1 week 10 hours ago

The October 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are Jim Shenwick’s comments about those sales results.
1. The volume of transfers rose dramatically from September. In October, there were 106 unrestricted taxi medallion sales.
2. However, 99 of the 106 sales were foreclosure sales, which means that the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value).  One transfer was an estate sale for no consideration and another transfer was from an individual to an LLC for no consideration, which also does not reflect fair market value and which we have also excluded from our analysis.
3. The large volume of foreclosure sales (approximately 94%) is in our opinion evidence of the continued weakness in the taxi medallion market.
4. The five regular sales for consideration ranged from a low of $150,000 (one medallion), $160,000 (three medallions) and a high of $175,000 (one medallion).
5.  Accordingly, the median value of a medallion in October was $160,000, down 8.5% from $175,000 in September.
In Jim Shenwick’s opinion, the new NYC law restricting the number of Uber, Via and Lyft licensesdoes not seem to have yet increased the value of taxi medallions.
Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at

1 week 10 hours ago

Economists have always been fond of Uber. Its willingness to battle incumbents, use of technology to match buyers and sellers, and embrace of “surge” pricing to balance supply and demand make the ride-hailing giant a dismal scientist’s dream. Steven Levitt, the author of the bestselling “Freakonomics”, called it “the embodiment of what the economists would like the economy to look like”. But if economists subjected Uber and its competitors to a cost-benefit analysis, they might not be so impressed.

This might surprise customers. A study in 2016 by researchers from Oxford University, the University of Chicago and Uber itself found sizeable benefits from ride-hailing services for consumers. Using data from 48m Uber trips taken in four American cities in 2015, they estimated the difference between how much customers were willing to pay and their actual fare. Each $1 spent on UberX rides generated a “consumer surplus” of $1.60. Across America, that surplus was estimated to be $6.8bn a year.

Drivers also benefit. Few sign up for lack of anything else, as is true of some gig work: in America roughly eight in ten have left another job to get behind the wheel. The typical American Uber driver makes $16 per hour ($10 after expenses), higher than the federal minimum wage. In London earnings after expenses come to £11 ($14) per hour and a recent survey found Uber drivers reporting higher levels of life satisfaction on average than other workers.

But against these benefits, there are costs to weigh. Far from reducing congestion by encouraging people to give up their cars, as many had hoped, ride-hailing seems to increase it. Bruce Schaller, a transport consultant, estimates that over half of all Uber and Lyft trips in big American cities would otherwise have been made on foot or by bike, bus, subway or train. He reckons that ride-hailing services add 2.8 vehicle miles of driving in those cities for every mile they subtract.

A new working paper by John Barrios of the University of Chicago and Yael Hochberg and Hanyi Yi of Rice University spells out one deadly consequence of this increase in traffic. Using data from the federal transport department, they find that the introduction of ride-sharing to a city is associated with an increase in vehicle-miles travelled, petrol consumption and car registrations—and a 3.5% jump in fatal car accidents. At a national level, this translates into 987 extra deaths a year.

What could be done to tip the balance back to benefits overall? “Congestion pricing is the most direct solution,” says Jonathan Hall of the University of Toronto. Several cities, including London, Stockholm and Singapore, have moved in this direction, charging drivers for entering busy areas at peak hours. If ride-hailing firms tweaked their pricing to encourage carpooling, that would help, too.

One of the worst things a city can do, says Mr Barrios, is to cap the number of ride-hailing cars on their streets, as New York did in August. That marked a step back towards the days when barriers to entering the taxi market were high and competition was low. A dismal outcome, as most right-thinking economists would agree.

Copyright © The Economist Newspaper Limited 2018. All rights reserved.

1 week 10 hours ago

By Ashley Cullins

Wesley Snipes must pay millions to the IRS after failing to convince a tax court that he doesn't have the assets to pay more than six figures.

After the IRS tried to collect $23.5 million in back taxes, the actor asked for an offer-in-compromise which would let him settle his debt for less than the amount owed and for the notice of federal tax lien that was filed against his home to be withdrawn. He put up just shy of $850,000 in cash as an OIC, but the IRS rejected the offer and sustained its lien. So Snipes filed a petition asking the tax court to overturn the decision.

