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Stephen Beukas, 47, of Mahwah, New Jersey was sentenced to 21 months in federal prison after pleading guilty to charges in relation to tax evasion and bankruptcy fraud. For several years, Beukas failed to report all income earnings from his dental practice. He also failed to pay taxes on his earnings totaling over $800,000. When [...]
Debt collectors don’t have to stop calling you just because you ask them to leave you alone. Here’s what you need to know.
If you owe money, you’re probably getting calls from debt collectors.
Though some debt collectors can be fairly pleasant people, the reality is that most of these phone calls don’t go well.
When you try to get the calls to stop, they keep coming. Same debt collector, same debt. Same demand to pay.
You get angrier, the situation escalates, and things soon spiral out of control.
Why won’t they stop calling, and what do you need to do to make the phone stop ringing?
Phone Calls Don’t Stop Based On Your Say-So
People who call me about debt collection harassment typically start off by telling me that the phone calls didn’t stop in spite of their best efforts.
I hate to burst your bubble, but in many cases the debt collector hasn’t done anything wrong by calling. There are limits to time and place of phone calls, but a call in and of itself isn’t illegal.
True, it’s a waste of time to keep dialing your phone once you say you’re not going to pay. But there’s no law against wasting time.
How To Stop Phone Calls From Debt Collectors
Under the law, a debt collector must cease communications with a consumer only when the consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer.
It’s also illegal for debt collectors to call you if they know or have reason to know that you’re represented by a lawyer.
Your voice means nothing, and won’t stop the calls.
If The Calls Continue …
… then you may have the ability to sue for a violation of the Fair Debt Collection Practices Act as well as under state laws.
When you sue a debt collector for violating your rights under the collection laws, you can collect money if you win. You can also collect legal fees and costs in connection with bringing the lawsuit.
The way I handle cases like that is by agreeing to be paid a portion of the financial recovery.
You get the calls to stop, plus some money for damages. I get paid a portion of the award for my legal fees.
Of course, we’d both rather just the calls stop. So write the letter, keep proof that you sent it along with a copy of the letter, and let’s hope the calls stop.
If not, you know where to find me.
Image credit: coreycam/Flickr
How To Stop Debt Collector Phone Calls was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
An emergency bankruptcy filing is often chaotic. More important, it’s likely to fail.
Sometimes you get into a tight spot and are looking at an imminent foreclosure, repossession, eviction, execution sale, tax levy, or utility shut-off.
When I say imminent, I mean it’s going to happen in a matter of hours.
I sympathize with your plight. But before you decide to contact me, you should read my thoughts on emergency bankruptcy filings.
Emergency Bankruptcy Filings Are Difficult
When you file for bankruptcy, you’ve got a lot of responsibilities. Documents need to be turned over, numbers crunched, and decisions made in fairly rapid succession.
Miss a document, drop the ball, forget a deadline and you’re out of luck. The court will dismiss your case and send you packing.
As a lawyer, my job is to keep you out of the fire. In order to do that, I’ve got to have every single document at my fingertips before we file your bankruptcy case.
Your emergency situation makes it likely that you don’t have everything at the ready.
That could be a problem for your bankruptcy case – and a problem for me.
Emergency Bankruptcy Filings Are More Expensive
If you come to me asking for help on an emergency basis, expect that I’m going to charge you more money than would otherwise be the case.
After all, I’m going to have to take people from different tasks to get them to help you. I’m going to need to work later as well, largely because I’ve got to handle the work of other clients while also working on your bankruptcy filing.
My supply of waking hours is diminished due to your demands. In purest economic terms, I’ve got to resort to what I call “premium pricing.”
How To Get Me To Handle Your Emergency Bankruptcy Filing
If you want me to represent you in an emergency bankruptcy case, you need to be prepared. Here’s what you’re going to need to do:
- call me with at least 2 full working days in advance of the emergency (foreclosure sale date, etc.);
- have all of your documents in order;
- be prepared to talk with me for at least two (2) full hours during the day, during which time you will remain completely uninterrupted;
- have your credit counseling certification completed within ten (10) hours of our initial conversation;
- be prepared to drop everything and come to my office to sign your bankruptcy papers without complaint; and
- be prepared to drop everything and come to my office again seven (7) calendar days later to sign your remaining bankruptcy schedules without complaint.
