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The stepson of legendary actor Mickey Rooney has filed bankruptcy following a court order claiming he owes his stepfather over $2 million for an elder abuse settlement. Rooney, 93, claims his stepson Christopher Aber and his wife Christina, took money from his bank accounts, refused to feed him food, and kept him from receiving his [...]
Chapter 13 Bankruptcy and Chapter 7 Bankruptcy - Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055. www.bublicklaw.com
The adversary proceeding in the case of In re Kirshner, Case No. 05-34406, Adversary Case No. 06-01872 (Bankr.S.D.Fla. October 30, 2007)(Hyman, C.J.) presented various issues to the court. Among them was the trustee's objection to the debtor's claim of exemption of certain personal property as held as tenants by the entireties. The case was commenced by the filing of an involuntary chapter 7 petition in New Jersey and was transferred to the Southern District of Florida. The debtor consented to the entry of an order for relief but converted the case to a chapter 11 case. The chapter 11 case was later converted back to a chapter 7 case.
Pursuant to 11 U.S.C. section 522(b)(3)(B), an individual is allowed to exempt from the bankruptcy estate "...any interest in prooperty in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety...to the extent that such interest...is exempt from process under applicable nonbankruptcy law. 11 U.S.C. section 522(b)(3)(B). The court allowed the exemption of certain stock. The court found that the stock certificate was issued while the debtor resided in Florida and therefore the Florida law of tenancy by entireties applied. Furthermore, the court held that the trustee failed to introduce any evidence of any joint debt with the non-filing spouse.
The court also examined the exemption of the household goods under section 522(b)(3)(B). The court reviewed the six characteristics of property held as tenancy by the entireties - unity of possession, unity of interest, unity of title, unity of time, survivorship, and unity of marriage. In addition, the parties must have intended to create an estate of tenancy by the entireties. The court found that given the requirement of intent and the unity of time, the issue of whether a tenancy of the entireties was created must be determined under New Jersey law which was the state in which the property was acquired. The court noted New Jersey statutes does provide for the holding of personal property as tenants by the entireties if certain requirements are met. New Jersey Statutes section 46.3-17.2. But the court found that debtor did not meet the statutory requirements as to the household goods as the debtor did not produce a written instrument. In any event, the court apparently noted in footnote one, that in New Jersey property owned as tenants by the entirety is not exempt from the claims of an individual's sole (non-joint) creditors as is the case in Florida.
It is interesting to note that in footnote one, the court stated that in Florida, with limited exceptions, that entireties property does not become property of the estate when only one spouse files for bankruptcy. (citing e.g. In re Kossow, 325 B.R. 478, 483 (Bankr.S.D.Fla. 2005). This would be in contrast to a position that such property is initially part of the estate but is subsequently exempted out.
The debtor also sought to exempt his claim to the Rule 9011 motion that he filed against the petitioning creditors and their attorneys for allegedly having improperly filing the involuntary chapter 7 petition against him. The court held that before the issue of the exemption should be determined, it needed to be determed whether the Rule 9011 motion was property of the estate. The court noted that the 11th Circuit has held that federal law determines whether an interest is property of the bankruptcy estate but that property and interests are created and defined by state law. Witko v. Menotte, 374 F.3d 1040, 1043 (11th Cir.2004). The court found that under Florida law, a cause of action accrues when the last element constituting the cause of action occurs. In re Alvarez, 224 F.3d 1273, 1277 (11th Cir. 2000), Fla. Stat. section 95.031(1). The court found that the 9001 motion cause of action did not arise until the involuntary petition was filed against him and that it was not "sufficiently rooted" in the debtor's pre-bankruptcy past as was the malpractice claim in the Alvarez case. The court therefore found that the issue of the exemption of the Rule 9011 motion was moot as it was not property of the estate.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
By MIREYA NAVARROAfter her husband died, Mary Veronica Santiago fell behind on her bills, and the creditors began to call.
