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Women’s clothing retailer Coldwater Creek has filed for bankruptcy. The business, originally known as a catalog business 30 years ago, recently filed Chapter 11 bankruptcy protection in Delaware. Coldwater had over 300 store locations in operation but cited declining sales and the downturn of the economy. At one point, the company had revenue peaking at […]
If you’re behind on your private student loans, being sued may be the best thing to happen to you.
The client called in a panic, looking for a lawyer to defend a student loan lawsuit that she’d received the previous evening. $78,000 due as a result of a failed attempt to get through graduate school, the amount was laughable for someone barely making ends meet in Los Angeles.
She needed help, and fast. Her anxiety and fear was palpable.
By the end of our consultation, the client was grinning ear to ear.
A Student Loan Lawsuit Is Not A Judgment
Most people who are being sued don’t understand that when a lender – student loan or otherwise – sues you, that’s merely the beginning of the process. The lender wins only if you do nothing, in which case they take a default judgment against you.
Defend the case, however, and you force the student loan folks to prove every single shred of their case before they have a chance of winning. That includes answering the following questions:
- Does the entity suing you actually own the loan?
- Is the loan legally collectible, or has it been rendered unenforceable due to the expiration of the statute of limitations?
- Is the amount claimed to be due correct?
A Student Loan Lawsuit Makes It Easier To Negotiate
If you owe money for a student loan debt, you’re getting calls and letters from debt collectors. Most of the time, those debt collectors are hired by the servicer of the loan as opposed to the entity that owns the debt.
Even in the rare situation involving a debt collector hired directly by the owner of the loan, the debt collector doesn’t have much authority with respect to negotiating a settlement or payment plan.
Once a lawsuit is filed, however, a lawyer is involved. The lawyer’s got a more direct line to the student loan lender, and a greater ability to work out an agreement with respect to paying off the loan.
The Worst Case Scenario May Be Better Than You Realize
If you don’t defend the lawsuit – or if you defend the case and lose – you’ll be subject to a judgment. The student loan creditor can take a portion of your wages by way of enforcement of the judgment.
That’s bad, right? Not necessarily.
Under California wage garnishment law, for example, a judgment creditor can take the lesser of your earnings above 40 times the state minimum wage, or 25% of your after-tax wages. That means if you don’t earn much, you may end up paying very little to your student loan. The judgment accrues interest at 10% per year, but is valid for only 10 years. Once the judgment expires, you’re no longer liable for the remaining balance.
Compare that with the crushing monthly payment the lender is demanding from you. If the garnishment amount is lower than the amount being demanded, then the judgment may not be such a bad thing after all.
Be sure to review your state’s wage garnishment laws before you make the decision to let the student loan lawsuit go to judgment.
No Fear!
If you get served with a student loan lawsuit, it’s not the end of the world. Whether you find a student loan lawyer with white knowledge or fight the case on your own, remember that you’ve got options.
The key is to take action quickly, and understand the process from all angles.
The automatic stay in the most powerful tool when filing bankruptcy. The automatic stay provides a shield of protection against most collection efforts. In the video below, we discuss just how powerful the stay is when filing a bankruptcy case. David Siegel: Let’s talk about what’s created the minute a bankruptcy case under Chapter 7+ Read MoreThe post Filing Bankruptcy And The Creation Of The Automatic Stay appeared first on David M. Siegel.
Real Housewives stars Teresa and Giuseppe “Joe” Giudice only paid a small fraction of their debt obligations in the total of $7,500 according to their bankruptcy trustee. Due to criminal charges against the couple it is likely creditors can pursue them for payment again. They have outstanding debt obligations of more than $13 million. The […]
In previous blogs, I have written introductory information about the basic process in chapter 13 bankruptcy. In this next series of articles, I will discuss some of the issues surrounding chapter 13. In order to file chapter 13, you must be an individual with regular income. There are limits to the amount of debt you can have and still be eligible to file chapter 13. As of April 1, 2013 the limits are now $1,149,525.00 for secured debt and $383,175.00 for unsecured debt. These numbers are adjusted every three years. If you are close to these numbers, be sure and contact our office to get the current applicable limitations.The post Chapter 13 Bankruptcy appeared first on Tucson Bankruptcy Attorney.
