Blogs
This has been a long time coming. The first post on a blog meant to educate the public on bankruptcy matters and keep bankruptcy professionals up to date on hot issues within the wonderful (and not so wonderful) world of bankruptcy.
For starters, I simply want to say welcome. And nothing says “welcome” like a listing of public sources that may help you find your path towards financial recovery.
Before I post some really helpful links, I must disclaim a few things. I am in no way a lawyer (yet!) nor am I providing legal advice in violation of any professional code of ethics (California or American Bar Association). Think of me as a legal secretary guiding you to other sources that MAY be able to give you direct legal advice about your specific situation. Comments I make regarding any articles posted, are only that–General comments and opinions. And with that, hopefully the links below may be helpful. Please check back to this first post for updated links as I will add more links over time.
Links For Consumers, Lawyers and Judges
American Bankruptcy Institute: This is the Mecca of all things bankruptcy. Consumers, lawyers and bankruptcy judges use ABI as the go-to place for publications, events, news, statistics, Pro-bono Locators, and live webinars.
ABI Charts and Graphs: ABI also provide charts ranging from frequency of bankruptcy filings, mortgage delinquency trends, housing and real estate trends.
Links For Consumers Re: Pro-Bono and Affordable Solutions For Financial Recovery (Emphasis on Southern California)
Orange County(Ca) Legal Aid Society Hotline: Low income Orange County residents facing the prospect of filing bankruptcy may call this hotline to determine eligibility to be provided with pro-bono legal representation or guidance for your Chapter 7 bankruptcy. This hotline may schedule an in person appointment with an attorney for free if you are eligible. The personnel here are incredibly friendly and very experienced.
OC Legal Aid Society: Legal Genie Bankruptcy Forms and Legal Advice: If OC residents do not qualify for free legal representation yet are still low income individuals who cannot afford an attorney, Legal Aid provides a do it yourself website with forms and access to attorneys for advice during a do-it-yourself process for a nominal fee.
Orange County Public Law Center Bankruptcy Clinic: Another resource for low income OC residents to seek pro-bono legal representation through the potential Chapter 7 bankruptcy. The Public Law Center also represents (although rarely) low income consumer creditors.
Links For Attorneys and Judges
ABI Volo Project: This is a service for practicing attorneys and judges lead by a community of fellow attorneys providing 24 hour updates on game changing bankruptcy Circuit Courts of Appeal decisions directly to your email or phone.
Other Areas of Law Such as Immigration and Taxes as it Relates to Bankruptcy:
FicaroLaw News and Resource Center: This is the hub website for news and resources involving Immigration, Real Estate and Foreclosure, Tax and Bankruptcy.
The Nebraska Bankruptcy Court has issued a new opinion extending greater protection to vehicles owned by unemployed debtors. In the case of Angelita Quintero decided on August 22, 2012, the Court expanded the “Tool of the Trade” exemption provided under Neb. Rev. Stat 25-1556(4) which allows up to $2,400 of protection for a vehicle used in a business or used by a debtor to commute to and from work. The Court extended the protection to debtors who are temporarily unemployed and who intend on returning to the workforce.
"In liberally construing the exemption statutes, this court has been receptive to the statutory interpretation that a debtor need not be currently employed in order to claim a tool of the trade exemption in a vehicle, as long as there is evidence the debtor is only temporarily unemployed as of the petition date and intends to resume working."
In addition to the Tool of the Trade exemption, Nebraska debtors are also able to protect the equity of their vehicle under the “Wildcard” exemption Neb. Rev. Stat. 25-1552 which protects up to $2,500 of any personal property. Thus, debtors are able to combine the Wildcard and Tool of the Trade Exemption and protect up to $4,900 of equity in their vehicle.
The Quintero decision will help many unemployed debtors who were facing the grim prospect of losing their vehicle while searching for a new job.
Filing for bankruptcy for many is the most difficult decision they will ever have to make. It is something completely foreign and new to them. Due to the fact that bankruptcy has such a stigma many people don't discuss it and don’t really understand what bankruptcy is all about. If you take the step in the direction of bankruptcy remember
that if you are in a Chapter 13 you will need Court approval for certain things. This does not mean that you are not allowed to make purchases nor are you being controlled by the Chapter 13 Trustee. It is necessary, however, for the Court and your creditors to know when you are making a major purchase such a vehicle or a home. This also applies if you are opting to sell your home or vehicle. Although it is not the
most ideal situation and it can be a bit of a hassle saving your home and/or getting your financial situation under control; it is completely worth the extra work that being in a Chapter 13 may require of you. When looking into bankruptcy, knowing you are going to be committed to a Chapter 13 plan for 3 to 5 years may be a bit overwhelming, however, you will be able to continue living your life. Depending on your circumstances it may just take a little extra work and communication with your attorney.
