3 January 2011
States across the country have passed various laws to aid their residential homeowners to face the foreclosure crisis that has been sweeping the country. Massachusetts has passes two different Acts, the second largely building on the provisions of the first, directly aimed at helping Massachusetts homeowners keep their homes and avoid foreclosure. The first was “An Act to Preserve and Protect Home Ownership”, which applied to foreclosures initiated on or after May 1, 2008. It was designed to help financially distressed homeowners with foreclosure relief. Its most important component was a “right to cure,” which provided homeowners a period of time to pay a mortgage arrearage/delinquency and avoid entering the usual foreclosure process in Massachusetts. Massachusetts then went further to protect homeowners. Massachusetts enacted "An Act to Stabilize Neighborhoods Through the Protection of Tenants of Foreclosed Properties" which in pertinent part became effective August 7, 2010. It extended the right to cure established by the prior law to 150 days, unless the foreclosing entity took certain steps, including “engag[ing] in a good faith effort to negotiate a commercially reasonable alternative to foreclosure.” If the lender complies and the negotiations do not work, it can start the usual foreclosure process earlier than the 150 days, but no less than the 90 days established by the first Act.
The aim of these Massachusetts laws is clear; get the lenders to the bargaining table. This is necessary because sources report that the federal programs, such as the (Obama’s) Home Affordable Modification Program (HAMP), have not worked as expected and widespread foreclosures are expected to continue for many months to come.
Keep in mind, this posting only briefly discusses one part, albeit an important part, of these Massachusetts foreclosure laws, so there may be other parts that could help you. With so much as stake, it is advisable to consult with an attorney to learn how these laws, and other foreclosure defense related laws, could help you.
Thursday, January 27, 2011
Cash advances and bankruptcy, do they mix?
1 January 2011
Cash advances prior to bankruptcy are common, but do raise some concerns that should be addressed by a professional to assess the risk of bad results in a potential bankruptcy prior to filing. If the cash advances were recently taken, or as bankruptcy practitioners may describe as “on the eve of bankruptcy,” there are a number of sections of the bankruptcy code that may apply to the circumstances.
At least one section that may apply and to watch out for is 523(a)(2)(C)(i)(II). It states “cash advances aggregating more than $875.00 . . . on or within 70 days of the [the bankruptcy filing date] are presumed to be nondischargeable . . . .” “What does this mean,” one might ask. Well, as I also state in my last posting, it doesn’t automatically mean the cash advances are not eliminated (nondischargeable). The creditor (or the bankruptcy trustee assigned to your case) needs to take affirmative action. If the creditor (or trustee) does not take appropriate action to begin with, as long as your listed the debt on your petition properly, the debt should be discharged. But a creditor (or trustee) can file an adversary proceeding, which is essentially a law suit related to a bankruptcy case, to determine if the cash advances can be eliminated (discharged) or not.
An adversary proceeding is separate from the bankruptcy case itself. Normally, you will need to secure legal representation to defend an adversary proceeding separately. This is because even if you have a lawyer representing you in the bankruptcy, the agreement with that bankruptcy lawyer typically does not include representation in an adversary proceeding.
The tough part with section 523(a)(2)(C)(i)(II) is that it provides a presumption that the debt cannot be eliminated, which gives your opponent an advantage. There is a dispute in the law as to the extent of the presumption, but nonetheless, it is an uphill battle for the debtor. In re Ritter, 404 B.R. 811, 822 (Bankr. E.D. Penn. 2009).
“But I didn’t take cash advances, I just used convenience checks provided by my credit card company to draw cash” you might say. “Convenience checks” to draw cash from a credit card account is likely to be considered a cash advance per the bankruptcy code. In re Ritter, 404 B.R. at 827 fn.17.
As stated, this is just one of the many sections of the bankruptcy code (and concerns) that arise when cash advances have occurred prior to contemplating bankruptcy. It pays to consult with an experienced bankruptcy practitioner to review the issues and assess the risk prior to filing.
Cash advances prior to bankruptcy are common, but do raise some concerns that should be addressed by a professional to assess the risk of bad results in a potential bankruptcy prior to filing. If the cash advances were recently taken, or as bankruptcy practitioners may describe as “on the eve of bankruptcy,” there are a number of sections of the bankruptcy code that may apply to the circumstances.
At least one section that may apply and to watch out for is 523(a)(2)(C)(i)(II). It states “cash advances aggregating more than $875.00 . . . on or within 70 days of the [the bankruptcy filing date] are presumed to be nondischargeable . . . .” “What does this mean,” one might ask. Well, as I also state in my last posting, it doesn’t automatically mean the cash advances are not eliminated (nondischargeable). The creditor (or the bankruptcy trustee assigned to your case) needs to take affirmative action. If the creditor (or trustee) does not take appropriate action to begin with, as long as your listed the debt on your petition properly, the debt should be discharged. But a creditor (or trustee) can file an adversary proceeding, which is essentially a law suit related to a bankruptcy case, to determine if the cash advances can be eliminated (discharged) or not.
An adversary proceeding is separate from the bankruptcy case itself. Normally, you will need to secure legal representation to defend an adversary proceeding separately. This is because even if you have a lawyer representing you in the bankruptcy, the agreement with that bankruptcy lawyer typically does not include representation in an adversary proceeding.
The tough part with section 523(a)(2)(C)(i)(II) is that it provides a presumption that the debt cannot be eliminated, which gives your opponent an advantage. There is a dispute in the law as to the extent of the presumption, but nonetheless, it is an uphill battle for the debtor. In re Ritter, 404 B.R. 811, 822 (Bankr. E.D. Penn. 2009).