So two years ago, she took refuge in bankruptcy, hoping to have her debts wiped away. But far from providing a fresh start and peace of mind, the Chapter 7 filing thrust Mrs. Santiago, 79, who lives in the East Village, into the center of a case that bankruptcy lawyers say poses a major risk to her and the millions of other New Yorkers who live in rent-stabilized apartments.
The issue, pending before the United States Court of Appeals for the Second Circuit, is whether a rent-stabilized lease can be treated as an asset in a personal bankruptcy, just like a car or a piece of land, and used to pay off creditors.
The trustee overseeing Mrs. Santiago’s bankruptcy thinks so. If that position is upheld, bankruptcy lawyers who are closely monitoring the case say it would make it easier for landlords to evict rent-stabilized tenants if they file for bankruptcy, even when, like Mrs. Santiago, they pay their rent. At a time when housing affordability and income inequality have been driving the debate in the mayoral race, the bankruptcy case could add another element of uncertainty to New York City’s efforts to preserve housing for people with low incomes.
Mrs. Santiago has lived for 50 years in a two-bedroom apartment near Tompkins Square Park, in a neighborhood where unregulated apartments rent for thousands more a month than Mrs. Santiago’s rent of $703. Her main income is a Social Security check and, under normal bankruptcy proceedings, her lawyers said, she would have avoided repaying the $23,000 she owes because she had no assets. “I got scared,” she said, noting that her creditors “threatened that they were going to take me to court.”
But as her case was nearing conclusion, her landlord stepped in with an offer to buy her rent-stabilized lease and produce the funds to pay off her debt. (Mrs. Santiago’s landlord is not among her creditors, but he was notified of the bankruptcy as a matter of course.) The bankruptcy trustee in charge of marshaling her assets accepted the offer, and that decision, challenged by Mrs. Santiago’s lawyers, has been upheld by both a bankruptcy court and a Federal District Court.
In New York City, there were 11,500 individual bankruptcy filings in the 12 months ending June 30, federal bankruptcy court figures show. How many of them involved people with rent-stabilized leases is not tracked by the court.
Rent stabilization laws, a defining element of New York real estate for decades, limit rent increases and allow automatic lease renewals and even survivor’s rights to tenants. In recent years, rent-stabilized leases have been deemed assets in some bankruptcy proceedings.
Now, for the first time, a federal appeals court is being asked to weigh in. The widow’s lawyers argue that a rent-stabilized lease is a public assistance benefit, just like Social Security or disability payments, and should be exempt from the bankruptcy estate. Treating it like an asset, the lawyers said in court documents, undermines the intent of rent-stabilization laws in New York designed to protect tenants deemed in need of assistance with housing.
“This is not what bankruptcy is about,” said Kathleen G. Cully, one of Mrs. Santiago two pro bono lawyers. “What’s next? Are they going to start going after food stamps?”
The case, Mary Veronica Santiago-Monteverde v. John S. Pereira, has drawn the interest of bankruptcy experts and legal aid lawyers who see it as a threat to the housing stability of many low-income New Yorkers. Mrs. Santiago’s case was argued before the appeals court last month by Ronald J. Mann, a law professor at Columbia University and a bankruptcy specialist who has argued cases before the United States Supreme Court.
New York’s unique rent laws and expensive real estate market make a rent-stabilized lease particularly prized. In New York City, 44 percent of the rental units are rent-stabilized and an additional 2 percent are governed by the more restrictive rent-control regulations, according to figures from the Furman Center for Real Estate and Urban Policy at New York University. At least 2.2 million people live in more than a million rent-regulated units in the city, the center said.
Legal aid lawyers who are also watching the Santiago case say the rent laws are essential to help maintain affordable housing in the city — the median income for rent-stabilized tenants is $37,000, compared with $52,260 for market-rate tenants, figures from the city’s Housing and Vacancy Survey show. Some bankruptcy lawyers say they are advising clients with rent-stabilized leases not to file for Chapter 7 bankruptcy or risk being left homeless.
“It’s an unfair money-grab,” said David B. Shaev, the New York state chairman of the National Association of Consumer Bankruptcy Attorneys. “To remove this foundation, this safety net, it’s unconscionable.”