It is clear that a tax debt is not dischargeable in bankruptcy if a return for the year in question is not filed. See 11 USC § 523 (a)(1)(B)(i). However, The 2 Year Rule provides that taxes due based upon a late filed return (filed after its due date and any extensions) are dischargeable if... Read More »
Court case not the way Whataburger likes it – Houston Chronicle.
As H. Anthony Hervol, a San Antonio lawyer who defends individuals in debt-collection disputes says, Whataburger’s action is “very unusual.”
It is not usual for an employer to sue a collection agency on behalf of an employee who is receiving harassing debt communications at work. Usually, the employee is left to deal with the harassment on their own and hope that they don’t lose their job as a result of the repeated phone calls. However, Whataburger has sued NCO for what it calls harrassing phone calls which interfered with their employees’ execution of duties.
Seeking unspecified damages, the lawsuit claims NCO placed over 50 calls to the restaurant’s toll free number in an attempt to collect a debt from an unnamed employee. Twenty seven of those calls were made after NCO was sent a cease and desist letter.
Consumers who are behind on their debts are consistently pelted with phone calls to their home, employers, neighbors and family members. The Fair Debt Collections Act (FDCPA) was designed to protect consumers from creditor harassment, however, many creditors blatantly ignore or gleefully push the boundaries of the FDCPA. If you can prove that a creditor violated the provisions of the Act you may sue the creditor for damages. Keep in mind, however, that the FDCPA only applies to debt collectors who work for collection agencies and not debt collectors that are employed by the original creditor. Once you have made the determination that the calls are coming from a collector and not the original creditor, here are 3 steps to take.
1. Determine Whether the Communication is Abusive. Calling a third-party and asking them to pass along a message (neighbor’s, family members, etc.), calling you at work after being told you cannot take creditor’s calls there and failing to cease and desist after a written request are all impermissible communications under FDCPA. Threatening you with arrest, war dialing (repeated and continuous calls), abusive messages and profanity are impermissible as well.
2. Send a Cease and Desist Letter. Notify the creditor in writing to stop the abusive contact. Send certified mail with return receipt requested so that the creditor has to sign for it and you have documentation their received it. Always keep a copy of any letters you send to them in case you need to use them in court. The letter should state that you want the creditor to cease all communications with you. Under the law, the creditor must stop calling you to collect the debt, however, they can contact you to let you know what steps the creditor will take if the debt is not paid. This is where the next step comes in handy.
3. Keep A Communications Log. Make notes of dates and times of the calls and who the calls were made to. If legal in your state, record the calls. Save all voice mails and cell phone bills which prove the communication. This can be used as evidence if the creditor does not comply with your cease and desist letter. If you seek to sue the collector, an attorney will want to see this as well as a copy of the cease and desist letter.
The Sixth Circuit Court of Appeals recently held that Michigan's bankruptcy-specific exemption statute is constitutional under the Bankruptcy Clause and Supremacy Clause of the United States Constitution.
Historically, Michigan has allowed bankruptcy debtors to use the federal exemptions under 11 U.S.C. § 522(d), the general state exemptions under M.C.L. § 600.6023, or the state exemptions pursuant to M.C.L. § 600.5451 that are specific to debtors in bankruptcy (prior to it being declared unconstitutional).
Michigan is one of a few states that has a bankruptcy-specific exemption statute available to bankruptcy debtors only. In the Western District of Michigan, the constitutionality of the bankruptcy-specific scheme was called into doubt by the Hon. James D. Gregg in In re Pontius, 421 B.R. 814 (Bankr. W.D. Mich. 2009) and the Hon. Jeffrey R. Hughes in In re Wallace, 347 B.R. 626 (Bankr. W.D. Mich. 2006). Contrarily, the Hon. Scott W. Dales, held that the bankruptcy-scheme was constitutional in In re Schafer, 428 B.R. 720 (Bankr. W.D. Mich. 2010), pursuant to Sixth Circuit precedent and Congress' delegation of power to the states pursuant to 11 U.S.C. § 522(b) to create bankruptcy exemptions. Read More ›
Tags: 6th Circuit Court of Appeals
The Sixth Circuit Court of Appeals recently affirmed a decision of the United States District Court for the Southern District of Ohio based upon the District Court's holding that the automatic stay does not prevent the issuance of injunctive relief. Read More ›
Tags: 6th Circuit Court of Appeals
I had coffee with a great friend of mine who began his own bankruptcy practice a few years ago. He explained that he recently acquired a very difficult case involving a debtor with a high paying job and he expected a brutal Chapter 13 confirmation process—i.e, he expected the Trustee to demand a significant monthly payment. Apparently the debtor had bad luck in a business venture and was now deep in SBA loan debt requiring a bankruptcy despite his job that paid a six-figure salary. As I continued to question my friend about the nature of his client’s debt, it became clear that the majority of his debt came from the business failure. The good news for my friend and his client is that there would be no brutal Chapter 13 confirmation hearing. In fact, there would not even be a Chapter 13 case at all.
