Law Office of Patricia Colligan, LLC

If you find yourself concerned about a family member’s capacity to manage their personal and financial affairs, 



If an individual does not qualify for Chapter 7 because their income exceeds the state median income or because they own non-exempt assets which they want to keep, that individual may still qualify for bankruptcy relief through Chapter 13. 

In a Chapter 13 Bankruptcy, a debtor makes a Chapter 13 Plan payment through the Bankruptcy Trustee to his creditors.  The amount can vary from practically zero percent to 100 percent of total debt.  Sometimes, debtors who qualify for Chapter 7 choose Chapter 13 Bankruptcy because certain benefits are only available to Chapter 13 filers. 

Chapter 13 can offer the opportunity to catch up on mortgage arrears, to remove a second mortgage from a house, and to reduce a car lien down to the vehicle's actual market value. 

A Chapter 13 filer receives the same benefit from the automatic stay as the Chapter 7 filer.  Creditors must cease all collection efforts. Similarly, the Chapter 13 filer receives the same discharge as a Chapter 7 filer.  After the Chapter 13 debtor makes the required payments under the Chapter 13 Plan, all remaining debt is eliminated through the bankruptcy discharge.

The Law Office of Patricia Colligan, LLC represents clients petitioning for a Court ordered guardianship so the client can assist their incapacitated family member.  Once the Court appoints the client as guardian, the client is able to protect their incapacitated family member by taking control over their personal, health care and financial decisions.  

When establishing a Special Needs Trust, the Creator appoints a Trustee to manage the assets in the Trust.   The Trustee has complete discretion over the trust assets and will be in charge of spending money on the disabled person’s behalf.  SSI, Medicaid, and the Division of Developmental Disabilities do not consider the trust property for program eligibility purposes because the disabled person has no control over those assets.  The Trustee can never give money directly to the disabled person, but can use the assets to purchase a wide array of goods and services for the disabled person. 

Chapter 7 provides bankruptcy relief for debtors who have income and assets that do not exceed a set limit.  A bankruptcy discharge releases a debtor from personal liability for unsecured debt including credit card debt, medical bills, personal loans, most judgments, deficiencies on repossessed vehicles, motor vehicle surcharges, and some tax debts.  There are limited exceptions from a bankruptcy discharge including spousal and child support, certain tax debts and student loans. 

Upon filing a bankruptcy petition, an "automatic stay" stops collection action against a bankruptcy filer's property.  Creditors cannot contact you.  Creditors must stop any lawsuits or repossession actions.  Creditors cannot garnish wages or levy property.  In some cases, debtor's counsel can bring a Court proceeding to demand the return of wages or property recently garnished or levied.

Secured Debt

You can keep a secured asset like a car in bankruptcy by signing a reaffirmation agreement.  In this agreement, a debtor agrees to continue making payments in exchange for the right to keep the car.

Guardianships are protective arrangements established by Court Order on behalf of an incapacitated person. A guardianship becomes necessary when an individual does not have the mental capacity to govern their own personal and financial affairs.  

  • Bankruptcy

  • Guardianship

  • Special Needs Trusts



Chapter 7 Bankruptcy

If you have a child, grandchild, or other disabled loved one that you want to provide for without disrupting their crucial government benefits,


There are 2 kinds of Special Needs Trusts each with their own sets of rules:

  • 1st Party Special Needs Trusts – the property funding the trust belongs to the disabled person.  For example, proceeds of a lawsuit or an inheritance.

  • 3rd Party Special Needs Trusts – the property funding the trust belongs to the disabled person’s relative.

Chapter 13 Bankruptcy

Special Needs Trusts


Examples are:

  • A family member is concerned about a parent who suffers from a mentally disabling condition such as dementia.  If the parent did not prepare a power of attorney authorizing the family member to act on their behalf while the parent had the capacity to consent, then the family member must file a petition with the Court to become their parent’s guardian. 

  • A mentally disabled child turns 18 years of age.  The child’s parents lose authority to make financial and personal decisions for their child when the child turns 18.  In order to continue assisting their child with financial, personal, and health care matters, the parent needs to file a petition for guardianship with the Court.

To find out if you are eligible for relief from overwhelming debt through bankruptcy protection, contact the Law Office of Patricia Colligan.

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If you have a disabled child, grandchild, or other relative that you plan to provide for in your Last Will and Testament, care must be taken to ensure that you do not inadvertently disqualify your loved one from crucial government benefits.  Special Needs Trusts are created to help relatives improve the lives of the disabled family member financially in a way that will not jeopardize their receipt of important government benefits. 

Some examples of “means tested” benefits that are only available to disabled persons with assets below a certain level are:

  • Medicaid
  • Supplemental Security Income (SSI)
  • Division of Developmental Disabilities