Is this difficult? Yes it is.
Can I help? Possibly.
Will I work with you if you’re absolutely organized and willing to put as much into your emergency bankruptcy filing as do I? More likely than not, yes.
Once again – is this difficult? Yes it is.
Image credit: xcode
Why I Probably Won’t Take Your Emergency Bankruptcy Filing (And Why I Might) was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Written by: Robert DeMarco
United States Bankruptcy Laws – The Beginning
The subject of bankruptcy was not addressed in the Constitutional Convention of 1787 until its waning days by Charles Pinckney of South Carolina. Warren, Charles, Bankruptcy in United States History, p. 4 (Harvard University Press, 1935). On September 3, 1787, the Bankruptcy Clause, the power of the federal government to establish uniform laws on bankruptcies, was adopted into the Constitution. Id.; United States Constitution, art. I, sec. 8, cl. 4. The bankruptcy power remained unexercised by the federal government until 1800, when Congress enacted the first federal bankruptcy law. Bankruptcy Act of 1800, Act of Apr. 4, 1800, ch. 19, 2 Stat. 19, repealed by Act of Dec. 19, 1803, ch. 6, 2 Stat. 248. The Bankruptcy Act of 1800 lasted three years and closely tracked 5 Geo. II, c. 30 (1732).
The salient features of the Bankruptcy Act of 1800 are:
only merchants were eligible debtors; only involuntary bankruptcy was allowed, on proof of an act of bankruptcy; and the act provided for the discharge of debts as well as the person of a cooperative debtor. It granted a graduated allowance to the conforming bankrupt … and allowed limited property exemptions…. Fraudulent bankruptcy constituted a criminal offense, subjecting the debtor/criminal to a prison term of from twelve months to ten years (but not to capital punishment, as under the English law).
Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 346. However, as indicated above, the statute was short lived. After its repeal in 1803, creditors and debtors were again dependent upon the individual states for rules of law concerning bankruptcy. Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 348.
The Bankruptcy Act of 1841, while short lived (approximately one year), provided a major substantive change to the law of bankruptcy. The Bankruptcy Act of 1841, Act of Aug. 19, 1841, ch. 9, 5 Stat. 440,repealed by Act of Mar. 3, 1843, ch. 82, 5 Stat. 614. First, by virtue of the Panic of 1837, it evidences a shift in the focus from a creditor oriented statute to one that is more debtor oriented. Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 349-40. Second, it permitted voluntary bankruptcy. “A debtor desiring the benefit of a bankruptcy discharge could simply file a petition in bankruptcy, comply with the provisions of the act, and, if the creditors consented, receive a discharge.” Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 349-50. Third, relief was extended to “all persons whatsoever … owing debts.” The Bankruptcy Act of 1841, ch. 9, 5 Stat. 441.
There is no doubt, but that the Bankruptcy Act of 1841 generated much attention and discourse in its day. In fact, in September, 1842, Judge Wells, in the United States District Court in Missouri, held the Bankruptcy Act of 1841 to be unconstitutional and dismissed some 900 pending bankruptcy cases. Bankruptcy in United States History, at 86. Judge Wells, however, was over turned at the Circuit Court level and “[f]or the next fifteen years from the date of the repeal of the Act of 1841, not only was the question of the constitutionality of voluntary bankruptcy not seriously raised, but there was practically no agitation either for or against any National bankruptcy law.” Bankruptcy in United States History, at 87. In short, Americans lost interest in the debate over a national bankruptcy law. Bankruptcy in United States History, at 87-92.
This disinterestedness amongst Americans concerning federal bankruptcy legislation came to an abrupt halt after the Panic of 1857. Bankruptcy in United States History, at 95-98. Nonetheless, it was not until 1867 that there was a new federal bankruptcy statute. Id.; The Bankruptcy Act of 1867, Act of Mar. 2, 1867, ch. 176, 14 Stat. 517,amended by Act of June 22, 1874, ch. 390, 18 Stat. 178,repealed by Act of June 7, 1878, ch. 170, 20 Stat. 99. The battle lines for the debate on the Bankruptcy Act of 1867 were understandably along the Mason-Dixon line. The Northern States seeking passage, while the Southern States expressing opposition.