The bankruptcy code provides that the bankruptcy estate includes, with certain exceptions, all legal or equitable interests of the debtor as of the date of the filing of the bankruptcy case. 11 U.S.C. § 541 (a). Section 541 (d), though provides that property in which the debtor only holds "legal title and not an equitable interest" becomes part of the estate only to the "extent of the debtor's legal title to such property, but not to the extent of any equitable interest in such property that the debtor does not hold." The district court stated that the "plain language of section 541 (d) provides that if a debtor holds only legal title to property and not an equitable interest, then the equitable interest in such property is excluded from the estate."
In the case of In re: Marcos Antonio Campuzano, Case 11-CV-22929-KAM (S.D. Fla. 2012), the district court reviewed and upheld the bankruptcy court's ruling that the involved bankruptcy debtor only held bare legal title to a certain boat. The district court noted that this finding was supported by the unrefuted testimony of three witnesses and was therefore not clearly erroneous. The Bankruptcy Court's ruling was based on the unrefuted testimony of witnesses, whom the court deemed credible, that the debtor did not make any payments towards the purchase price of the boat, did not have control of the boat, did not have access privileges at the marina, did not use the boat, and did not have any interest in using the boat. Further testimony was that the debtor agreed to put the title to the boat in his name as at the time of the purchase, the actual owner was not a permanent resident of the United States and had concerns about his ability to be on the title to the boat.
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
Chapter 7 Bankruptcy, Tax Filing Deadline, & Bankruptcy Exemptions!Written by Ken Jorgensen
The goal of Chapter 7 Bankruptcy is to provide a fresh start after suffering from financial turmoil. Most understand that filing bankruptcy is not going to cause the debtors to lose everything own, including the shirt off their backs. The best way to understand a "fresh start" is that debtors are allowed to keep just enough to begin a successful path to financial freedom. Thus, much of a debtor's assets are exempt from being liquidated. Here is how exemptions work: How Much Money Can I Keep?
Here is a tool that correlates with Tuesday's tax filing deadline: Retirement Accounts.
The lawmakers wrote the code to encourage families to save for retirement. As such, funds in IRS designated accounts are exempt. Debtors get to keep them.
Individuals are allowed to deposit up to $4,500 in individual accounts per year. Right now, through Tuesday, folks are allowed to contribute funds for both 2013 and 2014. Thus, up to approximately $9000 can be converted into an exempt asset status. After Tuesday's deadline, debtors can still contribute $4,500 for the 2014 tax year.
Buying groceries, fixing cars, mortgage payments and groceries are other tools to take non-exempt cash and be able to convert it to exempt property from the bankruptcy estate.
Attorney Ken Jorgensen is located in Clovis, California. He handles personal, property and business disputes, including bankruptcy and eviction cases. You can find out more about Ken on Facebook, or at his websites, www.fresnolawgroup.com and www.fresnobankruptcylawgroup.com. He can be reached at [email protected] or by telephone at 1-559-324-1882.
Images courtesy of Images Money at Flickr
The recent case of Javier Milian vs. Wells Fargo & Company, et al,, Case 13-CV-22201-KMM (February 18, 2014) illustrates the importance of a person completing his bankruptcy schedules fully and accurately - including as to unfixed and contingent claim. In this case, the doctrine of "judicial estoppel" was applied to bar the debtor from pursuing a claim against his mortgage lender as he failed to list the claim in his bankruptcy schedules. In this case, the Bankruptcy Court's decision to abstain and also apply the doctrine of judicial estoppel was upheld.
Debtor's Question of Ownership of the Mortgage Note
The debtor/homeowner asserted a defense to Wells Fargo's mortgage foreclosure complaint that it lacked standing as it was not the "holder" of the mortgage note. The day before the foreclosure sale, the debtor pro se filed for chapter 7 bankruptcy and stayed the foreclosure sale. As part of the bankruptcy case, the debtor filed an adversary proceeding and questioned the ownership of the mortgage note by Well Fargo.
Wells Fargo moved to dismiss the adversary proceeding and also requested that the Bankruptcy Court "abstain" from hearing the case arguing that state law issues predominated over bankruptcy issues. The Bankruptcy Court found that the debtor filed the bankruptcy case for an improper purpose and that his bankruptcy schedules failed to list his claim against Wells Fargo as an asset. The Bankruptcy Court ruled that the debtor was "judicially estopped" from raising its claim against Wells Fargo and also found that it was proper that it "abstain" from hearing this claim as there was a pending state court action in which the debtor's rights were being litigated.
