties for your growing business. The avoidance of fines and lawsuits could make the difference in the success or failure of your business.

If you have any questions or concerns about the hiring process, feel free to contact my office at (718) 313 - 7563.

- Kevin P. McKernan

Wednesday, April 16, 2014

Purchasing a Home? Here's a Few Tips

Purchasing a home, especially for the first time, is an important financial decision. Choosing a fix-up property can oblige you to extensive renovations and/or costly repairs while

1. Evaluate your finances.
It's standard to review your finances so you have some idea of the budget you'll be working with as you search for a house. However, it's also important to communicate with your lender and get a letter of pre-approval before you begin your search. Don't make the mistake of falling in love with a home without being able to make a serious offer on it. Get your paperwork in order first, so you'll have clear expectations about what you need and what can you offer.

2. Don't make an offer on a "fixer-upper" without thinking of the financial implications.
Renovating a home can be a fun and worthwhile project, but don't forget to calculate the cost of repairs, renovations, and time spent first. You can get a great deal on a home and end up using up those savings in repairs you didn't anticipate. Pay close attention to the home inspection and get estimates on any repairs you plan on doing.

3. When you calculate your budget for a home, make sure to consider the additional expenses homeowners have.
If you fall in love with a home priced at the top of the budget, make sure you consider the additional expenses of homeownership such as property taxes, fees from a homeowner's associations, and normal upkeep and maintenance of a home. If these calculated expenses put you over budget, consider other options. New homeowners will sleep easier at night knowing they have a solid financial buffer.

4. Use a real estate agent and an attorney you trust.
It's important that you have experienced people to help guide you through this process. A good real estate agent is invaluable when investing in a home. Your agent should be experienced with selling homes in the area you're looking to purchase in and easily available over phone.

Thursday, April 10, 2014

Protect Yourself Financially Before You File for Divorce

Divorce often puts people on a shaky financial ground. The prospect of splitting of assets can be scary and fraught with complications. So what can you do to make sure you'll be protected financially when you decide to divorce? Below are some tips to help you prepare.

1) Review your financial documents.
Now is the time to get all of your financial documents together. Firstly, you will need most of these documents when you go to Court anyway. Secondly, it is important to have an up-to-date picture of your financial situation. You should carefully review and duplicate these papers. You should also request a credit check and review the report carefully. You are entitled to a receive a free credit report once a year. If you will be moving to a new home or apartment, this may be the first time you will have to apply for housing using only your credit score. Remember, knowledge is power!

2) Change accounts into your name.
You may have opened joint bank accounts, credit cards, and/or other loans during the course of your marriage. It is wise to open a bank account with you as the sole account holder so that you have a secure way to store and access money. Additionally, you should close out all joint credit cards at soon as possible, as to avoid your significant other making unapproved charges.

3.) Be mindful of taxes
A divorce will change the way you file for taxes. Make sure you are aware of how the date your divorce is finalized might affect the way you file taxes for this year and the next. You might want to consult a tax attorney if you are unsure about any part of the process.

4) Avoid taking on additional debt
If you are considering filing for divorce, do not take on or cosign any new debt and encourage your spouse to do the same. Remember that any debt either of you takes on during the marriage will be considered joint debt. In this time period you want to be detangling yourself from any joined financial ventures, not taking on new ones. This will only further complicate the divorce process and could result in financial loss on your part.

5.) Update your will and insurance.
You never know when emergency situations will arise, so don't let yourself be caught be surprise. Make sure you update your will, insurance, and any other financial documents to reflect that your spouse is no longer your beneficiary. 

Wednesday, April 9, 2014

The Affordable Care Act Helps Your Small Business!

Recently, the Obama administration was able to pass the Affordable Care Act. The ACA is an extensive bill that will have a lot of positive effects on small business.
Here are some ways that the ACA will help you improve your small business:

1. Everyone knows that insurance can be incredibly expensive. Part of the aim of the ACA was the make healthcare more accessible to all types of people. Starting in 2013, a new program called SHOP (the Small Business Health Insurance Options Profram) will open Marketplaces where businesses can "shop" around for affordable health care programs. According to the U.S. Small Business Adminstration, small business pay on average 18% more than large businesses for health care. This gap should decrease by allowing businesses a place where they can compare and negotiate insurance prices.

2. The ACA also increases the available tax credit designed to help businesses with their health care expenses to up to 50% for those who participate in the Marketplace. Before the ACA, these businesses could only receive 35% in tax credits.

3. The ACA also created programs to improve the quality of care in the workplace. Under the act, workplaces receive increased rewards for instituting programs to help employees quit smoking or use a health-contingent plan.