“But I didn’t take cash advances, I just used convenience checks provided by my credit card company to draw cash” you might say. “Convenience checks” to draw cash from a credit card account is likely to be considered a cash advance per the bankruptcy code. In re Ritter, 404 B.R. at 827 fn.17.
As stated, this is just one of the many sections of the bankruptcy code (and concerns) that arise when cash advances have occurred prior to contemplating bankruptcy. It pays to consult with an experienced bankruptcy practitioner to review the issues and assess the risk prior to filing.
Can I eliminate debt recently incurred from gambling by filing chapter 7 bankruptcy?
29 December 2010
Generally, debt that arises from gambling is not per se treated any differently under the bankruptcy code than any other unsecured debt. But if you have recently incurred gambling debt, it depends. Some initial questions: How recent was the debt incurred? How much is the debt? What were the circumstances? How long had any credit account at issue been open? These questions are likely to be raised, if not by your attorney during your pre-filing consultation(s), then at the meeting of creditors by the trustee that will be assigned to your case. This is in part because there is a question on what is called the “Statement of Financial Affairs,” which is a required part of the bankruptcy paperwork, that specifically probes losses from gambling.
There are a number of sections under the bankruptcy code that may apply to gambling debt and are important to consider. One such section is §523(a)(2)(C)(i)(I) which states in pertinent part “consumer debts owed to a single creditor and aggregating more than $600 for ‘luxury goods or services’ incurred . . . 90 days before [the bankruptcy filing date] are presumed to be nondischargeable . . . .” Debts, such as cash advances, for the purpose of gambling can be found to be “luxury goods or services” because they arguably are not “goods and services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.” If the creditor does not take appropriate action to begin with, as long as your listed the debt on your petition properly, it should be discharged. But a creditor can file an adversary proceeding, which is essentially a law suit related to a bankruptcy case, to determine if the debt at issue (as defined generally above) can be discharged (eliminated) or not. Although related, an adversary proceeding is separate from the bankruptcy case itself. Normally, you will need to secure legal representation to defend an adversary proceeding separately. This is because even if you have a lawyer representing you in the bankruptcy, the agreement with that bankruptcy lawyer typically does not include representation in an adversary proceeding.
If an adversary proceeding is filed, there is still hope. Although you face the presumption the debt cannot be discharged (eliminated) the presumption is rebuttable. There are a number of unresolved legal questions on this subject regarding the extent of the presumption and how it applies. In re Ritter, 404 B.R. 811, 822 (Bankr. E.D. Penn. 2009). Thus, an experienced bankruptcy attorney is needed for this type of litigation. The determination is fact intensive and made case-by-case, so a trial in the bankruptcy court is typically necessary to resolve unless the matter is settled. The trial is likely to focus mainly on what your intent was at the time you obtained the ‘luxury goods or services’ at issue. You can count on a thorough examination of your financial affairs.
As stated, this is just one of the many sections of the bankruptcy code (and concerns) that arise when gambling has occurred prior to contemplating bankruptcy. Don’t go it alone, get counsel on your side.
If you are considering filing bankruptcy and are concerned about recent gambling debt, feel free to give us a call.
Generally, debt that arises from gambling is not per se treated any differently under the bankruptcy code than any other unsecured debt. But if you have recently incurred gambling debt, it depends. Some initial questions: How recent was the debt incurred? How much is the debt? What were the circumstances? How long had any credit account at issue been open? These questions are likely to be raised, if not by your attorney during your pre-filing consultation(s), then at the meeting of creditors by the trustee that will be assigned to your case. This is in part because there is a question on what is called the “Statement of Financial Affairs,” which is a required part of the bankruptcy paperwork, that specifically probes losses from gambling.
There are a number of sections under the bankruptcy code that may apply to gambling debt and are important to consider. One such section is §523(a)(2)(C)(i)(I) which states in pertinent part “consumer debts owed to a single creditor and aggregating more than $600 for ‘luxury goods or services’ incurred . . . 90 days before [the bankruptcy filing date] are presumed to be nondischargeable . . . .” Debts, such as cash advances, for the purpose of gambling can be found to be “luxury goods or services” because they arguably are not “goods and services reasonably necessary for the support or maintenance of the debtor or a dependent of the debtor.” If the creditor does not take appropriate action to begin with, as long as your listed the debt on your petition properly, it should be discharged. But a creditor can file an adversary proceeding, which is essentially a law suit related to a bankruptcy case, to determine if the debt at issue (as defined generally above) can be discharged (eliminated) or not. Although related, an adversary proceeding is separate from the bankruptcy case itself. Normally, you will need to secure legal representation to defend an adversary proceeding separately. This is because even if you have a lawyer representing you in the bankruptcy, the agreement with that bankruptcy lawyer typically does not include representation in an adversary proceeding.
If an adversary proceeding is filed, there is still hope. Although you face the presumption the debt cannot be discharged (eliminated) the presumption is rebuttable. There are a number of unresolved legal questions on this subject regarding the extent of the presumption and how it applies. In re Ritter, 404 B.R. 811, 822 (Bankr. E.D. Penn. 2009). Thus, an experienced bankruptcy attorney is needed for this type of litigation. The determination is fact intensive and made case-by-case, so a trial in the bankruptcy court is typically necessary to resolve unless the matter is settled. The trial is likely to focus mainly on what your intent was at the time you obtained the ‘luxury goods or services’ at issue. You can count on a thorough examination of your financial affairs.
As stated, this is just one of the many sections of the bankruptcy code (and concerns) that arise when gambling has occurred prior to contemplating bankruptcy. Don’t go it alone, get counsel on your side.
If you are considering filing bankruptcy and are concerned about recent gambling debt, feel free to give us a call.
Criminal trespass in Massachusetts exists under more than one Massachusetts statute.