The Bankruptcy Act of 1867 provided for both voluntary and involuntary petitions and the commencement of proceedings by corporate debtors. As regards the debtor’s discharge, in the first couple years of the Bankruptcy Act of 1867, creditor consent was not required. Subsequently, and for the remainder of the Act’s tenure, some form of creditor consent was required. Also, in keeping with the times, debtors were required to swear their allegiance to the United States of America. Nonetheless, this bankruptcy law too succumbed to the criticism of the day and was repealed in 1878.
DATED: July 8, 2013
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Written by: Robert DeMarco
United States Bankruptcy Laws – The Beginning
The subject of bankruptcy was not addressed in the Constitutional Convention of 1787 until its waning days by Charles Pinckney of South Carolina. Warren, Charles, Bankruptcy in United States History, p. 4 (Harvard University Press, 1935). On September 3, 1787, the Bankruptcy Clause, the power of the federal government to establish uniform laws on bankruptcies, was adopted into the Constitution. Id.; United States Constitution, art. I, sec. 8, cl. 4. The bankruptcy power remained unexercised by the federal government until 1800, when Congress enacted the first federal bankruptcy law. Bankruptcy Act of 1800, Act of Apr. 4, 1800, ch. 19, 2 Stat. 19, repealed by Act of Dec. 19, 1803, ch. 6, 2 Stat. 248. The Bankruptcy Act of 1800 lasted three years and closely tracked 5 Geo. II, c. 30 (1732).
The salient features of the Bankruptcy Act of 1800 are:
only merchants were eligible debtors; only involuntary bankruptcy was allowed, on proof of an act of bankruptcy; and the act provided for the discharge of debts as well as the person of a cooperative debtor. It granted a graduated allowance to the conforming bankrupt … and allowed limited property exemptions…. Fraudulent bankruptcy constituted a criminal offense, subjecting the debtor/criminal to a prison term of from twelve months to ten years (but not to capital punishment, as under the English law).
Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 346. However, as indicated above, the statute was short lived. After its repeal in 1803, creditors and debtors were again dependent upon the individual states for rules of law concerning bankruptcy. Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 348.
The Bankruptcy Act of 1841, while short lived (approximately one year), provided a major substantive change to the law of bankruptcy. The Bankruptcy Act of 1841, Act of Aug. 19, 1841, ch. 9, 5 Stat. 440,repealed by Act of Mar. 3, 1843, ch. 82, 5 Stat. 614. First, by virtue of the Panic of 1837, it evidences a shift in the focus from a creditor oriented statute to one that is more debtor oriented. Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 349-40. Second, it permitted voluntary bankruptcy. “A debtor desiring the benefit of a bankruptcy discharge could simply file a petition in bankruptcy, comply with the provisions of the act, and, if the creditors consented, receive a discharge.” Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 349-50. Third, relief was extended to “all persons whatsoever … owing debts.” The Bankruptcy Act of 1841, ch. 9, 5 Stat. 441.
There is no doubt, but that the Bankruptcy Act of 1841 generated much attention and discourse in its day. In fact, in September, 1842, Judge Wells, in the United States District Court in Missouri, held the Bankruptcy Act of 1841 to be unconstitutional and dismissed some 900 pending bankruptcy cases. Bankruptcy in United States History, at 86. Judge Wells, however, was over turned at the Circuit Court level and “[f]or the next fifteen years from the date of the repeal of the Act of 1841, not only was the question of the constitutionality of voluntary bankruptcy not seriously raised, but there was practically no agitation either for or against any National bankruptcy law.” Bankruptcy in United States History, at 87. In short, Americans lost interest in the debate over a national bankruptcy law. Bankruptcy in United States History, at 87-92.
