A while back I wrote an article about the importance of keeping records and receipts, as they are necessary in a bankruptcy case (see http://bklaw.com/bankruptcy-blog/2008/11/receipts-and-documentation/). This requirement was recently revisited by the 9th Circuit Court of Appeals in In re Caneva, 550 F.3d 206 (9th Cir. 2008). In that case, the court held that a debtor filing bankruptcy would be denied his discharge because he failed to maintain or preserve adequate books and records from which the Trustee in bankruptcy (and creditors) could assess the debtor’s financial condition.
This is one of the prerequisites to obtaining a discharge in a Chapter 7 case. 11 U.S.C. 727(a)(3) states that one of the bases for denial of a discharge in a Chapter 7 case is where the debtor “has concealed, destroyed, mutilated, falsified, or failed to keep or preserve any recorded information, including books, documents, records, and papers, from which the debtor’s financial condition or business transactions might be ascertained, unless such act or failure to act was justified under all the circumstances of the case.”
The court in Caneva opined that this is particularly true where the debtor is self-employed or operating a business, but it is required in all cases.
Caneva
The New Jersey Products Liability Act (PLA) applies to lawsuits where a consumer sustains injury because of alleged defects in product design. The law permits a plaintiff to prove product defect by showing that the product failed to contain adequate warnings or instructions.
The New Jersey Appellate Division of the Superior Court recently reviewed an appeal filed by a manufacturer of loft beds. The plaintiff, a college student, recovered a verdict of nearly $180,000 when he was awakened from sleep and fell out of his loft bed, dislocating his shoulder.
The loft bed was six feet off the floor. There were no warning labels on the loft bed.
At trial, plaintiff presented the testimony of an expert safety engineer that a barrier should have been built into the bed to prevent sleeping occupants from rolling out of the bed and falling from height.
YOU BE THE JUDGE: Are consumer warnings always required?
The appellate court reversed the verdict. It held that a manufacturer has a duty to warn about hidden or latent dangers. But there is no duty to warn or instruct about risks that should be obvious to product users. In other words, a manufacturer has an absolute defense to any claim of a failure to warn where a risk is obvious or known.
The decision points out that a courtroom can bring justice and may be the only way to protect your rights. We know courtrooms; we have harnessed the power of the law in courtrooms to bring justice for our clients for decades. Please contact us to discuss how we can help you in a new lawsuit or provide a “second opinion” about your pending lawsuit. There is no obligation for the initial consultation.
The New Jersey Law Firm and its attorneys are dedicated to client-driven results and protecting individual rights and business interests. For 40 years, the Law Firm has been recognized for sound legal judgment, immigration laws, real estate cases, litigation, contracts and advocacy in serving the transactional needs of both individual and business clients. If you need assistance with business or corporate formation and operations, or you seek legal advice about insurance defense, arbitrations, wrongful termination, discrimination, personal injury, environmental issues, bankruptcy, insurance, civil rights and other litigation alternatives, the Law Firm has the comprehensive experience, foresight, skills and talent to assist you to safeguard your assets, interest and investments. The New Jersey Law Firm’s highly devoted, motivated, experienced, skilled lawyers/attorneys and effective legal professionals are always there to assist you.
According to a recent article regarding Georgia bankruptcy published in the Atlanta Journal Constitution, it is nothing new that Georgia has one of the highest bankruptcy rates in the nation. What is new, suggests the AJC article, is who is filing: large numbers of people who have not previously had problems with financial instability.
With unemployment exceeding 1 percent, a real estate market in shambles, and many laws in place which support creditors, Georgia has had one of the highest bankruptcy rates for years. In 29, and even here in early 21, the numbers of people in Georgia filing personal bankruptcy continue to increase. These increasing numbers are partially the result of the large numbers of filers who are experiencing financial instability for the first time.
Richard Thomson, a partner at the Atlanta-based bankruptcy law firm Clark & Washington, said his firm is taking on an increasing number of higher-income professionals as clients. These higher-income filers simply can’t pay for all of their assets and possessions – boats, expensive cars, etc. As a result, they are filing bankruptcy as a means to start over, and their possessions are often given up as part of the process. According to Thomson, “They’re just saying ‘Take it. It’s not worth the effort anymore. I can’t keep up with it.”