20 December 2010
We have blogged about what would be referred to as the “general” criminal trespass statute, but there is one specifically addressing those “willfully and maliciously” entering a garden or the like, and destroying or stealing. It can be found in section 115 of chapter 266 of the Massachusetts General Laws; the general criminal trespass statute in Massachusetts can be found at section 120 of chapter 266.
The law found in section 115 has distinct differences to the general criminal trespass statute. It has an enhanced penalty compared to the general criminal trespass statute. Instead of a maximum fine of $100 and/or 30 days in jail found in the general criminal trespass statute, this section allows a judge to sentence a convicted defendant up to $500 or six months in jail. Another key difference is that it does not require a notice element like the general statute, which many times takes the form of a letter that can be referred to by police as a “No trespass notice (or letter)” or sometimes by lawyers as a “Letter of Disinvite.” Next are the elements of “willful and malicious.” “Willful and malicious” are terms used in other Massachusetts statutes and have long-established legal definitions that to explain properly would exceed the scope of this blog, but suffice to say, use your common sense. Don’t assume because you think that it is clear that you were acting with a pure heart because you were simply picking some roses for your friend; someone else may not see it that way. The last difference is obvious and is the subject matter. Instead of the (arguably) simple and broad definition for the physical land or space contained in the general criminal trespass statute in Massachusetts, with this statute you must enter an “orchard, nursery, garden, or cranberry meadow.” And mutilate or destroy a “tree, shrub, or vine,” or steal or take and carry away “any fruit or flower.” These terms may not enjoy long-established legal definitions in Massachusetts law, but just the same, it is best not to test their definition in court. But if this blog has not found you before an incident has occurred, you may have to.
If you want to know more about the criminal trespass statutes in Massachusetts or just received a No trespass notice/letter (of Letter of disinvite) or are thinking about sending one, feel free to contact us.
We have blogged about what would be referred to as the “general” criminal trespass statute, but there is one specifically addressing those “willfully and maliciously” entering a garden or the like, and destroying or stealing. It can be found in section 115 of chapter 266 of the Massachusetts General Laws; the general criminal trespass statute in Massachusetts can be found at section 120 of chapter 266.
The law found in section 115 has distinct differences to the general criminal trespass statute. It has an enhanced penalty compared to the general criminal trespass statute. Instead of a maximum fine of $100 and/or 30 days in jail found in the general criminal trespass statute, this section allows a judge to sentence a convicted defendant up to $500 or six months in jail. Another key difference is that it does not require a notice element like the general statute, which many times takes the form of a letter that can be referred to by police as a “No trespass notice (or letter)” or sometimes by lawyers as a “Letter of Disinvite.” Next are the elements of “willful and malicious.” “Willful and malicious” are terms used in other Massachusetts statutes and have long-established legal definitions that to explain properly would exceed the scope of this blog, but suffice to say, use your common sense. Don’t assume because you think that it is clear that you were acting with a pure heart because you were simply picking some roses for your friend; someone else may not see it that way. The last difference is obvious and is the subject matter. Instead of the (arguably) simple and broad definition for the physical land or space contained in the general criminal trespass statute in Massachusetts, with this statute you must enter an “orchard, nursery, garden, or cranberry meadow.” And mutilate or destroy a “tree, shrub, or vine,” or steal or take and carry away “any fruit or flower.” These terms may not enjoy long-established legal definitions in Massachusetts law, but just the same, it is best not to test their definition in court. But if this blog has not found you before an incident has occurred, you may have to.
If you want to know more about the criminal trespass statutes in Massachusetts or just received a No trespass notice/letter (of Letter of disinvite) or are thinking about sending one, feel free to contact us.
I was sued by a bankruptcy trustee for a preference, what is a preference and what should I do?
14 December 2010
It can be quite confusing when receiving a letter from a bankruptcy trustee demanding money from you. This is especially true when you simply received payment for a debt that was owed to you. You may wonder, is something wrong with getting paid for a legitimate debt? Understand that, although usually when someone is demanding you pay them money under the threat of legal action there is some allegation of wrongdoing, in this case there is none. But, you may still have to pay the money back — read on.
A preference under bankruptcy law is a power given to a bankruptcy trustee to “avoid” a transfer of an interest of a debtor that has filed bankruptcy that the debtor has recently given to a creditor. 11 U.S.C. § 547(b). Yes, even regular people and small businesses are creditors if they are owed a debt. A creditor does not need to be a big company.
The general rule is that if a debtor that was insolvent pays a creditor over $600.00 (total of all payments) during the 90 days prior to the bankruptcy filing date for a prior debt that enables the creditor to make more than they would in the bankruptcy (through distributions of the debtor’s property in bankruptcy) then the amount paid by the debtor must be theoretically returned. In this case, returned to the trustee administering the debtor’s bankruptcy case. The bankruptcy trustee then distributes the funds according to a hierarchy of claims. The “look-back” period if you will, is longer (one year) for people who could be deemed an “insider.” Generally, these are people that are close to the debtor.
The idea is that debtors should not be able to “prefer” certain creditors over others by choosing to pay a creditor they prefer on the eve of bankruptcy and enter bankruptcy without those funds that would have been distributed to all the debtor’s creditors. This supports the idea of fair distribution of assets among creditors of the same class and is one of the two main policy goals of the bankruptcy system; the other more well known policy goal being the debtor’s “fresh start.”