This disinterestedness amongst Americans concerning federal bankruptcy legislation came to an abrupt halt after the Panic of 1857. Bankruptcy in United States History, at 95-98. Nonetheless, it was not until 1867 that there was a new federal bankruptcy statute. Id.; The Bankruptcy Act of 1867, Act of Mar. 2, 1867, ch. 176, 14 Stat. 517,amended by Act of June 22, 1874, ch. 390, 18 Stat. 178,repealed by Act of June 7, 1878, ch. 170, 20 Stat. 99. The battle lines for the debate on the Bankruptcy Act of 1867 were understandably along the Mason-Dixon line. The Northern States seeking passage, while the Southern States expressing opposition.
The Bankruptcy Act of 1867 provided for both voluntary and involuntary petitions and the commencement of proceedings by corporate debtors. As regards the debtor’s discharge, in the first couple years of the Bankruptcy Act of 1867, creditor consent was not required. Subsequently, and for the remainder of the Act’s tenure, some form of creditor consent was required. Also, in keeping with the times, debtors were required to swear their allegiance to the United States of America. Nonetheless, this bankruptcy law too succumbed to the criticism of the day and was repealed in 1878.
DATED: July 8, 2013
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You can file for Chapter 13 bankruptcy, but if your Plan doesn’t do what it needs to do then your case will fail.
If you’re thinking about Chapter 13 bankruptcy, you’re probably looking to deal with some debts that can’t be handled in a Chapter 7 bankruptcy.
Foreclosures, tax debts, car loans and other issues can be resolved in a Chapter 13 Plan, which is exactly why most people opt for that solution.
But if the Plan doesn’t meet the feasibility test, you’re not going to go very far.
Here’s what it means, and how to navigate the rocky waters of feasibility.
The Requirements Of Your Chapter 13 Plan
When you file for Chapter 13 bankruptcy, your Plan must provide for certain payments to be made to your creditors.
Those payments need to meet or exceed the amount they’d get if you were to file for Chapter 7 bankruptcy and have to sell some of your property.
Those payments must be enough to catch up on your arrears to secured creditors, and to repay your priority debts in full.
Those payments must be made – if they are, the Plan itself passes muster.
The Disconnect Of Your Financial Situation
If your Chapter 13 Plan must provide for payments of a certain amount of money each month for 60 months, you need to show that you’ve got enough money to make those payments.
Your income less your expenses must provide for the ability to fund your Plan.
If you can’t make the payments based on your own income and expenses, you’ve got a problem.
If you can make the payments but your expenses don’t seem realistic, you’ve got the same problem.
That problem, when given a legal name, is that your Plan does not meet the feasibility test.
Fix The Problem By Thinking Ahead
One way I fix the problem of not meeting the feasibility test is by attacking it before the bankruptcy case is filed.
Verify the income, verify the expenses, and make sure there’s enough left over for the Plan payments.
If there’s not enough left over, we’ve got a few options:
- make more money to increase your income;
- reduce some of your expenses; or
- find someone to contribute to your Chapter 13 Plan.
As to the first and second option, it’s often easier said than done. You can’t make more money by snapping your fingers, and some expenses simply won’t budge.
That’s usually why the third option is the winner. We get a spouse or parent to sign an affidavit indicating that they’ll contribute a certain amount of money per month towards the Plan payments, get some backup documentation, and we’re on the road to passing the feasibility test.
Is it easy? No. But if you want your Chapter 13 Plan to succeed, you’ve got to take matters into your own hands.
Image credit: giumaiolini
Why Your Chapter 13 Plan Must Meet The Feasibility Test was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Written by: Robert DeMarco
Bankrupt Laws of England – Queens Anne’s Act
The frustration in England concerning bankrupts continued. In 1 Jac. I, c. 15 (1604), entitled “An Act for the Better Relief of the Creditors Against Such as Shall Become Bankrupt,” it is stated:
For that Fraud and Deceit as new diseases daily increase amongst such as live by buying and selling, to the hindrance of Traffic and mutual Commerce, and to the general Heart of the Realm, by such as wickedly and willfully become Bankrupt…
1 Jac. I, c. 15, sec. I (1604). In its continuing efforts to stem the tide of bankrupts, Parliament continued to increase the powers of the Commissioner to investigate fraud. The Commissioner was now entitled to depose persons thought to be in possession of the bankrupt’s assets. 1 Jac. I, c. 15, sec. V (1604). If a person refuse to attend or give evidence the Commissioner had the right to imprison, without bail, such person until the questions are answered and evidence given. Id. Even more harsh, however, was the treatment of the bankrupt that commits perjury.