Susan Blum and I are seeing the same trends here at Ginsberg Law Offices. While our firm has regularly handled cases for formerly high earners and individuals with substantial assets, we are seeing more and more people who start our meetings by saying “I never in a million years thought I would ever end up talking to a bankruptcy lawyer?.” In many cases, clients who had previously enjoyed a comfortable lifestyle wait until disaster is about to strike before calling our office, perhaps in the expectation that their situations will improve. And more and more of these clients are turning to a Chapter 7 liquidation rather than a Chapter 13 reorganization.
According to the National Bankruptcy Research Center, over half of Georgians filing between January and November 29 filed Chapter 7 Bankruptcy. In a Chapter 7, most debts are wiped out, but so are assets that aren’t protected by exemptions – second cars or vacation homes, for example. 47 percent filed Chapter 13 Bankruptcy, which allows consumers to hold on to a house and car but requires that they repay a portion of their debts generally over a five year period. A Chapter 13 is more or less a reorganization of debt.
These percentages are new for Georgia, which traditionally has been dominated by Chapter 13 filings, as debtors were most concerned about holding onto a house and accumulated equity. Currently, many homeowners have little equity or owe more than their houses are worth, which may be one reason for the spike in Chapter 7 filings.
According to Consumer Credit Counseling Service of Greater Atlanta, one in five consumers receiving recent pre-bankruptcy counseling said avoiding foreclosure was the primary reason for seeking bankruptcy protection. Georgia’s foreclosure process is the fastest in the nation, as it occurs without court or government supervision and takes only a week. A bankruptcy filing is the only realistic option for most Georgians seeking to delay a public auction of their homes.
I (Jonathan) have been representing individuals in Chapter 7 and Chapter 13 cases for over 2 years and I can only remember two or three times when the demand for our services was so high. The Congressional Budget Office says that the recession is over but I am not seeing any indication that this is true.
Steps to Take Before Filing Chapter 7, Chapter 13, or Chapter 11 Bankruptcy in Tucson
Bankruptcy is a legal proceeding in which a person who cannot pay his or bills can get a fresh financial start. The first step is to stop using credit in any form. You can still use your debit cards normally but no new charges on credit cards or new personal loans. Any recent debts may considered fraudulent or an abuse. The second step to consult with an experienced bankruptcy lawyer who will guide you through this complex area of law.
Bankruptcy is a very complicated and confusing area of law. It is critical that you consult with an attorney experienced in bankruptcy before you make any mistakes that may delay and prevent your filing. Third, you need to complete a Credit Counseling Class. Within 180 days before you file chapter 13 bankruptcy in Tucson, you must receive budget and credit counseling from an approved credit counseling agency. The agency will review possible options available to you and will assist you in reviewing your budget.
Some of these agencies offered debt management plans (DMP), which is a plan to repay some or all of your debts. They organize and offer a repayment plan to your creditors. If your creditors agree, you start sending the DMP one monthly payment and they distribute payments to your creditors as agreed. If you are able to complete the program, you will have paid off all of your credit card debts.
Is a Debt Management Program a good idea? A DMP can be a good idea for some. However, counseling agencies have been known to force individuals into a DMP when bankruptcy may actually be a better option for them.
When speaking to a debt counselor you should keep the following in mind:
• Bankruptcy is not necessarily to be avoided at all costs. In many case, bankruptcy may actually be the best choice for you.
• If you agree to a debt management plan that you can’t afford, you may actually end up in bankruptcy anyway.
• Entering a DMP will be reported to credit bureaus and will also negatively affect your credit score.
• Debt management programs generally only work with credit card companies. Banks, car lenders, payday loans stores generally refuse to work with DMPs. If you have more than credit card debt then a DMP probably won’t provide much help.
It is important to note that just because an agency is “approved” for bankruptcy counseling, does not guarantee that the agency is good. Even the good agencies may not be able to help if you are already facing deep financial trouble.
Beware of any debt management program that promises that you can pay off your debts at a fraction of what you owe. Many of these programs are scams with only the intent to your money. I meet people every week who have been the victim of this type of scam. My experience is that most creditors will not consider settling for less than the total owed without a lot of pounding your head against the wall and a ton of documentation regarding your finances. Even then, they generally will deny any reduction.
For debt relief and bankruptcy help in Tucson, it is a good idea to contact an experienced bankruptcy attorney first. Unlike a credit counseling agency, a bankruptcy attorney is qualified to give you legal advice to assist you with your financial situation. They can also refer you to a legitimate debt management program if you want to explore that option.