What to do? Hire bankruptcy counsel to evaluate the allegation and to inform you how the law applies to your specific facts. (This is not a do-it-yourself task.) Do not bother with your family attorney, this is specialized subject matter and only an attorney well-versed and competent in bankruptcy matters is appropriate. Bankruptcy counsel can evaluate the strength of the allegation and also determine if you have any pertinent defenses. Unfortunately, you are the victim of your good fortune of getting paid; however, even if the payment fits the elements of the allegation, there still may be hope. There are defenses to the allegations that are listed in the code that may apply. In addition, bankruptcy counsel can negotiate with the bankruptcy trustee with more credibility.
If you have received a demand from a trustee or are considering bankruptcy and are concerned your filing may stimulate such demands from others, feel free to contact us.
It can be quite confusing when receiving a letter from a bankruptcy trustee demanding money from you. This is especially true when you simply received payment for a debt that was owed to you. You may wonder, is something wrong with getting paid for a legitimate debt? Understand that, although usually when someone is demanding you pay them money under the threat of legal action there is some allegation of wrongdoing, in this case there is none. But, you may still have to pay the money back — read on.
A preference under bankruptcy law is a power given to a bankruptcy trustee to “avoid” a transfer of an interest of a debtor that has filed bankruptcy that the debtor has recently given to a creditor. 11 U.S.C. § 547(b). Yes, even regular people and small businesses are creditors if they are owed a debt. A creditor does not need to be a big company.
The general rule is that if a debtor that was insolvent pays a creditor over $600.00 (total of all payments) during the 90 days prior to the bankruptcy filing date for a prior debt that enables the creditor to make more than they would in the bankruptcy (through distributions of the debtor’s property in bankruptcy) then the amount paid by the debtor must be theoretically returned. In this case, returned to the trustee administering the debtor’s bankruptcy case. The bankruptcy trustee then distributes the funds according to a hierarchy of claims. The “look-back” period if you will, is longer (one year) for people who could be deemed an “insider.” Generally, these are people that are close to the debtor.
The idea is that debtors should not be able to “prefer” certain creditors over others by choosing to pay a creditor they prefer on the eve of bankruptcy and enter bankruptcy without those funds that would have been distributed to all the debtor’s creditors. This supports the idea of fair distribution of assets among creditors of the same class and is one of the two main policy goals of the bankruptcy system; the other more well known policy goal being the debtor’s “fresh start.”
What to do? Hire bankruptcy counsel to evaluate the allegation and to inform you how the law applies to your specific facts. (This is not a do-it-yourself task.) Do not bother with your family attorney, this is specialized subject matter and only an attorney well-versed and competent in bankruptcy matters is appropriate. Bankruptcy counsel can evaluate the strength of the allegation and also determine if you have any pertinent defenses. Unfortunately, you are the victim of your good fortune of getting paid; however, even if the payment fits the elements of the allegation, there still may be hope. There are defenses to the allegations that are listed in the code that may apply. In addition, bankruptcy counsel can negotiate with the bankruptcy trustee with more credibility.
If you have received a demand from a trustee or are considering bankruptcy and are concerned your filing may stimulate such demands from others, feel free to contact us.
Chapter 7 Bankruptcy & Utility Bills—What Happens?
13 October 2010
Utility bills, in one way, are just like any other unsecured debt—they are discharged in a successful chapter 7 bankruptcy. So, relief from the outstanding amount at the time of filing for bankruptcy can occur. But that is where the similarity to other unsecured debts ends. 11 U.S.C. § 366. Usually, a creditor has the right to stop extending credit to someone who has filed bankruptcy. One significant difference in how utilities are treated is that they have to continue to provide service after the bankruptcy is filed. However there is a catch. Utility companies have the right to demand “adequate protection” within 20 days of the date of the bankruptcy filing. This can take many forms, including: a cash deposit, letter of credit, certificate of deposit, surety bond, prepayment, or what is agreed upon between the parties. The bankruptcy code does not limit the amount the utility can ask for. If a utility does ask for what a debtor believes is too high a deposit, he can request that the court modify the amount required. The bankruptcy court will determine what is reasonable under the circumstances, and ultimately has the final say. In determining “a reasonable modification” to the utilities’ demand, Bankruptcy courts have typically followed what state regulations allow.
The other major difference is that the utility does not need “relief from the automatic stay” (permission from the bankruptcy court) before terminating service after the petition is filed for failure to pay what is due after the bankruptcy. The utility would still have to satisfy state law however, and state law typically provides significant regulation on the subject.
If you are a potential debtor, before becoming concerned that after bankruptcy you will be required to provide a significant deposit to your utilities, the practical world needs to be considered. It is quite rare in this area for a utility to request a deposit. It is quite unlikely to occur in Massachusetts. We surmise that this is because Massachusetts law does not allow a utility company to require a deposit before providing service, or require an advanced deposit to restore service after it was terminated. 220 CMR 25.00 et seq. (Commercial owners and commercial tenants are a different story. 220 CMR 26.00 et seq.) So, in all likelihood, the amount owed prior to filing will be discharged, the utility company will reset the account as if a new account started the day of the bankruptcy filing, and you will simply have to pay for service going forward. Bankruptcy will most likely have little to no effect on how a utility will operate after the bankruptcy is filed. However, if you have any questions on how the law applies to a particular situation, as there can be facts that could complicate the matter, it is wise to seek competent legal advice. Please feel free to give this office a call.
Utility bills, in one way, are just like any other unsecured debt—they are discharged in a successful chapter 7 bankruptcy. So, relief from the outstanding amount at the time of filing for bankruptcy can occur. But that is where the similarity to other unsecured debts ends. 11 U.S.C. § 366. Usually, a creditor has the right to stop extending credit to someone who has filed bankruptcy. One significant difference in how utilities are treated is that they have to continue to provide service after the bankruptcy is filed. However there is a catch. Utility companies have the right to demand “adequate protection” within 20 days of the date of the bankruptcy filing. This can take many forms, including: a cash deposit, letter of credit, certificate of deposit, surety bond, prepayment, or what is agreed upon between the parties. The bankruptcy code does not limit the amount the utility can ask for. If a utility does ask for what a debtor believes is too high a deposit, he can request that the court modify the amount required. The bankruptcy court will determine what is reasonable under the circumstances, and ultimately has the final say. In determining “a reasonable modification” to the utilities’ demand, Bankruptcy courts have typically followed what state regulations allow.