The trustee in Mrs. Santiago’s case, Mr. Pereira, has an obligation to marshal all assets to get her debt paid, said his lawyer, J. David Dantzler Jr. (The trustees, who are not government employees, receive a commission on the assets they are able to gather.) He said that New York law did not intend for leases to be exempt from bankruptcy estates and that any change to that effect should be left up to the state’s lawmakers.
“This is about a fear of what could happen in the future to other tenants in rent-stabilization apartments,” he said. “Our view is that that’s a question for the New York Legislature, not the courts.”
But no one should think that bankruptcy is a painless process, he said. “If you file for bankruptcy, there are consequences.”
The trustee in Mrs. Santiago’s case has proposed an arrangement in which the landlord would pay her debt, pay the trustee and his lawyer, and allow Mrs. Santiago to live out her years in her apartment at a similar rent under a non-rent-stabilized lease “with no succession rights” that could otherwise have allowed her to pass the apartment on to her 50-year-old son, a personal trainer who lives with her and helps support her.
Her lawyers opposed the proposal.
In the realm of consumer bankruptcies, Mrs. Santiago’s is small. She owes mostly credit card companies, she said in an interview. But after her husband, Hector Santiago, died in 2011 she could not keep up with the payments.
The couple moved into their ground-floor apartment in a five-story brick building on East Seventh Street in 1963. Mr. Santiago was the superintendent of their building and of several others in the neighborhood.
The landlord is a limited-liability company whose owner, James V. Guarino, referred questions to his lawyer. The lawyer, Lawrence M. Gottlieb, said in an e-mail that the company “has no intentions of selling the lease or dispossessing Ms. Santiago or renting out the unit for market rent.”
At home, in the cluttered apartment where her family has celebrated weddings, birthdays and holidays, and where her ill husband died at age 80, Mrs. Santiago said she regretted filing for bankruptcy. Her lawyers have reassured her that she has a good chance of prevailing, but first thing every morning, Mrs. Santiago said, she checks her front door for an eviction notice.
“I’m afraid to find a white paper on my door,” she said with her head down, tearing up as she tugged at the edges of her plastic-covered chair.
Copyright 2013 The New York Times Company. All rights reserved.
Ignore your federal student loans and you’ll find yourself in default. That’s when the real trouble starts.
We know federal student loan payments can be difficult to make each month. If you’re not on a repayment plan that factors in your income, the bill can be nearly impossible to pay.
Falling behind is bad. Falling into default is even worse.
Here’s how it all plays out.
The Difference Between Delinquency And Default
In the real world, you default on a loan when you fall behind. Not so in the case of federal student loans.
When you fall behind in your payments on federal student loans, you are delinquent. It means you haven’t lived up to your obligations to make payments to the student loan company.
But it doesn’t mean you’re in default. Default occurs once you’re 270 days past due on your federal student loans.
Both delinquency and default are going to have negative effects on your credit report, but that’s pretty much the end of the similarities.
Consequences Of Federal Student Loan Default
If you’re delinquent on your federal student loans, the credit impact and the collection calls are going to be difficult.
But it’s default that you really need to fear. Once the federal student loan is in default, the entire loan is immediately due and payable. You don’t have the right to get a deferment, forbearance or any other repayment plan – it’s a, “pay in full, cash at the door,” situation.
Beyond that, you lose your ability to get additional federal student loans if you’re in default on your existing loans.
The Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loans. Your employer can take part of your income as well.
The government may choose to sue you for the balance due, though I’ve seen this happen primarily with people who are self-employed or don’t get tax refunds.
That’s to say nothing of the additional fees the government tacks onto defaulted student loans.
Avoid Default Before The Problem Gets Worse
If you’re behind on your federal student loans, catching up before they go into default will prevent the negative consequences.
Thankfully, there are options for avoiding default. You’ve got deferment or forbearance, as well as the possibility of income dependent options.
You can look into some of the other standard repayment plans. Think about consolidating your federal student loans, if that’s an option.
With so many choices when it comes to federal student loans, it seems a shame to let default take over your life.