A number of stories have recently appeared in bankruptcy and consumer rights blogs suggesting that the Atlanta based collection firm Mann, Bracken, LLC has gone out of business. On his Caveat Emptor blog, Minnesota bankruptcy attorney Sam Glover has written several posts about the Mann, Bracken firm including one on December 22, 29 stating that the calls to the firm’s phone number instructs callers to communicate directly with their creditors. I called several numbers listed for Mann, Bracken but the calls were answered by a message that “all circuits are busy, try your call again later.”
Although based in Atlanta, Mann, Bracken has a national practice and it has apparently been growing by merging with other law firms. I found a web site called paymbw.com which purports to be a payment gateway for debtors to make electronic check or credit card payments on debts being handled by Mann, Bracken. This site notes that Mann, Bracken is the successor by merger to Wolpoff & Abramson L.L.P., and Eskanos & Adler P.C., two collection law firms well known to debtor’s lawyers.
The domain mbllc.com has a “coming soon” page and the registration information for that domain is private. I looked up the contact information for the partners. Douglas Mann’s shows him as an inactive lawyer affiliated with Mann, Bracken. Chris Bracken’s registration shows a gmail.com email address, a business address at Mann, Bracken’s location, but the space for the law firm information is blank. Two other partners – Bill Layng and Steve Knezo – are now affiliated with other law firms.
Atlanta TV station WSB sent a crew to the Mann, Bracken offices and found deserted premises along with handwritten placards stating that the firm has closed down. According to WSB, Mann, Bracken was associated with a large debt collector called Axiant, which is now in Chapter 7.
Based on all the information I can gather, the law firm of Mann, Bracken is no more. However the demise of this firm does not mean that debts owed to clients of Mann, Bracken or Axiant are no longer collectible. Apparently another large debt buyer/collector, NCO, has purchased or is about to purchase Axiant’s accounts.
If you had a deal with Mann, Bracken to settle your debt, you may find that the underlying creditor or a subsequent collection agency may not honor your deal – so hold on to any paperwork you may have. As attorney Glover notes on his blog, you should contact your creditor directly if you have previously been dealing with Mann, Bracken.
Most consumers know bankruptcy can eliminate some types of debt, but they are unsure which type of bankruptcy to consider. There are two types of consumer bankruptcy. Chapter 7 bankruptcy is a type of personal bankruptcy and can be referred to as straight bankruptcy. Chapter 13 bankruptcy is another form of personal bankruptcy and is often referred to as reorganization bankruptcy. While the purpose of both Chapter 7 and Chapter 13 is to help the debtor get back on their feet, each form of bankruptcy accomplishes this in very different ways.
Chapter 7 Bankruptcy: Eliminate Qualifying Debt
In 2005, the United States Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) which changed the eligibility requirements for Chapter 7. The most significant change resulting from BAPCPA is the Means Test. To qualify for Chapter 7 under the Means Test, a person’s income must be less than the median income for their community. The easiest way to qualify for Chapter 7 bankruptcy under the Means Test is if your average income over the past six months does not exceed the median income for your location. Contact a qualified attorney to determine whether you qualify for Chapter 7 bankruptcy.
Chapter 7 will not, however, discharge the obligation to pay secured debt. To keep property where there is an outstanding loan on that property, the bankruptcy candidate must complete a reaffirmation agreement. For instance, many clients have a car payment and do not want to give up their car. By reaffirming the debt, they can keep the car but must continue to make payments on the loan after discharge. The same principle applies to real estate property. Chapter 7 bankruptcy will not eliminate the responsibility to make monthly mortgage payments. However, many indi viduals can save their home by eliminating credit card debt in order to afford mortgage payments.
Chapter 13 Bankruptcy: Reorganizing Debt
Chapter 13 bankruptcy is designed for individuals with large amounts of debt who do not qualify for Chapter 7. The distinguishing feature of this type of bankruptcy is the Chapter 13 plan. The debtor and his attorney develop a Chapter 13 plan and the trustee and creditors approve the plan. Under the plan, the Chapter 13 debtor must pay back a portion of outstanding debt over a 3-5 year period. During this time period, creditors cannot contact or harass the debtor. Once the debtor has completed the plan, the court will grant a discharge of some or all of the remaining debt.
To qualify for Chapter 13, an individual must have unsecured debt below $336,900 and secured debts below $1,010,650. While Chapter 13 does not eliminate secured debt like Chapter 7, it has the added benefit of modifying or stripping down certain secured assets. For example, if the individual owns a home with both a first and second mortgage and the value of the first mortgage exceeds the current value on the home, you may be able to strip off the second mortgage. Such a strip down is one of the features of Chapter 13 to consider when determining which type of bankruptcy is best before filing.