The other major difference is that the utility does not need “relief from the automatic stay” (permission from the bankruptcy court) before terminating service after the petition is filed for failure to pay what is due after the bankruptcy. The utility would still have to satisfy state law however, and state law typically provides significant regulation on the subject.
If you are a potential debtor, before becoming concerned that after bankruptcy you will be required to provide a significant deposit to your utilities, the practical world needs to be considered. It is quite rare in this area for a utility to request a deposit. It is quite unlikely to occur in Massachusetts. We surmise that this is because Massachusetts law does not allow a utility company to require a deposit before providing service, or require an advanced deposit to restore service after it was terminated. 220 CMR 25.00 et seq. (Commercial owners and commercial tenants are a different story. 220 CMR 26.00 et seq.) So, in all likelihood, the amount owed prior to filing will be discharged, the utility company will reset the account as if a new account started the day of the bankruptcy filing, and you will simply have to pay for service going forward. Bankruptcy will most likely have little to no effect on how a utility will operate after the bankruptcy is filed. However, if you have any questions on how the law applies to a particular situation, as there can be facts that could complicate the matter, it is wise to seek competent legal advice. Please feel free to give this office a call.
Someone stole my identity . . . what do I do?
30 August 2010
There are many different types of identity theft. Identity theft can be an unauthorized use of an existing account, or alternatively it can be the creation and subsequent use of a new account or accounts. The first step in most circumstances remains the same—it is best to place a temporary fraud alert on your credit reports. But there is an important pause to take next.
Sometimes, the nature of the theft could indicate that it is someone you know who has stolen your identity. If this may be the case, you need to think real hard about whether this is true before doing anything else. Many times it is not just someone you know, but a family member or friend. These are the people that are close to you and usually have easy access to your personal information; even more helpful to the thief, they are close enough to “watch” you, in a sense, and are able to keep you in the dark while the damage is being done. These people can feel comfortable impersonating you, because they are able to provide extra information about you if questioned. It could almost feel to them like they are telling the truth.
So, the second step is to think of the people who had access to your personal information, and take steps to learn whether any of them are the thief. If you are resourceful, you may be able to find out without them knowing that you suspect them. You may have to tip them off and tell them your identity has been stolen and ask them if they know anything about it, or more boldly ask them if they did it. You are in the best position to know how to approach this.
If you discover it is a family member or friend, we suggest that you next get counsel from an attorney with experience in remedying identity theft. Learning the law and how society treats the issue will help you understand the ramifications of the decision of whether to turn them in. In our experience, victims are so mad they would turn their own mother in (and sometimes do). But, there are others who are reluctant to take such action. Some so much so that they pay substantial debt that is not even theirs just to make it all go away. But by obtaining counsel you will be in the best position to learn the way the law and our society treats identity theft before taking either of these actions.
Most people want the false information removed from their credit report. Most also do not want to pay the debt that arose from the theft. As the law is a bit tricky in this area, we suggest that you talk to one of the very, very few attorneys that actually know something about how to remedy identity theft before taking action, and quickly. Our office may be able to help, give us a call.
If you believe that the thief is not someone you know, then you will need to decide whether the problem is minor enough that you can remedy it in a few hours by simply using your common sense, or a serious enough problem that may merit some professional help. If you believe it is the later, give us a call.
There are many different types of identity theft. Identity theft can be an unauthorized use of an existing account, or alternatively it can be the creation and subsequent use of a new account or accounts. The first step in most circumstances remains the same—it is best to place a temporary fraud alert on your credit reports. But there is an important pause to take next.
Sometimes, the nature of the theft could indicate that it is someone you know who has stolen your identity. If this may be the case, you need to think real hard about whether this is true before doing anything else. Many times it is not just someone you know, but a family member or friend. These are the people that are close to you and usually have easy access to your personal information; even more helpful to the thief, they are close enough to “watch” you, in a sense, and are able to keep you in the dark while the damage is being done. These people can feel comfortable impersonating you, because they are able to provide extra information about you if questioned. It could almost feel to them like they are telling the truth.
So, the second step is to think of the people who had access to your personal information, and take steps to learn whether any of them are the thief. If you are resourceful, you may be able to find out without them knowing that you suspect them. You may have to tip them off and tell them your identity has been stolen and ask them if they know anything about it, or more boldly ask them if they did it. You are in the best position to know how to approach this.
If you discover it is a family member or friend, we suggest that you next get counsel from an attorney with experience in remedying identity theft. Learning the law and how society treats the issue will help you understand the ramifications of the decision of whether to turn them in. In our experience, victims are so mad they would turn their own mother in (and sometimes do). But, there are others who are reluctant to take such action. Some so much so that they pay substantial debt that is not even theirs just to make it all go away. But by obtaining counsel you will be in the best position to learn the way the law and our society treats identity theft before taking either of these actions.
Most people want the false information removed from their credit report. Most also do not want to pay the debt that arose from the theft. As the law is a bit tricky in this area, we suggest that you talk to one of the very, very few attorneys that actually know something about how to remedy identity theft before taking action, and quickly. Our office may be able to help, give us a call.
If you believe that the thief is not someone you know, then you will need to decide whether the problem is minor enough that you can remedy it in a few hours by simply using your common sense, or a serious enough problem that may merit some professional help. If you believe it is the later, give us a call.