U.S. Tax Court Judge Kathleen Kerrigan on Thursday upheld the IRS decision finding Snipes failed to provide sufficient proof of his assets and financial condition and the settlement officer didn't abuse her discretion in rejecting his request.

The lien was placed in August 2013, just a few months after the actor was released from prison following his conviction on related tax crimes. At the time, he owed $23.5 million for the years 2001 through 2006. Snipes then requested an installment agreement or OIC and made his cash payment. A settlement officer looked into his real estate holdings and assets but was unable to determine that he no longer owned certain properties that he claimed to have unloaded. Following the investigation, the officer determined that the reasonable amount that could be collected was about $17.5 million, but Snipes didn't increase his OIC offer.

During the proceedings that followed, Snipes claimed his financial adviser had taken out loans and disposed of assets without his knowledge and offered up an affidavit from the adviser admitting to misconduct — but he didn't provide documentation showing the diversion of the assets.

The settlement officer later reduced Snipes' estimated liability to $9.5 million, but Snipes stayed with his original offer.

"Given the disparity between petitioner’s $842,061 OIC and the settlement officer’s calculation of $9,581,027 as his RCP, as well as petitioner’s inability to credibly document his assets, the settlement officer and her manager had ample justification to reject the offer," writes Kerrigan in the opinion, also noting that Snipes failed to show paying the bill would result in economic hardship. "Accordingly, we conclude that the settlement officer did not abuse her discretion in determining that acceptance of petitioner’s OIC was not in the best interest of the United States."

© 2018 The Hollywood Reporter.  All rights reserved.

1 week 1 day ago

Who gets paid first in a Chapter 13 Bankruptcy case in Tacoma?
Most people who file for Chapter 13 bankruptcy in Tacoma are neck deep in debts because of credit card bills, medical expenses, and mortgages. If you are one of these people, it is best to know the basics about bankruptcy so that you are well informed on how your debts are going to be paid. It will help to understand how debts are settled in a Chapter 13 case.  A Chapter 13 bankruptcy is also called a wage earner’s plan or reorganization bankruptcy. It empowers individuals with regular income to come up with a repayment plan in order to repay all or part of their debts. Our skilled Tacoma bankruptcy attorneys can counsel you so that you may fully understand how reorganization bankruptcy works.
What are the types of debt and how are they paid in Chapter 13 Bankruptcy?
No bankruptcy clears you of all debts. Bankruptcy can eliminate many other debts, but it will be more difficult to borrow in the future. You must know that debts fall under two categories:
1. Dischargeable Debts – Debts for which the debtor will no longer be liable when the bankruptcy is discharged.
2. Non-Dischargeable Debts – Debts for which the debtor will still be liable even after receiving a discharge.
It is apparent that these distinctions are important information for debtors regardless of which chapter they file under. Apart from being categorized as dischargeable or non-dischargeable, debts are also classified into a few additional categories, which include:
1. Priority Debts
2. Secured Debts
3. Unsecured Debts
These classifications are important because they affect the order in which the debts must be paid and the extent to which the debts must be settled.
What are the definitions of Secured, Unsecured, and Priority Claims in Chapter 13?