4. With the ACA greatly increasing the number of people who have health insurance, small business on a whole will benefit by having healthier employees. Research shows that healthier employees are on average more productive employees. They take less time off from work and accomplish more when they are actually at work. Therefore, the ACA could provide a boost to the productivity of small businesses.

If you are a business owner and you have questions about how the ACA will impact your business, feel free to call my office at 718-313-7563.

Thursday, April 3, 2014

Is It Impossible to Discharge Student Loans?

It has been widely reported that student loans cannot by discharged, even by bankruptcy. People believe that the only way to get rid of their student loans is through full repayment or death. However, this "common knowledge" is not entirely true. Although it is very difficult to get student loans discharged through bankruptcy and your particular situation must meet the right criteria, there are people who successfully discharge their student loans through choosing bankruptcy every year.

The first condition a person must meet if they wish to have their student loans discharged after filing for either Chapter 7 or 13 bankruptcy is that they must be able to prove that their student loans cause them "undue hardship." Judges use a three-pronged test commonly known as the Brunner test to establish undue hardship. In order to prove hardship, the applicant must meet all three prongs of the test. They are as follows:

1) the debtor[s] cannot maintain, based on current income and expenses, a 'minimal' standard of living for [themselves and dependents] if forced to repay the loans

2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and

3) that the debtor[s have] made good faith efforts to repay the loans

As you may have guessed by the three prongs of the Brunner test, "undue hardship" clauses are mainly used for people who people who have become permanently disabled and therefore unable to work. However there are other circumstances in which a judge may move to discharge your student loans. For example, a person who will be unable to provide necessities for his or her dependent children would be a good candidate to apply for undue hardship.

However, the difficulty of the undue hardship clause should not necessarily discourage you from trying to discharge your student loans. A recent study published by the American Bankruptcy Law Journal found that 39% of people who went through the process correctly were able to discharge their student loans. This directly contradicts the popular idea that it is impossible to get rid of your student loans.

If you find that your loans are causing you extreme financial hardship, you should consult an attorney experienced with bankruptcy. A bankruptcy attorney will be able to tell you whether or not your case has the potential to meet the three conditions for undue hardship and guide you through the process if it is. 

Wednesday, April 2, 2014

Criminal Background Checks During College Applications: How a Juvenile Offense Can Bar You from University

Juvenile Offenders are much more common in the United States than many people might guess. In fact, a 2012 study found that almost a third of American adults have been arrested for illegal or delinquent offenses by the age of 23. Although many of these juvenile offenders are able to get their records sealed or otherwise labeled confidential, there are still a plethora of "collateral consequences" that these young people must face as a result of their convictions. Traditionally, the collateral consequences of committing a crime might involve the danger of loosing jobs, public housing, public benefits such as welfare, and voting rights. Now, it has come to the legal community's attention that an increasing number of teenager offenders may be at risk for damaging their chances at college admission and/or federal financial aid. A recent study by the Center for Community Alternatives found that 66.4% of colleges currently collect information on their applicants' criminal records and this information is used in order to determine admissions.

The Common Application, the standard application used by colleges, specifically asks applicants "Have you ever been adjudicated guilty or convicted of a misdemeanor, felony, or other crime?" Other applications ask even more detailed questions, such as "Have you ever been pardoned or had your record expunged in any court? If so, please provide details as to the crime and conviction." Questions such as these pressure applicants, who have legally expunged, sealed, annulled, or confidential records, to disclose information that can be used against them in the admission process.

Another obstacle applicants may face is their eligibility for federal student loans. The Federal Application for Federal Student Aid, commonly known as the FAFSA, specifically excludes any student who was convicted of a drug related crime while receiving federal grants, loans, or work study from receiving federal student aid. A conviction for possession of a controlled substance results in a suspension from federal aid for one year, while a conviction for the sale of a controlled substance will earn students a two year suspension. Hundreds of thousands of students across the country rely on federal aid to attend college so a suspension can have a major impact on whether or not an applicant is achieve a higher education.

If you a young adult with a criminal record, there are several important things you should ask your attorney. The effects a conviction will have on you will be different depending on whether you are already enrolled in college or if you simply want to apply in the future and the status of your record.

You should also be aware of Penal Law § 1.05(6). The penal code states that one of the general purposes of the law is the "rehabilitation of those convicted, the promotion of their successful and productive reentry and reintegration into society." Penal Law § 1.05(6) may be helpful to your attorney in arguing your case, since it is obvious that hindering a teenager from receiving higher education would have an negative and unfair impact on his or her life.

If you are a juvenile accused of a crime, be sure to hire an experienced attorney. This is not a situation where you want to "go it alone." Juvenile offenses can have serious impacts on your future. You can reach my office at 718-317-5007.