Abstention
The District Court held that the Bankruptcy Court's abstention was not in error. The District Court noted that all of the issues raised by the debtor in his adversary proceeding related to his assertion that Wells Fargo did not possess the mortgage note and as such belonged in the state court foreclosure case.
The District Court explained that court's have broad discretion to abstain under 28 U.S.C. § 1334 (c)(1) whenever "appropriate in the interest of justice, or in the interest of comity, or respect for state law." E.S. Bankest, LLC v. United Beverage Florida, LLC (In re United Container LLC), 284 B.R. 162, 176 (Bankr. S.D. Fla. 2002). The District Court found that the majority of the factors that the case law looks to in the determination of whether to abstain leaned in favor of abstention in the case.
Judicial Estoppel
The District Court also upheld the Bankruptcy Court's application of the doctrine of "judicial estoppel" barring the debtor's adversary proceeding. The District Court explained that the judicial estoppel is an equitable doctrine that "prevents a claim in a legal proceeding that is inconsistent with a claim taken by that party in a previous proceeding." Barger v. City of Cartersville, GA, 348 F.3d 1289, 1293 (11th Cir. 2003), Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1284 (11th Cir. 2002). The District Court noted that bankruptcy petitions are required "under penalty of perjury to disclose in their bankruptcy petitions all fixed and contingent assets, including all causes of action that the debtor knows about or that exist at the time the bankruptcy action being, as well as those that the debtors learn about before the bankruptcy case is closed." 11 U.S.C. § 521. The two factors in the application of judicial estoppel in a particular case are whether the inconsistent positions were made under oath in the prior proceeding and whether the inconsistencies have been calculated to make a mockery of the judicial system.
Pro Se Litigants
The District Court's ruling is also instructive to pro se litigant - that is, persons who represent themselves in court with the assistance of an attorney. The District Court noted that "judges cannot and will not give litigants legal advice" and that a litigant does not have the constitutional right to receive personal instruction from the trial court judge on courtroom procedure. The District Court also stated that the constitution does not require a trial court judge to take over the chores for a pro se litigant that would normally be taken care of by a trained attorney. McKaske v. Wiggins, 465 U.S. 168, 183-84 (1984).
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
The discharge in bankruptcy of divorce attorney fees is often in question. Ex-spouses often consider the discharge in bankruptcy of the attorneys' fees of their ex-spouse that they were required to pay by the divorce judgment.
In some cases, divorce related attorney fees owed are dischargeable in bankruptcy, but in other cases they are not. It generally is based on whether the involved attorney fee fits within the bankruptcy code's definitition of a "domestic support obligation" (DSO). A decision issued in the Bankruptcy Court in Miami in 2009 in the case of In re Maria D. Lopez, Case No. 08-18101-BKC-LMI (Bankr. S.D.Fla. April 17, 2009)(Isicoff, J.) provides an an example of the application of the rules. In this case, the Bankruptcy Court held that the involved attorney fees were not entitled to priority status as a "domestic support obligation".
In this case, it was the ex-wife who sought to discharge her obligation to pay her ex-husband's attorney fees that he incurred in their dissolution of marriage case. In the dissolution of marriage case, the family cout awarded the debtor's ex-husband his attorney fees. When the ex-wife filed for bankruptcy under chapter 13, the ex-husband sought to have these attorneys fees paid in full on a priority status as a "domestic support obligation." riority status would require full payment and the lack thereof would subject to claim to status as a general unsecured creditor and typically only a small dividend.
Definition of a Domestic Support Obligation
The Court explained that the Bankruptcy Code provides that a DSO owed to a former spouse is entitled to priority status. The Court noted thought that while an award of attorney fees in some instances may be considered a DSO, not every award of attorney fees in a dissolution of marriage case are entitled to DSO status.
The Court reviewed that for a claim to be considered as a DSO, it must meet all the requirements of section 101(14A) of the Bankruptcy Code. Generally, the claim must be
- owed to a spouse, former spouse, or child of the debtor, or such child's parent or guardian
- be in the nature of alimony, maintenance or support
- established or subject to establishment by reason of a separation agreement, divorce decree, or property settlement agreement or by court order
- not assigned to a nongovernmental entity unless voluntarily assigned for purposes of collection
"In the Nature of Alimony, Maintenance, or Support"
At issue in this case was whether the attorney fees were "in the nature of alimony, maintenance, or support."