Both Forms of Bankruptcy Provide Relief
Contact an attorney to discuss your options and determine which type of bankruptcy, if any, is right for you. If you wish I can be reached at http://www.firstsourcelaw.com for a free evaluation of your situation.
5 Common Mistakes Bankruptcy Clients Make
Bankruptcy is governed by Title 11 of the United States Codes. Oftentimes, what makes sense in bankruptcy world does not make sense in everyday life. Here are the top 5 mistakes potential bankruptcy clients make.
1. Selling assets in an attempt to get out of debt
What assets you can keep in bankruptcy is governed by the specific statutes of each state known as “exemptions.” This sets forth rules regarding what property you can keep through bankruptcy. Oftentimes, we see clients liquidate their 401(k), or borrow against it, or sell their assets. Carefully consider if you can get out of debt by taking such measures. If at the end of the day, you still cannot get rid of your debt or get it down to an amount that you can deal with, it does not make sense to get rid of assets that would otherwise be protected in bankruptcy.
The best time to consult with a bankruptcy attorney is when you are struggling to stay afloat and simply do not see a way to get rid of all of your debts. Remember, filing for bankruptcy is a tool to shed your legal responsibility to repay the debt. Nothing in the bankruptcy code prohibits you from voluntarily repaying the debt after bankruptcy. It’s not about running away from your debt, but taking a responsible step at facing your financial situation.
2. Getting rid of assets for less than the fair market value
Another mistake clients often make is attempting to hide or get rid of their assets for the fear that they will lose the asset through bankruptcy. Any transfers of assets prior to bankruptcy must be disclosed in the bankruptcy petition. Remember, bankruptcy is for the honest debtor.
3. Repaying an “insider”
It’s a natural instinct to want to pay back family members, or business associates or other people whom you have a close connection to before paying back Discover, Chase or American Express. However, in bankruptcy, this is considered an insider transfer. It must be disclosed on the bankruptcy petition and the Trustee can go after the insider for the money if it was repaid within a certain time prior to filing you’re a bankruptcy petition
4. Incurring more debt in anticipation of bankruptcy
This can happen in two ways. One by tapping into lines of credit or other sources of credit you may have (for example, your home equity line of credit). The debtor may unwittingly convert an unsecured debt into secured. Remember that when you file bankruptcy, the duty to repay the debt on a secured debt is discharged, however, the creditor still has a security interest in the property, and can exercise its right to foreclose or repossess.
If a client maxes out his or her credit card, takes cash advances, takes a trip to Paris, with the anticipation of filing for bankruptcy, the client may be committing fraud. Bankruptcy fraud is a felony punishable by prison time. Credit card companies monitor its users for “abuse” and can object in the debtor’s bankruptcy proceeding. This will almost certainly mean additional attorney fees, and worse yet, non-discharge of your debt.
5. Not being honest
You are hiring your attorney to be able to spot potential issues and figure out solutions. The attorney is your ally and he or she should be treated as such. Maybe you’re simply embarrassed by something in your financial history, or there is something you’ve done that you do not want anyone to find out. The only issue your attorney cannot assist you with is one he or she does not know about. It’s important that you be upfront and honest with your san francisco bankruptcy attorney.
As you probably know, your eligibility for bankruptcy protection is determined in part by your household income. The Bankruptcy Code requires us to calculate your median income by looking at gross income earned by you, your spouse and any other working member of your household during the 6 months preceding the current month. We add up all the income and divide by 6 to arrive at a number. We then compare than number to a median income table provided to us by the Census Bureau and the United States Trustee’s office. This calculation is called the “median income test.”
If you are over median, then a presumption of abuse arises as to your eligibility for Chapter 7 and we must proceed to perform additional calculations (these additional calculations are called the “means test.”).
The addition of the median income and the means test to the consumer bankruptcy process has made bankruptcy a lot more complicated both for lawyers and for individuals. I know several lawyers here in the Atlanta area who used to handle bankruptcy cases, but no longer do so because of the complexity of the median income/means test process. I personally think it is absurd that bankruptcy has become so complicated that a reasonably intelligent person would have almost no chance at figuring out the calculations. If there was ever a reason to avoid non-lawyer “petition perparers” this would be it.
Click on the link to see the current median income table for Georgia.
In any case, I did find an online tool that will allow you to calculate your median income. If you are so inclined, you can download this tool as an iPhone app! While obviously not a substitute for legal advice, this tool, created by a Massachusetts bankruptcy law firm, may help you get a sense of where you stand in terms of Chapter 7 eligibility.