Tuesday, January 25, 2011
Reaffirming debts in bankruptcy.
23 August 2010
Bankruptcy (generally) allows a debtor to eliminate his personal responsibility for a debt. This is why most people file for bankruptcy. Reaffirming a debt is making a new agreement to pay the debt in spite of the bankruptcy. It is giving up the right a debtor has to eliminate the personal liability with respect to the debt.
Why would someone reaffirm a debt?
Good question. Well, it is usually done, sometimes mistakenly, in order to retain the property that the debt is secured by. (I say mistakenly because usually, or almost always, the debtor would be able to keep the property anyway—more on that in future posts.) Contrary to what you may think, typically a debtor is the one who wants to reaffirm, and their lawyer is advising them not to. The debtor is usually not as objective, and has some personal or emotional desire to retain the property (house, car, etc.) that is not held by the lawyer.
Why not just let the debtor do what they want?
The societal benefit to bankruptcy is to allow a debtor a “fresh start” by freeing them of their debts to become a more profitable, more beneficial economic unit. It also relieves much of the debtor’s stress that comes from a heavy debt load. Reaffirmation cuts against the purpose or benefit to society, and is why the decision to reaffirm is, in a sense, regulated, if you will. 11 U.S.C. § 524(c).
If a party is without counsel, they must attend a hearing and have the court approve the proposed agreement. If a party is with counsel, the attorney is asked to declare that the agreement:
1) Represents a fully informed and voluntary agreement by the debtor;
2) Does not impose an undue hardship . . .
3) He fully advised the debtor of the legal effect and consequences of –
A) [the agreement]
B) Any default under [the] agreement.
Sometimes an attorney refuses to make the certification. Sometimes a presumption arises that the debtor cannot afford to pay the debt when he completes the forms. In these cases, then there will likely be a court hearing, even if a party is represented by counsel. And the court could have a hearing on the matter even without these circumstances.
With or without counsel, there are certain forms that must be used and there are disclosures the debtor must have received. In Massachusetts, there are local procedural rules that apply too. MLBR 4008-1.
Bankruptcy (generally) allows a debtor to eliminate his personal responsibility for a debt. This is why most people file for bankruptcy. Reaffirming a debt is making a new agreement to pay the debt in spite of the bankruptcy. It is giving up the right a debtor has to eliminate the personal liability with respect to the debt.
Why would someone reaffirm a debt?
Good question. Well, it is usually done, sometimes mistakenly, in order to retain the property that the debt is secured by. (I say mistakenly because usually, or almost always, the debtor would be able to keep the property anyway—more on that in future posts.) Contrary to what you may think, typically a debtor is the one who wants to reaffirm, and their lawyer is advising them not to. The debtor is usually not as objective, and has some personal or emotional desire to retain the property (house, car, etc.) that is not held by the lawyer.
Why not just let the debtor do what they want?
The societal benefit to bankruptcy is to allow a debtor a “fresh start” by freeing them of their debts to become a more profitable, more beneficial economic unit. It also relieves much of the debtor’s stress that comes from a heavy debt load. Reaffirmation cuts against the purpose or benefit to society, and is why the decision to reaffirm is, in a sense, regulated, if you will. 11 U.S.C. § 524(c).
If a party is without counsel, they must attend a hearing and have the court approve the proposed agreement. If a party is with counsel, the attorney is asked to declare that the agreement:
1) Represents a fully informed and voluntary agreement by the debtor;
2) Does not impose an undue hardship . . .
3) He fully advised the debtor of the legal effect and consequences of –
A) [the agreement]
B) Any default under [the] agreement.
Sometimes an attorney refuses to make the certification. Sometimes a presumption arises that the debtor cannot afford to pay the debt when he completes the forms. In these cases, then there will likely be a court hearing, even if a party is represented by counsel. And the court could have a hearing on the matter even without these circumstances.
With or without counsel, there are certain forms that must be used and there are disclosures the debtor must have received. In Massachusetts, there are local procedural rules that apply too. MLBR 4008-1.
Want to hire a cheap lawyer, watch out!
23 August 2010
Frequently my office receives calls from people saying they are contacting all the bankruptcy lawyers listed in the phone book and inquiring:
“How much do you charge for a bankruptcy?”
The caller fails to realize that there are different chapters to file under, which are very different, including different amounts of time and cost involved. In my opinion, advising what chapter to chose is very important. See e.g. In re Buck, 2010 WL 274621(Bankr. D. Mass. July 9, 2010) (Bankruptcy judge discusses chapter selection and related issues). What the caller also fails to realize is that bankruptcies are all different, and can be quite complicated. A caller may think their case is “simple” and providing a quote should be easy. But a proper analysis for possible bankruptcy issues needs to be done before one could say that with confidence.
So, I cannot provide a quote until an initial analysis is invoked. What I fear is that these people who are shopping for an attorney, apparently based on price, end up hiring the lawyer that quotes the cheapest price. (My office prices cases on the low side when comparing apples to apples, but we are unlikely to be the cheapest among many quotes.) What they don’t know is that it is likely the cheapest lawyer will in all likelihood not include certain services that the client may need to maximize the benefit of their potential bankruptcy. For example, in a chapter 13 plan, or if there are assets to distribute in a chapter 7, there can be a real benefit for the debtor to file a claim in his own case on behalf of a creditor when the creditor fails to do so itself. Why would a debtor want to do this?