And that if upon his, her or their Examination, it shall appear that he she or they have committed any willful or corrupt perjury tending to the hurt or damage of the Creditors of the said Bankrupt to the value of Ten Pounds … the Party so offending shall [pay] or may thereof be indicted … and being lawfully convicted thereof, shall stand upon the Pillory in some public place by the space of two hours, and have one of his ears nailed to the Pillory and cut off.
1 Jac. I, c. 15, sec. IV (1604).
The bankrupt laws continued to evolve thereby increasing the rights and remedies of the creditors. For example, in 21 Jac. I, c. 19 (1623) a debtor indicted for fraudulent transfers was also subject punishment by Pillory and the loss of an ear. 21 Jac. I, c. 19, sec. VI (1623). The severity of punishment, however, reached its pinnacle in 4 & 5 Anne, c. 4 (1705), wherein it is stated:
That if such Person or Persons so voluntarily surrendering him her themselves shall afterwards neglect or omit to discover and deliver his her or their Estates and Effects shall be taken and adjudged to be a fraudulent Bankrupt within the true Intent and Meaning of this Act and thereof being lawfully convicted shall suffer as a Felon, without Benefit of Clergy [the death penalty].
4 & 5 Anne, c. 4, sec. XIX (1705). On the other hand, 14 Car. II, c. XXIV (1662) did afford certain citizens protection from the bankrupt laws. The 1662 Act provides that a commission of bankrupt shall not issue against a person by reason of investments in the Royal Fishing Trade, East India Company or Guiney Company. 14 Car. II, c. XXIV, sec. I (1662).
The punitive aspects aside, the 1705 Act, is the first bankrupt law to actually provide the bankrupt a discharge. The discharge language is as follows:
And be it further enacted by the Authority aforesaid, That all and every Person and Persons so becoming bankrupt as aforesaid who shall within the Time limited by this Act surrender him her or themselves to the major part of the Commissioners therein named and in all things conform as in and by this Act is directed shall be … discharged from all Debts by him her or them due and owing at the Time that he she or they did become Bankrupt….
4 & 5 Anne, c. 4, sec. VIII (1705). The discharge in the 1705 Act was neither automatic nor self-executing. A majority of the commissioners had to find the bankrupt conformed to the Act as a condition precedent to receiving a discharge. The discharge was evidenced by a “certificate of conformity. Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 334. The discharge did not bar or enjoin any subsequent litigation on debts arising before the date the commission of bankrupt issued.. 4 & 5 Anne, c. 4, sec. VIII (1705). It did however, permit the discharged bankrupt to plead discharge as an affirmative defense. In addition to the discharge provision, the 1705 Act permitted, subject to some limitations, the conforming bankrupt to receive as much as five percent of the estate recovered up to a maximum of 200 pounds. 4 & 5 Anne, c. 4, sec. VIII (1705).
While the additional rights afforded the bankrupt under the 1705 Act are significant, it must not be forgotten that the Act was passed for the sole benefit of the creditors. The 1705 Act is entitled “An Act to Prevent Frauds Frequently Committed by Bankrupts” and remained limited in its application to those persons who were merchants or tradesmen. 4 & 5 Anne, c. 4 (1705). The preamble states “[w]hereas many Persons have and do daily become Bankrupt not so much by reason of Losses and unavoidable Misfortunes as to the Intent to defraud and hinder their Creditors of their just Debts and Duties to them Due….” 4 & 5 Anne, c. 4 (1705). Also lets not forget, as stated supra, the 1705 Act introduced the death penalty for fraudulent bankrupts. 4 & 5 Anne, c. 4, sec. XIX (1705). Lastly, one year after the passage of the 1705 Act, Parliament passed 6 Anne, 22 (1706), a primary purpose of which was to require creditor consent as a condition precedent to the bankrupt’s receipt of a discharge. 6 Anne, 22, sec. II (1706).