Secured debts are debts which are “secured” by collateral. If the borrower falls behind on payments for these debts, the lender can seize, foreclose, or repossess the collateral. Your assets such as your home or car are usual examples of secured debts because they can be used as collateral for a loan (such as an auto loan) or a mortgage (for your house). You never fully own the asset tied to secured debt until the loan has been paid off. Because of the collateral, you now owe your creditor a “secured debt” and he now has a “secured claim”.
On the other hand, unsecured debts are debts that are not backed by collateral, such as a car or home. Credit card and medical debt are examples of unsecured debts in Chapter 13 bankruptcy. Both also happen to be dischargeable debts under both Chapter 7 and Chapter 13. Student loan debt is also unsecured debt but is usually non-dischargeable in any type of bankruptcy, unless the debtor can prove extreme hardship. A creditor who is owed an unsecured debt has an unsecured claim.
Unsecured debts can be further divided into two subcategories:
1. Priority Unsecured Debts – Debts that fall into this category include child support payments, alimony or spousal support payments, and certain types of tax debts, though income tax debts are sometimes dischargeable as long as they meet certain requirements. These are paid first in Chapter 13 bankruptcy.
2. Nonpriority Unsecured Debts – Nonpriority unsecured debts are the least urgent debts in bankruptcy. Creditors with unsecured claims are the last to be paid with any funds that remain after secured claims and priority unsecured claims have been settled. The amount to be paid on these debts will depend on how much is your disposable income and the amount the creditors should have received had you filed for Chapter 7 bankruptcy.
If you are short on cash and faced with the difficult decision of paying only some bills, it is best that the secured debts are prioritized. These payments are often harder to catch up with and you risk losing essential assets – like your home- if you are delinquent on payments.
On the other hand, you might want to pay off unsecured debts because they have higher interest rates that make it expensive in the long run. Even when you have a debt repayment plan, it is crucial to be updated with the minimum and installment payments on all your accounts.
It is also important to note of the following secured and priority debts that Chapter 13 debtors should fully pay before they are discharged:
– Alimony
– Child support
– Debts arising from death or personal injury caused by driving while intoxicated or under the influence of drugs
– Debts for restitution or a criminal fine included in a sentence on the debtor’s conviction of a crime
– Long-term obligations such as home mortgage
– Debts for most government funded or guaranteed educational loans or benefit overpayments
– Most tax debts, with some exceptions
To get more information on what the differences are, do not hesitate to call our Tacoma bankruptcy attorneys.
What are benefits of filing Chapter 13 bankruptcy if I am still required to fully pay my debts?
Chapter 13 allows debtors to propose a repayment plan so they can pay off creditors within three to five years, in manageable terms and in amounts they can afford. Homeowners who filed for Chapter 13 also have a chance to save their homes from foreclosure because once they file for Chapter 13 bankruptcy, foreclosure proceedings are stopped. Chapter 13 also allows debtors to pay off missed payments on car loans and mortgages without losing their assets. However, if you fall behind on your mortgage payments during your Chapter 13 plan, the lender can seek the court’s permission to foreclose on your home or seize your car, as the case may be.
On a positive note, once the bankruptcy is discharged, the debtor can heave a sigh of relief of having improved his financial situation and can now move forward in building a better credit standing.
Do not delay in taking that first step towards bankruptcy filing. Call our Tacoma bankruptcy attorney for professional legal advice if Chapter 13 bankruptcy is the best option for you.