Some debts remain after bankruptcy, either because they are not dischargeable, or for other reasons. Making sure these debts are paid, in any amount, even a small amount, will benefit the debtor going forward. It would surprise you just how often creditors don’t make claims, and this added service is necessary to ensure the debtor gets the most from his bankruptcy. Some creditors simply don’t pay enough attention. See e.g. United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367, 1374 (2010) (creditor failing to object in timely manner to chapter 13 plan results in discharge of interest on the debt). So, it pays to ensure that claims are filed for certain debts in these situations.
The bargain priced lawyer is unlikely to catch this issue, let alone even be thinking about it; (it will not make the checklist). It is a service that is not required. It is just one of the many issues that are likely to not be addressed in a bankruptcy if a potential debtor chooses a lawyer based primarily on price. The sad truth is, in all likelihood, the debtor who chooses the cheapest priced lawyer, will never know they did not maximize the benefit of their bankruptcy when certain tasks are not performed.
Frequently my office receives calls from people saying they are contacting all the bankruptcy lawyers listed in the phone book and inquiring:
“How much do you charge for a bankruptcy?”
The caller fails to realize that there are different chapters to file under, which are very different, including different amounts of time and cost involved. In my opinion, advising what chapter to chose is very important. See e.g. In re Buck, 2010 WL 274621(Bankr. D. Mass. July 9, 2010) (Bankruptcy judge discusses chapter selection and related issues). What the caller also fails to realize is that bankruptcies are all different, and can be quite complicated. A caller may think their case is “simple” and providing a quote should be easy. But a proper analysis for possible bankruptcy issues needs to be done before one could say that with confidence.
So, I cannot provide a quote until an initial analysis is invoked. What I fear is that these people who are shopping for an attorney, apparently based on price, end up hiring the lawyer that quotes the cheapest price. (My office prices cases on the low side when comparing apples to apples, but we are unlikely to be the cheapest among many quotes.) What they don’t know is that it is likely the cheapest lawyer will in all likelihood not include certain services that the client may need to maximize the benefit of their potential bankruptcy. For example, in a chapter 13 plan, or if there are assets to distribute in a chapter 7, there can be a real benefit for the debtor to file a claim in his own case on behalf of a creditor when the creditor fails to do so itself. Why would a debtor want to do this?
Some debts remain after bankruptcy, either because they are not dischargeable, or for other reasons. Making sure these debts are paid, in any amount, even a small amount, will benefit the debtor going forward. It would surprise you just how often creditors don’t make claims, and this added service is necessary to ensure the debtor gets the most from his bankruptcy. Some creditors simply don’t pay enough attention. See e.g. United Student Aid Funds, Inc. v. Espinosa, 130 S. Ct. 1367, 1374 (2010) (creditor failing to object in timely manner to chapter 13 plan results in discharge of interest on the debt). So, it pays to ensure that claims are filed for certain debts in these situations.
The bargain priced lawyer is unlikely to catch this issue, let alone even be thinking about it; (it will not make the checklist). It is a service that is not required. It is just one of the many issues that are likely to not be addressed in a bankruptcy if a potential debtor chooses a lawyer based primarily on price. The sad truth is, in all likelihood, the debtor who chooses the cheapest priced lawyer, will never know they did not maximize the benefit of their bankruptcy when certain tasks are not performed.
What happens if I don’t pay my condo fees in Massachusetts?
30 June 2010
There is a reason why condo associations are aggressive in the collection of condo fees. Let me introduce you to the Massachusetts condominium “super-lien” provided by Massachusetts General Law chapter 183A. The super-lien allows condo associations priority over your lender in the distribution hierarchy in the event of foreclosure. This means that if the unit is eventually foreclosed on, the condo association would get paid before your mortgage. However, there is a limitation on what can acquire super-lien status, and there are also some important requirements.
A super-lien is limited to common expense assessments based on the condo association budget during the six months immediately preceding institution of an action to enforce the lien (including collection costs). What this means is that the amount that enjoys super-lien status is limited to what is due in the for condo fees in the six months prior to the date the suit is filed. This implicitly means the association must file suit to attain super-lien status. (Yes, the state is encouraging litigation here isn’t it.) One practical fact that enters into play here is that it takes about four months or so for the condo association to fulfill all the state and federal collection laws required before suit can properly be commenced (notices, dispute period, etc.) before. So, it behooves the condo association to start collection efforts early for these reasons.
What if the condominium association doesn’t sue? Assuming one stops paying condo fees on a certain date, if the condo association does not bring suit until, for example, nine months have passed, it would lose out on having past due months seven through nine attain super-lien status. What does it matter? If there is a foreclosure sale, the condo fees that do not enjoy super-lien status would get paid after the first mortgage was paid; as opposed to the fees that enjoy super-lien status that would be paid before the first mortgage was paid. For the condo association, this can mean the difference between getting paid what’s due or not getting paid at all.
What about the time period after the suit is filed? This time period is not included and does not attain super-lien status by the original suit. But before you celebrate, know this— there is nothing stopping the condo association from suing you again in a separate suit for the past due condo association fees that were due after the first suit was commenced. So, if you have heard of stories about condo associations repeatedly suing condo owners for fees, now you may know the reason why.
Some other questions and answers are: Can they sue me in my personal capacity? Yes. Can they attach the rental payments from a tenant? Yes. How do they apply late payments? They apply to the amount most past due, unless you specify differently on the check. Can I withhold payment based on an unrelated dispute or get a set off for what is owed by a successful countersuit? Generally, no.
As you can see, the condominium association has an incentive to collect early and often. If you are having difficulty making your condo association dues or are in a conflict with your condo association, please feel free to give this office a call.
There is a reason why condo associations are aggressive in the collection of condo fees. Let me introduce you to the Massachusetts condominium “super-lien” provided by Massachusetts General Law chapter 183A. The super-lien allows condo associations priority over your lender in the distribution hierarchy in the event of foreclosure. This means that if the unit is eventually foreclosed on, the condo association would get paid before your mortgage. However, there is a limitation on what can acquire super-lien status, and there are also some important requirements.