Walworth County Bar Association nominated and elected Attorney Shannon E. Wynn to the Board of Directors for her third term. Congratulations to Attorney Wynn and thank you to the Walworth County Bar Association.
When you file for bankruptcy, you’re putting yourself under a spotlight. Hide assets or refuse to cooperate and you could end up getting in a whole mess of trouble.
Take, for example, Denny Hecker.
Denny filed a Chapter 7 bankruptcy case in Minnesota.
The trustee demanded certain documents from him, but Denny refused. Denny is now sitting in a jail cell in Oklahoma, convicted of bankruptcy fraud.
This, after his Chapter 7 trustee asked the court to find him in contempt.
Here’s how to avoid being like Denny Hecker.
Bankruptcy Requires Disclosure
When you file for bankruptcy, you’re required by law to disclose all assets and all debts. You’ve also got to provide information about certain past financial transactions.
These rules exist so that the court can be sure that your creditors are treated fairly. After all, you’re looking to wipe out your debts and reorganize your finances – it’s all a matter of quid pro quo.
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As Robert Heinlein famously said, there’s no such thing as a free lunch.
Property Means More Than The House
If we ever sit down to talk, I’m going to ask you about your property.
And if you’re like most of my clients, you’ll think I’m talking about real estate. You’ll be wrong.
Property, in the world of bankruptcy, includes everything you own. That means real estate and cars, but also bank accounts, furniture, clothing, jewelry, cash, coin collections, that treasure trove of old comic books … everything.
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And that property has value. Some of it may not have a lot of value (for example, not many people will pay you a a ton of money for your old socks) but the value doesn’t determine ownership.
Disclose it all or there’s trouble down the road.
Financial Information Requires Documentation
Your financial books and records tell the true story about what you’ve been doing over the past bit of time. Sometimes, your bankruptcy trustee will ask that you hand it over.
That financial information includes bank account statements, credit card statements, tax returns, closing documents from the sale of real estate and business property, and more.
You won’t be required to turn over everything in every case, but when you file for bankruptcy you should expect that your ducks should be in a row.
The Downsides Of Failure To Disclose
If you fail to disclose all of your assets and debts, your bankruptcy case may be thrown out of court.
If an asset isn’t disclosed and the bankruptcy case isn’t thrown out, you lose your right to the property. That includes the undisclosed personal injury lawsuit, by the way.
And if you have been found to have concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers then your bankruptcy discharge may be denied.
Worse still are the potential criminal penalties. We won’t go into that here, buy suffice to say you probably don’t want to be wearing an orange jumpsuit (in spite of the fact that orange is the new black).
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I Can Protect You Now – But Not Later
If you tell me about something before your bankruptcy case is filed, I can help you work through the potential issues. But once the wheels are in motion, there’s no way to turn back the hands of time.
Problems can be solved or avoided entirely before the case is filed. If not, then we simply don’t file your bankruptcy case.
But once filed, your problems become set in stone.
Best to tackle the issues while you’ve still got some wiggle room.
Photo courtesy of Ariela Beal.
Miami Personal Bankruptcy Lawyer Jordan E. Bublick has over 25 years of experience in filing Chapter 13 and Chapter 7 bankruptcy cases. His office is centrally located in Miami at 1221 Brickell Avenue, 9th Fl., Miami and may be reached at (305) 891-4055. www.bublicklaw.com
New mortgage modification rules make it easier to combine a mortgage modification, including under HAMP with a Chapter 13 Bankruptcy. Combining a HAMP mortgage modification may be beneficial to many homeowners.
The filing of a chapter 13 bankruptcy generally stays all foreclosure and collection actions by mortgage companies and other creditors. This allows a person to formulate a chapter 13 plan to reorganize their financial situation.
A typical homeowner who owes more on their home than it is valued at will propose a chapter 13 plan to avoid their second mortgage lien and categorize it with other unsecured claims, such as credit cards. The homeowner will also file a HAMP mortgage modification request if they haven't already file it. The chapter 13 plan will provide for payment of the estimated and anticipated HAMP modified mortgage payment. The chapter 13 plan provides also provides for a percentage dividend to unsecured creditors.