Parliament passed a comprehensive revision of British bankruptcy law in 1732. 5 Geo. II, c. 30 (1732). The 1732 Act retained the discharge and the allowance features for conforming bankrupts as well as the death penalty for fraudulent bankrupts. 5 Geo. II, c. 30, sec. I and VII (1732). The 1732 Act, while substantively similar to the 1705 Act, was procedurally much more detailed. The conditions precedent for a discharge were spelled out in detail as was the method for enforcing the discharge. More attention was paid to the allowance portions of the Act making clear when and under what situations a dividend or allowance should be paid the bankrupt from the estate proceeds.
The 1732 Act was the bankrupt law that was in place in England during the: (1) American Revolution; (2) Constitutional Convention of 1787; and (3) enactment of the first United States bankruptcy law in 1800. “It thus was the bankruptcy model envisioned by the drafters of the bankruptcy clause of the Constitution and which was followed in material part in the first United States law.” Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 340-1.
DATED: July 7, 2013
1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11
Written by: Robert DeMarco
Bankrupt Laws of England – Queens Anne’s Act
The frustration in England concerning bankrupts continued. In 1 Jac. I, c. 15 (1604), entitled “An Act for the Better Relief of the Creditors Against Such as Shall Become Bankrupt,” it is stated:
For that Fraud and Deceit as new diseases daily increase amongst such as live by buying and selling, to the hindrance of Traffic and mutual Commerce, and to the general Heart of the Realm, by such as wickedly and willfully become Bankrupt…
1 Jac. I, c. 15, sec. I (1604). In its continuing efforts to stem the tide of bankrupts, Parliament continued to increase the powers of the Commissioner to investigate fraud. The Commissioner was now entitled to depose persons thought to be in possession of the bankrupt’s assets. 1 Jac. I, c. 15, sec. V (1604). If a person refuse to attend or give evidence the Commissioner had the right to imprison, without bail, such person until the questions are answered and evidence given. Id. Even more harsh, however, was the treatment of the bankrupt that commits perjury.
And that if upon his, her or their Examination, it shall appear that he she or they have committed any willful or corrupt perjury tending to the hurt or damage of the Creditors of the said Bankrupt to the value of Ten Pounds … the Party so offending shall [pay] or may thereof be indicted … and being lawfully convicted thereof, shall stand upon the Pillory in some public place by the space of two hours, and have one of his ears nailed to the Pillory and cut off.
1 Jac. I, c. 15, sec. IV (1604).
The bankrupt laws continued to evolve thereby increasing the rights and remedies of the creditors. For example, in 21 Jac. I, c. 19 (1623) a debtor indicted for fraudulent transfers was also subject punishment by Pillory and the loss of an ear. 21 Jac. I, c. 19, sec. VI (1623). The severity of punishment, however, reached its pinnacle in 4 & 5 Anne, c. 4 (1705), wherein it is stated:
That if such Person or Persons so voluntarily surrendering him her themselves shall afterwards neglect or omit to discover and deliver his her or their Estates and Effects shall be taken and adjudged to be a fraudulent Bankrupt within the true Intent and Meaning of this Act and thereof being lawfully convicted shall suffer as a Felon, without Benefit of Clergy [the death penalty].
4 & 5 Anne, c. 4, sec. XIX (1705). On the other hand, 14 Car. II, c. XXIV (1662) did afford certain citizens protection from the bankrupt laws. The 1662 Act provides that a commission of bankrupt shall not issue against a person by reason of investments in the Royal Fishing Trade, East India Company or Guiney Company. 14 Car. II, c. XXIV, sec. I (1662).
The punitive aspects aside, the 1705 Act, is the first bankrupt law to actually provide the bankrupt a discharge. The discharge language is as follows:
And be it further enacted by the Authority aforesaid, That all and every Person and Persons so becoming bankrupt as aforesaid who shall within the Time limited by this Act surrender him her or themselves to the major part of the Commissioners therein named and in all things conform as in and by this Act is directed shall be … discharged from all Debts by him her or them due and owing at the Time that he she or they did become Bankrupt….