A super-lien is limited to common expense assessments based on the condo association budget during the six months immediately preceding institution of an action to enforce the lien (including collection costs). What this means is that the amount that enjoys super-lien status is limited to what is due in the for condo fees in the six months prior to the date the suit is filed. This implicitly means the association must file suit to attain super-lien status. (Yes, the state is encouraging litigation here isn’t it.) One practical fact that enters into play here is that it takes about four months or so for the condo association to fulfill all the state and federal collection laws required before suit can properly be commenced (notices, dispute period, etc.) before. So, it behooves the condo association to start collection efforts early for these reasons.
What if the condominium association doesn’t sue? Assuming one stops paying condo fees on a certain date, if the condo association does not bring suit until, for example, nine months have passed, it would lose out on having past due months seven through nine attain super-lien status. What does it matter? If there is a foreclosure sale, the condo fees that do not enjoy super-lien status would get paid after the first mortgage was paid; as opposed to the fees that enjoy super-lien status that would be paid before the first mortgage was paid. For the condo association, this can mean the difference between getting paid what’s due or not getting paid at all.
What about the time period after the suit is filed? This time period is not included and does not attain super-lien status by the original suit. But before you celebrate, know this— there is nothing stopping the condo association from suing you again in a separate suit for the past due condo association fees that were due after the first suit was commenced. So, if you have heard of stories about condo associations repeatedly suing condo owners for fees, now you may know the reason why.
Some other questions and answers are: Can they sue me in my personal capacity? Yes. Can they attach the rental payments from a tenant? Yes. How do they apply late payments? They apply to the amount most past due, unless you specify differently on the check. Can I withhold payment based on an unrelated dispute or get a set off for what is owed by a successful countersuit? Generally, no.
As you can see, the condominium association has an incentive to collect early and often. If you are having difficulty making your condo association dues or are in a conflict with your condo association, please feel free to give this office a call.
Can I eliminate my tax debt in bankruptcy?
30 June 2010
Maybe. First, the good news; although difficult, eliminating tax debt in bankruptcy is possible and very beneficial. Tax debt grows quickly and can hang over you for what seems like an eternity. The government also enjoys collection powers that other creditors do not. So, obtaining a discharge from tax debt can give you a whole new financial life and is worth investigating. How can it be done?
Initially, there are a few requirements that should not cause surprise; you must file your tax return and you must not have illegally or fraudulently attempted to evade or defeat paying the taxes stemming from that tax year. Given those basic requirements, there are three main tests that apply: the 3 year rule, the 2 year rule, and the 240 day rule. First, a minimum of three years must have passed from the date a return is due before the taxes due according to that return could be dischargeable. Second, if the return is filed late, a minimum of two years must have passed from the time the return was filed to when the bankruptcy petition was filed. Lastly, at least 240 days must have passed from the date the tax was “assessed” before you file your petition.
It sounds easy, but determining these basic dates is not as simple as it may seem. Also, there are facts that may exist that could “toll” the time periods associated with these rules, such as a prior pending bankruptcy, or possibly a pending offer-to- compromise. Amended returns will also affect the analysis.
Taking a chance and filing bankruptcy in order to discharge taxes when you are unsure if you will be successful is unwise. Moreover, in order to be successful, it takes an affirmative act on your part after you file (not discussed in this blog) to make sure the taxes are deemed discharged. So, you can’t just file the petition and sit back and watch your taxes get eliminated, even if they otherwise could be. So, if you’re contemplating filing bankruptcy to eliminate your tax debt, it pays to have an expert analyze if your taxes could be eliminated in the first place, and then make it happen. (As stated, there are more issues than appear in this blog with respect to this issue.)
If you have tax debt that is hampering your financial life and have an interest in addressing the situation, feel free to give us a call.
Maybe. First, the good news; although difficult, eliminating tax debt in bankruptcy is possible and very beneficial. Tax debt grows quickly and can hang over you for what seems like an eternity. The government also enjoys collection powers that other creditors do not. So, obtaining a discharge from tax debt can give you a whole new financial life and is worth investigating. How can it be done?
Initially, there are a few requirements that should not cause surprise; you must file your tax return and you must not have illegally or fraudulently attempted to evade or defeat paying the taxes stemming from that tax year. Given those basic requirements, there are three main tests that apply: the 3 year rule, the 2 year rule, and the 240 day rule. First, a minimum of three years must have passed from the date a return is due before the taxes due according to that return could be dischargeable. Second, if the return is filed late, a minimum of two years must have passed from the time the return was filed to when the bankruptcy petition was filed. Lastly, at least 240 days must have passed from the date the tax was “assessed” before you file your petition.
It sounds easy, but determining these basic dates is not as simple as it may seem. Also, there are facts that may exist that could “toll” the time periods associated with these rules, such as a prior pending bankruptcy, or possibly a pending offer-to- compromise. Amended returns will also affect the analysis.
Taking a chance and filing bankruptcy in order to discharge taxes when you are unsure if you will be successful is unwise. Moreover, in order to be successful, it takes an affirmative act on your part after you file (not discussed in this blog) to make sure the taxes are deemed discharged. So, you can’t just file the petition and sit back and watch your taxes get eliminated, even if they otherwise could be. So, if you’re contemplating filing bankruptcy to eliminate your tax debt, it pays to have an expert analyze if your taxes could be eliminated in the first place, and then make it happen. (As stated, there are more issues than appear in this blog with respect to this issue.)
If you have tax debt that is hampering your financial life and have an interest in addressing the situation, feel free to give us a call.
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