Filing for a HAMP modification together with a chapter 13 bankruptcy may increase the likelihood of obtaining a HAMP modification for various reasons, including the increased feasibility of making the new payment for the first mortgage, as the second mortgage is avoided and categorized as an unsecured creditor. Also, as the HAMP is being filed in the context of the chapter 13 case, it may receive more prompt review by the mortgage company.
A typical HAMP modified mortgage payment is calculated as 31% of the homeowner's gross income. The 31% amount would cover principal, interest, taxes, insurance and associations.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.
Whether a business is incorporated or not can have a dramatic impact on the outcome of a bankruptcy case, especially in Chapter 7 cases where the bankruptcy trustee has the power to sell non-exempt assets. Successfully filing a business bankruptcy in Nebraska depends on understanding the important difference between incorporated and unincorporated business assets.
Let’s assume a debtor owns a paint store that has $100,000 of liabilities and $25,000 of inventory and another $25,000 of receivables. Looking at the business as a whole it is apparent that the business is insolvent—it has $50,000 of assets (the inventory plus the receivables) but $100,000 of debt. If I were to ask you what the business is worth you might be tempted to reply that it is worth nothing since there is twice as much debt as there are assets. Nothing could be further from the truth.
If the paint store is not incorporated, the bankruptcy trustee will see $50,000 of assets to liquidate and will probably order the debtor to cease business operations and demand immediate possession of the store. In an unincorporated business entity the business assets are not connected to the liabilities—they are separate and distinct things. To the business owner they are connected, but not to the bankruptcy trustee. The trustee has the power to sell the assets and to pay a pro-rata distribution to all of the debtor’s creditors, not just the business creditors. In the process of liquidating the assets, the business is destroyed and the debtor is left to find another career.
In an unincorporated business entity the business assets are not connected to the liabilities—they are separate and distinct things.
Quite a different outcome is achieved by the debtor who incorporated the business. In the above example, the debtor does not own the inventory or receivables. Rather, the debtor owns stock in a company that owns $50,000 of assets and owes $100,000 of debt. The stock of the company is worthless in this example and the trustee will not liquidate the business.
So, does this mean that a debtor should immediately incorporate their business before filing bankruptcy? The answer is probably yes, but incorporating a business to protect the assets does not automatically fix the problem. First, transferring $50,000 of free and clear assets to a new corporation merely creates another non-exempt asset, namely, stock in a company worth $50,000. The assets may have been transferred, but the liabilities were not. Creating liabilities in the new company takes time as old debts get paid off and new debts are created in the new company. This can be a slow process. Also, the Chapter 7 Trustee is empowered to undo transactions through what we call the Fraudulent Conveyance Act—defined as a transfer of assets from one person or entity to another without receiving equivalent consideration in return. So, if assets are not carefully transferred and new debts are not correctly incurred by the new company, the Trustee may claim the entire transfer to be a sham and go after the assets.
The point of this discussion is not to advise debtors how to transfer assets to evade the long reach of the bankruptcy trustee, but rather to warn potential debtors of the inherent danger of taking an unincorporated business into Chapter 7. Careful planning is required, and unincorporated business debtors may want to consider filing a Chapter 13 payment plan instead of risking income generating assets in the Chapter 7 liquidation process.
How long a bankruptcy case lasts depends on which chapter you file. Chapter 7 bankruptcy can eliminate or discharge eligible debt within a matter of months. Chapter 13 bankruptcy can help you repay debt obligations within an average of 3 to 5 years. Since each person’s situation varies, the length of your case may also [...]
This is the case of Gail Sanders who lives on 60th St. in Chicago, Illinois. She is interested in filing a Chapter 7 bankruptcy to eliminate credit card debt. Gail has never filed bankruptcy before. She is not a homeowner. She is renting. Her landlord is St. Edmunds Commons. She has a yearly lease which+ Read MoreThe post Chapter 7 Fresh Start Recommendation appeared first on David M. Siegel.
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