One of the greatest loopholes in bankruptcy law allows debtors with high income to qualify for the speedy Chapter 7 discharge even though it is obvious that they have the financial ability to repay some or all of their debt. Generally speaking, if a debtor has the ability to repay some or all of his debt, then Chapter 7 is not allowed and a debtor must commit to repaying a portion of the debt in a 3 to 5 year Chapter 13 payment plan. However, if a majority of the debt is not consumer debt a person is allowed to file Chapter 7 regardless of their income or ability to repay debt.
Bankruptcy Code section 707(b) provides the general rule:
"After notice and a hearing, the court, on its own motion or on a motion by the United States trustee, trustee (or bankruptcy administrator, if any), or any party in interest, may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts, or, with the debtor’s consent, convert such a case to a case under chapter 11 or 13 of this title, if it finds that the granting of relief would be an abuse of the provisions of this chapter."
Omaha millionaire Ted Baer was allowed to complete a Chapter 7 case despite objections filed by a creditor and a monthly budget that allowed $4,580 for retirement savings, $2,000 of food expenses and $1,500 per month for vehicle payments on monthly income of $20,065. Why? Because most of his debts were business related.
In the case of Dr. Steven Lapke, (Case number 07-81140) the Nebraska Bankruptcy court stated the following:
"For purposes of § 707(b), a debtor’s debts are primarily consumer debts if more than half of the dollar amount owed is on consumer debts. In re Coleman, 231 B.R. 760, 761 (Bankr. D. Neb.1999); In re Shelley, 231 B.R. 317, 319 (Bankr. D. Neb. 1999); accord Price v. U.S. Trustee (In rePrice), 353 F.3d 1135, 1139 (9th Cir. 2004); In re Booth, 858 F.2d 1051, 1055 (5th Cir. 1988); In re Beacher, 358 B.R. 917, 920 (Bankr. S.D. Tex. 2007); In re Snyder, 332 B.R. 641, 643 (Bankr.M.D. Fla. 2005); In re Praleikas, 248 B.R. 140, 144 (Bankr. W.D. Mo. 2000). This calculation is to be made as of the date of bankruptcy filing. In re Penny, 297 B.R. 737, 739 (Bankr. C.D. Ill. 2003)."
Debts normally classified as “consumer” debts include credit card debt, medical bills, student loans, home mortgages and auto loans.
Bankruptcy attorneys frequently assume the nonconsumer debt exception only applies to business debts, however it also includes tax debts, personal injury claims and other tort debts. If credit cards were used primarily to fund business operations, that too may be deemed a nonconsumer business debt. Some debtors have argued that student loan debts are not consumer debts but have received little success.
If the majority of debts are not consumer debts, it is important that the bankruptcy schedules reflect this fact. The list of debts in such a case should specifically state whether each debt is a consumer or nonconsumer debt, and it is helpful to provide the U.S. Trustee with a worksheet that totals each type of debt.
Sad news out of London today. The 10 year old Belgian stallion named London, ridden by Gerco Schroeder in the 2012 Olympics, and which took the silver in both team and individual show jumping has been seized due to bankruptcy proceedings by the owners. The horse, along with other horses owned by the same company was seized shortly after the conclusion of the jumping competition.
http://www.examiner.com/article/silver-medal-winning-olympics-horse-seized
Of course the bankruptcy trustee was hoping that “London” won gold instead of silver. More for the estate creditors I am sure.
Sad news out of London today. The 10 year old Belgian stallion named London, ridden by Gerco Schroeder in the 2012 Olympics, and which took the silver in both team and individual show jumping has been seized due to bankruptcy proceedings by the owners. The horse, along with other horses owned by the same company was seized shortly after the conclusion of the jumping competition.
http://www.examiner.com/article/silver-medal-winning-olympics-horse-seized
Of course the bankruptcy trustee was hoping that “London” won gold instead of silver. More for the estate creditors I am sure.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.