The post Chapter 13 Bankruptcy in Tacoma appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.

2 weeks 23 hours ago

By Danielle FurfaroThe city will apply the brakes on millions of dollars in fees due this week from taxi-medallion owners in an attempt to stem a rash of cabby suicides.

Taxi and Limousine Commission head Meera Joshi agreed to waive what would amount to nearly $20 million in fees to give struggling medallion owners some breathing room.

She made the move after nearly a year of driver deaths led to mounting criticism from other cabbies, pols and city officials.

Councilman Mark Levine (D-Washington Heights) has been pushing legislation to provide longer-term solutions for medallion owners and asked for the break for taxi drivers who are already on the brink financially.

“This is a short-term step to provide some relief to the drivers while we work out a longer-term policy,” said Levine.

“It’s critical that we take steps to help out the drivers who have seen their life savings evaporate through no fault of their own.”

The city usually requires hacks to pay $1,650 every two years — a biennial $550 taxi-medallion renewal, six $90 inspection fees and a $10 renewal for the medallion tin. Handicapped-accessible medallion owners must pay another $540.

With 11,286 regular medallions on the streets and 2,301 accessible ones, that’s nearly $20 million in fees that the city is now waiving.

And all of that was set to come due this week.

"Absolutely anything could help out right now,” said Bhairavi Desai, executive director of the New York Taxi Workers Alliance. “People are struggling and they would definitely appreciate it.”

TLC commissioner Meera Joshi, who has been scorned by taxi drivers for not doing enough to help them, agreed that the hacks need a hand.

“The renewal fee is one more payment for medallion owners at a time when every penny counts,” said Joshi. “It is certainly prudent to pause collection of that fee while [Levine’s] bill moves through the legislative process and, if passed, the study it requires would be in motion.”

The city could try to recoup the fees in the future.