4 & 5 Anne, c. 4, sec. VIII (1705). The discharge in the 1705 Act was neither automatic nor self-executing. A majority of the commissioners had to find the bankrupt conformed to the Act as a condition precedent to receiving a discharge. The discharge was evidenced by a “certificate of conformity. Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 334. The discharge did not bar or enjoin any subsequent litigation on debts arising before the date the commission of bankrupt issued.. 4 & 5 Anne, c. 4, sec. VIII (1705). It did however, permit the discharged bankrupt to plead discharge as an affirmative defense. In addition to the discharge provision, the 1705 Act permitted, subject to some limitations, the conforming bankrupt to receive as much as five percent of the estate recovered up to a maximum of 200 pounds. 4 & 5 Anne, c. 4, sec. VIII (1705).
While the additional rights afforded the bankrupt under the 1705 Act are significant, it must not be forgotten that the Act was passed for the sole benefit of the creditors. The 1705 Act is entitled “An Act to Prevent Frauds Frequently Committed by Bankrupts” and remained limited in its application to those persons who were merchants or tradesmen. 4 & 5 Anne, c. 4 (1705). The preamble states “[w]hereas many Persons have and do daily become Bankrupt not so much by reason of Losses and unavoidable Misfortunes as to the Intent to defraud and hinder their Creditors of their just Debts and Duties to them Due….” 4 & 5 Anne, c. 4 (1705). Also lets not forget, as stated supra, the 1705 Act introduced the death penalty for fraudulent bankrupts. 4 & 5 Anne, c. 4, sec. XIX (1705). Lastly, one year after the passage of the 1705 Act, Parliament passed 6 Anne, 22 (1706), a primary purpose of which was to require creditor consent as a condition precedent to the bankrupt’s receipt of a discharge. 6 Anne, 22, sec. II (1706).
Parliament passed a comprehensive revision of British bankruptcy law in 1732. 5 Geo. II, c. 30 (1732). The 1732 Act retained the discharge and the allowance features for conforming bankrupts as well as the death penalty for fraudulent bankrupts. 5 Geo. II, c. 30, sec. I and VII (1732). The 1732 Act, while substantively similar to the 1705 Act, was procedurally much more detailed. The conditions precedent for a discharge were spelled out in detail as was the method for enforcing the discharge. More attention was paid to the allowance portions of the Act making clear when and under what situations a dividend or allowance should be paid the bankrupt from the estate proceeds.
The 1732 Act was the bankrupt law that was in place in England during the: (1) American Revolution; (2) Constitutional Convention of 1787; and (3) enactment of the first United States bankruptcy law in 1800. “It thus was the bankruptcy model envisioned by the drafters of the bankruptcy clause of the Constitution and which was followed in material part in the first United States law.” Bankruptcy Discharge, 65 Am. Bankr. L. J. 325 at 340-1.
DATED: July 7, 2013
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You can lose your bankruptcy discharge even after the case is over.
Once you go through bankruptcy and get your discharge, you’re looking at a future free of debt.
If you weren’t totally honest before and during your bankruptcy case, however, you may not be in the clear.
That’s right – your bankruptcy discharge can be revoked, or taken away, if someone finds out about a problem.
Before you panic, here’s the full story.
Rule Of Bankruptcy Revocation
The Bankruptcy Code lets an “interested party” come to the bankruptcy court and ask the judge to revoke (take back) your bankruptcy discharge.
In order to revoke the discharge, it must be proven that you got your discharge by fraud that fraud was not known to the requesting party until after the discharge was granted.
It’s not enough to prove that fraud made one single debt nondischargable – it must have been a big enough fraud to impact the entire case.
Who Is An Interested Party?
Remember that only an interested party is allowed to bring a complaint for revocation of your bankruptcy discharge.
Unfortunately, the U.S. Bankruptcy Code doesn’t define the term “interested party.” Therefore, we’re led to go with common sense definitions.
Some examples of interested parties are as follows:
- you, the person filing for bankruptcy;
- your creditors;
- the trustee assigned to your case;
- the bankruptcy court;
- the Executive Office of the U.S. Trustee; and
- any partners, former partners, spouses, and former spouses.
That doesn’t mean other people are automatically considered to be outside of the definition of interested parties – it just means that we’d need to look at things on a case-by-case basis.
Limitation Of Time TO Seek Revocation Of Discharge
The complaint seeking revocation of discharge must be filed within one year after the discharge was granted.