The Court rejected the claimant's argument that the attorney fees met the requirement of being "in the nature of alimony, maintenance or support" finding that they instead related to something else - custody, parentage, or visitation.
The Court noted that the determination of what constitutes "support" is a matter of federal law. The Court further noted that in determining whether an award of state court attorneys' fees constitutes "support", the Bankruptcy Court may "only undertake a simple inquiry as to whether the debt can be characterized as 'support'" and that it may look to state law for guidance on whether the obligation should be considered in the nature of "support". Also the Court noted that the state court judgment awarded claimant attorney fees based on the debtor's litigation misconduct and not based on their respective wages or ability to pay.(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
All debt is generally discharged in a chapter 7 bankruptcy case with certain important exceptions. A recent case decided during January, 2014 by the Bankruptcy Court in Miami involved the dischargeability of a dental malpractice claim.
In this case, a former dental patient obtained a judgment for dental malpractice in the Dade-County Circuit Court in 2011. In 2012, the dentist filed for chapter 7 bankruptcy relief. The former patient sought to except the dental malpractice claim from the chapter 7 discharge on the alleging that the dentist obtained his fee under "false pretenses, a false representation, or actual fraud..." 11 U.S.C. § 523(a)(2)(A). The Court noted that the action for exception from discharge was not brought under 11 U.S.C. § 523(a)(6) on an allegation of "will and malicious injury by the debtor to another entity or to the property of another entity." The former dental patient alleged that there was a "false representation" or "fraud" claiming that the dentist did not disclose his drug dependency and lapse in malpractice insurance.
The bankruptcy court judge explained that to establish a "false representation" under 11 U.S.C. § 523(a)(2)(A) requires proof of a false or misleading statement with the intent to deceive, inducing a person to turn over money or property. The court stated that the establishment of a "false representation" requires an "expressed misrepresentation - oral or written" and that "[s]ilence, or lack of communication, cannot deliver proof by a preponderance of the evidence." Hanft v. Church, (In re Hanft, N.D., P.A.), 315 B.R. 617 (S.D. Fla. 2002). In this case, the court did not find that the dentist had made any misrepresentations that were intended to deceive the former patient and cause her to turn over money or property. The court noted that the dentist performed the services while licensed and insured.
The court also found that there was a lack of "actual fraud." The court reviewed that the establishment of "actual fraud" under this section "refers to common law fraud, and requires" the proof by a preponderance of the evidence that 1. there was a false representation made with the purpose and intent of deception, 2. that the representation was relied upon, 3. that the reliance was justifiably founded, and 4. that the person was damaged as a result of the false statement. Field v. Mans, 516 U.S. 59, (1995). The court noted that "actual fraud" may be proven by a misrepresentation that is express or implied, but proof of actual fraud is required and not fraud merely implied in law. The court found that the former patient did not prove express or implied "actual fraud" was committed.
The Court also rejected the former patient's argument that the dentists silence or omissions regarding his drug use or lapse in insurance coverage constituted "fraud" giving rise to an exception to discharge. The Court held that there was no proof that the dentist was under "any duty to disclose facts regarding either his drug use or his business' fiscal operations..." The court stated that no "statute or legal case was presented to prove that illnesses, weaknesses or impairments must be disclosed by medical professionals to their patients."
The Court also held that the dentist's failure to disclose the lapse of the malpractice insurance did not of itself constitute "fraud." The Court distinguished case law presented with regard to the lapse of malpractice insurance involving physicians as opposed to dentists as the Florida regulations as to each profession differ. The Court noted that dentists are cover by the provisions of Chapter 466 of Florida Statutes while physicians are governed by the provisions of Chapter 458. The Court pointed out that while physicians are required to disclose the failure to carry insurance, dentists are not.
Finally, the Court rejected that former patient's argument that malpractice judgments should be excepted from bankruptcy discharge when there was reckless action or their was a lack of malpractice insurance as the U.S. Supreme Court has already rejected that argument in the case of Kawaauhau v. Geiger, 523 U.S. 57 (1998).
The Court though did express sympathy for the unfortunate victim of the dentist's malpractice and suggest that it may be appropriate for the Florida legislature to require dentists to disclose the lack of malpractice insurance as is required of physicians or for the Board of Dentistry to establish a fund "like that established by the Florida Bar for victims of a lawyer's misappropriation or embezzlement."
(305) 891-4055 - Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.
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