Levine’s bill would require the TLC to conduct a study of medallion owners’ and drivers’ debt and propose ways to help them out.

Seven for-hire drivers — three of them cabbies — have committed suicide over ruined finances since November.

The most recent was Uber driver Fausto Luna, 58, who jumped in front of an A train on Sept. 26 because of massive debt.

In June, cash-strapped yellow cabby Abdul Saleh, 59, hanged himself in his Brooklyn apartment.

In May, yellow cab driver Yu Mein “Kenny” Chow, 56, jumped into the East River.

In March, cabbie Nicanor Ochisor, 65, hanged himself in his garage in Maspeth, Queens.

Black car driver Douglas Schifter, 61, killed himself with a shotgun outside City Hall on Feb. 5, leaving a scathing note blaming the city for his woes.

In December 2017, livery hack Danilo Corporan Castillo, 57, wrote a suicide note on the back of a summons and jumped out the window of his Manhattan apartment.

A month earlier, livery driver Alfredo Perez hanged himself.

© 2018 NYP Holdings, Inc. All Rights Reserved.

3 weeks 5 days ago

By Ron Lieber

The program that public servants can use to have their federal student loans forgiven is such a quagmire for borrowers that Congress had to set up a relief program for the relief program.
So far, it’s not performing much better.
It has been nearly five months since the Department of Education released instructions for a $350 million pot of money that some public servants can use if they received bad information about the loan forgiveness program and ended up in the wrong type of repayment plan.
Tens of thousands of people have applied for the relief program. But so far, most have been rejected, and as of late last month, none among the few thousand who remain in the running have seen their debt balances go to zero.
In response to an inquiry led by Senator Tim Kaine, Democrat of Virginia, the department disclosed last week that 28,207 people had submitted requests as of Sept. 28 and that it had found 21,672 ineligible almost immediately. It then culled “approximately” half of the remaining 6,535 for other reasons. That leaves just over 3,000 applications still under consideration.
It can take up to six months or so to review these requests because of the complexity of both the forgiveness program and the relief fund application process. The Department of Education has shifted some staff to work more closely with the loan servicer that handles the forgiveness program.
The relief fund was created after it became clear that scores of teachers, social workers and other government and nonprofit employees had received bad information from their loan servicers about the forgiveness program’s complex terms. So far, fewer than 1 percent of applicants have had their loans discharged through the program, which got its start just over a decade ago but is only now having borrowers become eligible.
To qualify for tax-free loan forgiveness, borrowers need to make 120 on-time monthly payments (while working in an eligible public-service position), have the right kind of loan (some federal loans qualify while others do not) and be in the right kind of payment plan (the income-driven ones designed to help lower-income borrowers). I explained the process in more detail in an earlier column.
When it became clear in recent years that loan servicers had told public-servant borrowers that they were doing everything right even when they were in the wrong kind of loan or payment plan, pressure grew on elected officials to help borrowers who thought they were being meticulous only
to find that years of payments had not counted for forgiveness.

Enter the Temporary Expanded Public Service Loan Forgiveness initiative, which is a pool of $350 million designed to help borrowers who were in certain ineligible payment plans, often because their loan servicers specifically told them to use those plans or stay in them. The relief program comes with its own rules and restrictions, which I outlined in a previous article and are available on the Department of Education’s website.
Five months in, that website is no model of clarity.
For instance, one paragraph tells borrowers that they must submit a public service loan forgiveness application and wait to be rejected (for payments that were not in a qualifying payment plan) before being potentially eligible for relief. The very next paragraph, however, tells them that they do not need to wait before submitting a request under the temporary plan.
Jolie von Suhr, a psychologist in a state psychiatric hospital in Lakewood, Wash., who was in an ineligible payment plan for years before realizing she had a problem, said the site’s conflicting information left her both perplexed and afraid.
“It kind of sounds like you can submit them both at the same time, but I’m not sure,” she said. “I’m so anxious now about doing anything incorrectly that could get me booted out of consideration.”
In fact, you do not have to wait for a public service loan forgiveness denial in order to request consideration under the temporary expanded program. I asked if the department intended to clarify this on its site and received assurances that it “will continue to review communications to borrowers and will adjust them as appropriate.”
Some eligibility determinations are easier to make than others — rejecting people who have not made 120 payments or who were in an ineligible loan, for example. The Department of Education’s loan servicer often has a tougher time producing an accurate count of months of repayment.
Plus, it now has to account for a rule under the temporary program that applies to people who thought they were in the right kind of repayment plan but found out much later that they were not. They are eligible for the temporary program only if their most recently monthly payment and the
one they made 12 months before their application were higher than what they would have paid if they had been enrolled in a qualifying repayment plan. Yes, it’s complicated, and clearing this hurdle may require documentation.