The court may allow additional time to file the case depending upon the reason for the revocation.
The same rule applies in a Chapter 7 as well as a Chapter 13 bankruptcy case.
Consequences Of Bankruptcy Discharge Revocation
If the discharge is revoked, you’re back in bankruptcy. You still officially owe the debts you wiped out, and the bankruptcy court still has power and authority over you.
If you did bad things, you’re likely going to look at criminal prosecution. That means you’re going to need a criminal lawyer and could be facing fines and jail time.
How Often Revocation Happens
If you’ve done bad things during your bankruptcy case, you’re breaking the law. You have the choice of either coming clean or risking the loss of your bankruptcy discharge. Even worse, you could be facing federal prosecution and jail time for bankruptcy fraud.
Definitely not the outcome your looking for, I’m guessing.
On the other hand, if you’ve been honest and accurate in your dealings with the bankruptcy court system then you shouldn’t need to worry about anyone looking to revoke your bankruptcy discharge.
Image credit: pasukaru76
Can A Bankruptcy Discharge Be Revoked? was originally published on Consumer Help Central. If you're seeing this message on another site, it has been stolen and is being used without permission. That's illegal, a violation of copyright, and just plain awful.
Written by: Robert DeMarco
Bankruptcy Laws of England – Elizabethan Era
The first bankruptcy law, promulgated in 1542 under the reign of Henry VIII, was a remedy designed solely for the benefit of the creditor and directed at merchants and tradesmen. 34 & 35 Hen. VIII, c. 4 (1542). The 1542 Act, entitled “An Act Against Such Persons as Do Make Bankrupt,” was an involuntary proceeding initiated by the creditors in order to facilitate the complete liquidation of all of the debtor’s holdings. The preamble and section I of the 1542 Act provide ample insight into how debtors of the day were perceived as well as the ramifications of being declared a bankrupt:
Where divers and sundry persons craftily obtaining into their hands great substance of other men’s goods do suddenly flee to parts unknown or keep their houses, not minding to pay or restore to any their creditors their debts and duties, but at their own will and pleasure consume the substance obtained by credit of other men, for their own pleasure and delicate living, against all reason, equity and good conscience …the Lord Chancellor … shall have power and authority by virtue of this Act to take … imprisonment of their bodies or otherwise, as also with their [real and personal property however held] and to make sale of said [real and personal property however held] for true satisfaction and payment of the said creditors, that is to say; to every of the said creditors a portion, rate and rate like, according to the quantity of their debt.
34 & 35 Hen. VIII, c. 4. (1542). Perhaps of greater import, however, is what the 1542 Act did not address. The 1542 Act did not discharge the debtor nor did it exempt future earnings or acquisitions of the debtor from execution for the debt. 34 & 35 Hen. VIII, c. 4 (1542); see generally, Tabb, Charles Jordan, The Historical Evolution of the Bankruptcy Discharge, 65 Am. Bankr. L. J. 325, 331-2 (1991).
The 1542 Act was followed by 13 Eliz., c. 7 (1570). The preamble of the 1570 Act exemplifies the frustration England faced in dealing with bankrupts.
[T]hose kind of persons have and do still increase into great and excessive numbers, and are like more to do, if some better provision not be made for the Repression of them; and for a plain declaration to be made and set forth who is and ought to be taken and demand for bankrupt….
13 Eliz., c. 7 (1570). While it had been the general practice under the 1542 Act to limit its application to merchants and tradesmen, the 1570 Act codified the practice. The 1570 Act is distinct from the 1542 Act in two very important aspects. First, the 1570 Act strengthened the provision respecting fraudulent transfers. No longer would the Commissioner have to settle for turnover of the asset fraudulently transferred. The Commissioner was entitled to collect double the loss to the estate. 13 Eliz. C. 7, sec. VI (1570). Second, the 1570 Act created a perpetual bankruptcy estate. If after liquidation of all of the bankrupt’s assets there was a remainder still owing, not only was that remainder not discharged, but the Commissioner retained the right and authority to seize and sell any property subsequently acquired (by any means) by the bankrupt until all creditors were paid in full. 13 Eliz. C. 7, sec. X (1570).
DATED: July 6, 2013
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