The Education Department seems tired of bearing blame for all of this.
“We implement the programs Congress creates,” said the department’s press secretary, Liz Hill. She added that the forgiveness program and the temporary program were “poorly constructed programs, the rules of which are highly complex and difficult for students to navigate.”
“We are working to make it as straightforward as the rules allow,” Ms. Hill said.
Some borrower advocates are not surprised by the delays thus far.
“This is a new program in that we’re still in the first year or so of forgiveness applications,” said Betsy Mayotte, president of the Institute of Student Loan Advisors, a nonprofit adviser to debtors. “I have high hopes that the process will become more seamless and quicker over time.”
© 2018 The New York Times Company.  All rights reserved.

4 weeks 15 hours ago

Student loan debt is a big financial burden for many people. In fact, Americans owe $1.5 trillion in student loan debt, according to data from the Federal Reserve.
While some may find themselves forced to defer or default on your student loans, it's better if you're able to come up with a system to pay them off — and within a modest time frame.
There are two primary reasons to pay down your student loan debt in a reasonable amount of time, Maizie Simpson, data and news editor at Credit Karma, told Business Insider via email.
"The first has to do with interest: The longer you draw out your repayment period, the more interest you'll end up paying," Simpson said. "The second reason is that the longer you have student loan debt, the longer you might put off big life decisions or making investments in your future, such as starting a family or contributing to a 401(k)."
When it comes to paying off your student loans, no matter how intimidating the debt amount is, making an actionable payment plan is key. Here, Elyssa Kirkham, a finance reporter and student loan expert for Student Loan Hero, who paid off a substantial amount of debt herself, took us through a 10-step plan for paying off your student loan debt. 1. Know what you owe Kirkham said that the first step in repaying your debt is to know your debt, especially since you might have taken out several student loans with various lenders. "Many people avoid thinking about or looking at their student debt too closely for a simple reason: Student loans are a huge source of stress," she said.
She suggested using the National Student Loan Data System to find any federal student loans you took out while in college.
"You can also find both federal and private loans listed on your credit report, and check that you're making the proper payments on time each month," Kirkham said. "In addition, record the current balance and interest rate on each student loan." 2. Triage your student loan debt If you are in danger of or already missing student loan payments, Kirkham advised that you try to triage them.
"First, switch federal student loans to an income-driven repayment plan to lower monthly payments," she said. "Then, apply for deferment or forbearance to pause payments if you hit a major financial setback, such as losing a job."
Many private student loan lenders also provide an option to defer payments, Kirkham said. "And keep in mind that unless you have Direct Subsidized Loans, deferred student debt will continue to accrue interest and your balance will increase." 3. Assess other financial considerations Kirkham said to consider if other financial goals need attention before you can go gung-ho on student debt. "If you have other debt, like credit card balances, that are costing you more than your student loans are, it might be wise to pay these off first," she said. 4. Get — and keep — your living costs in check Kirkham suggested that you keep your biggest monthly costs as low and affordable as you can. "I got married right out of college, and my husband and I had borrowed over $40,000 to pay for our educations," she said. "We paid off my student loans right away — about $17,000 within three years of graduating — and we just paid off the remaining student loan balance in July 2018!"
She said that keeping her lifestyle in check was a huge factor that enabled her to pay off her student loans in a timely manner. "I chose more affordable apartments, for example, and shared a car with my husband for years to put off buying a second vehicle," she said.
Kirkham said to take a look at your own monthly spending and rework your budget. "Outline recurring expenses, be critical, and see if there are any you can cut out or trim down," she said. "For instance, can you keep just one of the three video streaming services you're subscribing to? Each dollar you trim from your expenses means an extra dollar you can use to pay off student loan debt." 5. Decide how much to put toward student loans "Once you calculate your set expenses, look at how much is left over," Kirkham said. "This is your discretionary income — money that you are free to decide how and when to spend."
She says you should decide how much of your discretionary income you want to put toward making payments on your student loan debt. "It's best to set a firm dollar amount that you can pay each month," she said.
Kirkham said that although you feasibly could afford to put all of this toward your student loans, it's important to be realistic. "You want to create a spending plan you will actually stick to," she said. 
"Try to cut back on this optional spending without making yourself miserable. For example, I learned to DIY what I could: I cooked at home, worked out at home, and even learned to give myself a pretty great self-manicure." 6. Make extra student loan payments each month Make additional student loan payments each month by setting up an automatic, extra payment to go through after each deposit, Kirkham said. "This puts your student debt goal first and keeps it on track, instead of putting it at the mercy of your spending habits."
However, she said to check your monthly statements to make sure your extra student loan payments are applied properly. "Some servicers will count them as advance payments instead of applying them to your principal, for example," she said. 7. Target high-interest student loans first with the debt avalanche method You may be familiar with the debt avalanche method of paying off credit cards, in which you pay off the highest-interest card first. Well, the same goes for student loans.
"As you pay down this balance, this will also lower the amount of interest you're being charged each month, so your dollars are used to actually lower your principal and get you out of debt," Kirkham said. "If you pay off this first loan, you simply put the amount you were paying (including both the monthly payment and extra payments) toward the student loan with the next-highest interest rate." 8. Refinance certain student loans Another way to target high-interest student loans could be to refinance them, Kirkham said.
"Private student loans and PLUS student loans, in particular, tend to have high enough interest rates that it could make sense to refinance," she said. "You'll need to be well-qualified, but taking this step could help you replace your high-interest student debt with a new private student loan at a lower interest rate."
9. Put any windfalls or raises toward your student debt Kirkham suggested looking for "extra" income that you can use to take a chunk out of your student loan balances, such as tax refunds, bonus pay, cash gifts, raises, and income from side hustles.
"In particular, focusing on growing your income through earning raises, trading up to a better job, or starting a side hustle can be great ways to generate more money you can use to target student debt," she said. 10. Pace yourself and stay motivated "Paying off student loans is a marathon, not a sprint, and it requires similar skills and strategies," Kirkham said. She said to pace yourself and find a budget and student loan system that works best for you.
"Keep your eye on the prize and stay focused on your goal of paying off student loans," she said. "Track your progress and celebrate your wins as you go, from the first extra payment you make to the first student loan you pay off to the last payment you ever send a student loan servicer."  
Copyright © 2018 Insider Inc. All rights reserved.

1 month 4 days ago

A “Suggestion of Bankruptcy” is a document filed in a lawsuit to notify the court that the defendant has filed bankruptcy. Filing such notices with the court is very helpful to the court and to opposing parties so they may cancel upcoming court hearings or pending garnishment orders. Many courts automatically place a pending lawsuit on hold until further order of the bankruptcy court and take affirmative steps to release garnished funds.
Our office files bankruptcy cases electronically and in the next moment we electronically file Suggestions of Bankruptcy with the Nebraska court system. The system is efficient and quick. The goal is to “put out the fire” of collection activity as quickly as possible, and filing Suggestions of Bankruptcy greatly facilitate that goal.
In most cases the bankruptcy results in a discharge of debts, but what happens if the bankruptcy case is dismissed without a discharge? Does the filing of a Suggestion of Bankruptcy mean that the debtor’s bankruptcy attorney has entered a general appearance on behalf of the debtor-defendant? Is the debtor’s attorney in a dismissed bankruptcy case now obligated to defend the debtor in the state court action?
Most bankruptcy attorneys would say no, the filing of a Suggestion of Bankruptcy is not the same thing as filing an Appearance of Counsel. Most would say that the Suggestion is nothing more than a notice and that does not obligate the bankruptcy attorney to defend the lawsuit.
All that changed recently with the Nebraska Court of Appeals issued a new opinion stating that the filing of a Suggestion of Bankruptcy constitutes a General Appearance. By extension, the ruling could also be viewed as stating that the bankruptcy attorney who filed the Suggestion of Bankruptcy has entered an Appearance of Counsel and has a duty to represent the defendant. See Bayliss v Clason, 26 Neb. App 195 (2018).
The relevant text of the opinion is as follows:
“A party will be deemed to have appeared generally if, by motion or other form of application to the court, he or she seeks to bring its powers into action on any matter other than the question of jurisdiction over that party. Id. See Neb. Rev. Stat. § 25-516.01(2) (Reissue 2016).  [The Appellee] argues that by filing the suggestion in bankruptcy and the amended suggestion in bankruptcy, [the defendant] made a general appearance. We agree. . . . By filing the stay, [the defendant] asked the court to bring its powers into action on a matter other than the question of jurisdiction, thus making a general appearance and waiving any defects in the service of process.”
The obvious defect in the court’s reasoning is that a debtor is not asking the court to “bring its powers into action” when a Suggestion of Bankruptcy is filed. To the contrary, the debtor is informing the court that it no longer has any power. The court isn’t invoking any power at all nor is the debtor making such a request. The debtor is merely INFORMING the court of the bankruptcy so it STOPS invoking power.
Bankruptcy attorneys have good reason to be concerned. Although most Chapter 7 cases result in a discharge of debts, Chapter 13 cases frequently fail when debtors are unable to make payments. Roughly 40% of Chapter 13 cases in Nebraska are dismissed without a discharge, and nearly every one of those failed cases involves a bankruptcy attorney who filed multiple Suggestions of Bankruptcy in state court lawsuits.
Are bankruptcy attorneys who file Suggestions of Bankruptcy required to defend clients in state court actions when the bankruptcy case is dismissed without a discharge? Such a ruling would be devastating. Thousands of judgments are entered against debtors after bankruptcy cases fail, and many of those debtors have valid defenses available to them. But bankruptcy attorneys NEVER defend debtors in state court lawsuits when the bankruptcy case is dismissed. They do not believe they have that duty. Their written contracts with the clients frequently state that their representation is limited to the bankruptcy case. Are all these bankruptcy attorneys wrong?
What do Nebraska’s court rules say?
§ 6-1506. Bankruptcy
(A) Civil cases in which a party has been named as a debtor in a voluntary or involuntary bankruptcy petition. In any civil case pending before this court in which a party has been named as a debtor in a voluntary or involuntary bankruptcy petition, a Suggestion of Bankruptcy and either (1) a certified copy of the bankruptcy petition, (2) a copy of the bankruptcy petition bearing the filing stamp of the clerk of the bankruptcy court, or (3) a copy of a “Notice of Bankruptcy Case Filing” generated by the Bankruptcy Court’s electronic filing system shall be filed by the party named as a debtor or by any other party with knowledge of the bankruptcy petition. Upon the filing of the Suggestion of Bankruptcy and one of the three bankruptcy documents noted immediately above, no further action will be taken in the case by the court or by the parties until it can be shown to the satisfaction of the court that the automatic stay imposed by 11 U.S.C. § 362 does not apply or that the automatic stay has been terminated, annulled, modified, or conditioned so as to allow the case to proceed. Such a showing shall be made by motion.
(B) Requests for disbursement of funds or distribution of property of or to a party named as a debtor in a bankruptcy proceeding. In any civil case in which a Suggestion of Bankruptcy and one of the three bankruptcy documents noted in § 6-1506(A) have been filed, no request for a disbursement of funds or distribution of property of or to a party named as a debtor shall be made, and no order disbursing funds or distributing property of or to a party named as debtor will be entered. A request for disbursement of funds or distribution of property may be made after a showing, satisfactory to the court, that such funds or property has been abandoned by the trustee in bankruptcy or that the funds or property has been exempted by the debtor in the bankruptcy proceedings or that the party named as debtor in the bankruptcy petition, rather than the trustee in bankruptcy, is otherwise entitled to disbursement of such funds or distribution of such property. Such a showing shall be made by affidavit.
Nebraska Court Rule § 6-1465 says the exact same thing.
Unfortunately, these court rules do not answer the question. They talk about the filing of Suggestions of Bankruptcy, but they do not state whether such a filing also constitutes an Appearance of Counsel and thus obligate the bankruptcy attorney to defend the lawsuit.
In the absence of a clear rule, bankruptcy attorneys are choosing to not file any notice of the bankruptcy in state court lawsuits, and that’s a bad development. The immediate response to this new ruling was full of fear and anger:

“If I were a creditor’s attorney, I would be very upset and concerned with this decision. This just made their life a whole lot worse and expensive for their clients. Ultimately, the Stay is in effect and if you immediately notify opposing counsel, informally but with certainty, then their client is on notice. If garnishments and/or executions don’t stop IMMEDIATELY, guess who is going to have to undo/fix all of that stuff? Debtor attorneys have always done the Suggestions of Bankruptcy and it is a SERVICE to the state court and a service to creditors and to their wallet. Just think about how much time and energy is saved by having Debtor’s attorney provide this service FREE of charge! And, now, we get pulled in as making a “general appearance?” No way. We don’t get paid nearly enough for that responsibility.”

Courts will not be aware of the bankruptcy and may continue with hearings or enter judgments that will later be declared to be void. Collection attorneys will be delayed in learning of the bankruptcy case and may face increased pressure to disgorge garnishment funds and may face sanction motions more often in bankruptcy cases when they ignorantly garnish debtors after the bankruptcy is filed. This is not good. Effectively penalizing bankruptcy attorneys who diligently notify the court of the bankruptcy case by imposing an obligation of defending the debtor in state court will cause bankruptcy attorneys to stop filing such notices. That is not a healthy development. I have heard from attorneys in other states with this problem and they solve it by having clients mail in the bankruptcy notice themselves thus causing a delay in notifying courts of the bankruptcy by days. A policy that leads to less communication of vital facts to the court is simply bad policy.
Nebraska court rules need to be amended immediately to clearly indicate whether the filing of a Suggestion of Bankruptcy shall be considered a General Appearance by the debtor and/or as an Appearance of Counsel by the bankruptcy attorney.  Bankruptcy attorneys do a great service to the court system by filing Suggestions of Bankruptcy, and our court rules should be clarified to allow them to continue providing such valuable information without fear of becoming involved in the underlying state court lawsuit.
Image courtesy of Flickr and jo.sau

1 month 1 week ago

Understanding the bankruptcy process can be a daunting undertaking. However, if you break it down into manageable sections, it can be easier to understand. Keep reading the following sections to learn more about the bankruptcy process and how it applies to your individual situation: Bankruptcy Explained, Bankruptcy Types, Why Should You File Bankruptcy, When Should You File Bankruptcy, and Bankruptcy Costs.
The post Understanding Arizona Bankruptcy appeared first on Tucson Bankruptcy Attorney.

1 month 1 week ago

The September 2018 New York City Taxi & Limousine Commission (TLC) sales results have been released to the public. And as is our practice, provided below are Jim Shenwick’s comments about those sales results.
1. The volume of transfers rose from August. In August, there were 54 unrestricted taxi medallion sales.
2. 44 of the 54 sales were foreclosure sales, which means that the medallion owner defaulted on the bank loan and the banks were foreclosing to obtain possession of the medallion. We disregard these transfers in our analysis of the data, because we believe that they are outliers and not indicative of the true value of the medallion, which is a sale between a buyer and a seller under no pressure to sell (fair market value).  One transfer was an estate sale for no consideration and another transfer was from the dissolution of a partnership, which also does not reflect fair market value and which we have also excluded from our analysis.
3. However the large volume of foreclosure sales (approximately 81%) is in our opinion evidence of the continued weakness in the taxi medallion market.
4. The eight regular sales for consideration ranged from a low of $160,000 (three medallions), $175,000 (two medallions), $180,000 (one medallion) and a high of $200,000 (two medallions).
5.  Accordingly, the median value of a medallion in September was $175,000, the same as in August.
In Jim Shenwick’s opinion, the new NYC law restricting the number of Uber, Via and Lyft licensesdoes not seem to have yet increased the value of taxi medallions.
Please continue to read our blog to see what happens to medallion pricing in the future. Any individuals or businesses with questions about taxi medallion valuations or workouts should contact Jim Shenwick at (212) 541-6224 or via email at