How will a creditor collect from me if I lost my case in Massachusetts?

2 December 2014

After a judgment is entered, the next document to issue is called an execution.  The execution is what empowers the sheriff’s office, as it is directed by the creditor, to collect from you.  Depending on the circumstances and the court the case is in, an execution is to be issued by the clerk’s office either 10 or 30 days after judgment.  However, speaking from experience, some clerk’s offices may not be up to date and it could take much longer for it to actually issue the execution to the creditor.

With an execution, a creditor has many avenues from which to collect.  Such as levy on personal property, levy on real estate, wage attachment, keeper attachment, receivership, and what is known as supplementary process.  With respect to wage attachment, keeper attachment, and receivership, they require a separate suit after judgment has issued.  If the case was originally in small claims, a “payment review” hearing may occur prior to the creditor obtaining an execution. 

 

One popular way in which a creditor collects is by levy (and suspend) on real estate.  What happens is that the creditor instructs the sheriff to levy and suspend further action on your real estate, usually your residence.  The execution is recorded at the registry of deeds and acts essentially as an attachment of your house.  The good news is that there is nothing forcing you to pay immediately, the bad news is that you cannot transfer title to the house without satisfying the execution and it accrues interest.

The most popular avenue that creditors use is supplementary process.  It is formally a separate action ($40 filing fee) but only requires a simple form to be completed.  It is either handled by the small claims division or the district court division of the court.  You will get served by a sheriff with a summons under this new supplementary process case to appear at court.  If you do not appear, the creditor can request, and most likely will obtain, a capias warrant for your arrest.  Then the creditor has two options, either have the sheriff physically arrest you, or get the debtor to promise to appear at another court date, and it is usually the latter. 

If you do appear at the supplementary process hearing, you will have to answer as to your ability to pay.  The clerk or judge, sometimes with the creditor’s assistance, evaluate whether you have non-exempt assets or non-exempt income to pay the judgment.  Most debtors avoid this evaluation though as they make an agreement with the creditor at that hearing but prior to that evaluation to pay a certain amount a month.  That agreement actually is a court order for you to pay, and if you do not, you could be found in contempt.  As an aside, if you find yourself unable to pay, be proactive and contact an attorney before they find you in contempt. 

If the clerk or judge does find that you do not have any non-exempt assets from which to collect, the case may be dismissed or scheduled for payment review within a certain period of time such as 6 months or a year.  When someone is found to not have assets or income available to pay, that is what is referred to as “judgment proof.” 

Generally, the supplementary process session is not a happy place to be and for the most part, it is the end of the line.  The most important mistake people make is arguing the merits of the original case, which is common and will likely be quickly rebuked as it is not the place or the time to do so. 

It is also a place that you are playing with fire if you decide to not make a deal with the creditor and most people are on unfamiliar turf.  So, it is best to have an attorney by your side if you are entering the lion’s den.

Internet defamation lawyers in Massachusetts, what do they do?

4 November 2014

Initially, we will explore what Internet defamation is before discussing what Internet defamation lawyers in Massachusetts actually do.  And we will have to back up even one more step and address what defamation is because that itself is not understood by all.  Defamation is a collective term for both slander, which is the publishing of a falsehood to a third party that is damaging to someone without a privilege; and libel, which is the same, except it is done in writing.  As stated, defamation can mean either one.  Now, let us move to Internet defamation.

It appears that there is no agreed upon definition and it seems that the term has various meanings based on its use.  Although there appears to be a more specific definition emerging, it can be said that Internet defamation is as simple as someone defaming you on the Internet.  With that in mind, it is quite unlikely that someone slanders someone using the Internet (as that is using the spoken word).  I imagine that one could use the term Internet defamation if someone slandered someone by video conferencing, or the like, using the Internet.  But that is not happening.  Other than that possible, possibly technically correct case, communication using the Internet in general is typically done electronically.  Thus it is considered to be in writing.  So, it may be argued that simply calling it libel or libel by Internet, would be more accurate.

 

Libeling someone using email, although arguably done using the Internet, is typically not what people refer to as Internet defamation.  In that case, people would likely call it defamation, or more accurately, libel.

The term Internet defamation is usually used when someone posts a defamatory review on one of the plethora of websites that allow for people, presumably prior customers of the business, to post reviews.  With the use of search engines to “google” someone, a libelous statement can appear as the only item for some people, or at least near the top of the searches.  Obviously, this can be damaging and raises much concern on the part of the victim.  This has caused many companies and “experts” that work to mitigate the damage by using various techniques to have the libelous statement be buried or obscured by other, positive statements appearing higher in the search list or in addition to the libelous statement.

Another use of the term Internet defamation is for a libel that appears somewhere on the Internet where the publisher is unknown.  It is interesting to note, there have always been people slandering or libeling others and attempting to hide their identity, and there was not a special definition used to describe it.  Nothing like “slander/libel by unknown person” has arisen.  But increasingly the author comes across the use of Internet defamation for a case where the defamer is unknown.  This unknown part of the scenario may someday become part of the official definition for Internet defamation, or it could be stated “often associated with an unknown publisher” in dictionaries in the future.

So what do Internet defamation lawyers do?  Well, they become adept at solving or addressing the unique issues that arise from the two different scenarios described above (false reviews and unknown publishers) and sometimes both at the same time.  They employ some legal and non-legal techniques to identify the publisher.  They also sometimes work with other professionals to bury or obscure any negative search engine results.  They also may employ techniques to persuade website operators to remove defamatory postings.  They also may attempt to push the boundaries of the equitable side of the law to provide relief for their clients.  Finally, they do what lawyers have done for decades, obtain judgments against defamers.

In the event that you are facing “Internet defamation” in Massachusetts, feel free to give us a call.

Can I eliminate my tax debt in bankruptcy?

1 Nov 2014

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.  Generally, there is no going back after filing.  For these reasons, 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 discharging taxes in bankruptcy.)

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.

What is a fraudulent transfer in Massachusetts?

18 October 2014

A creditor files suit against you for a debt owed.  It eventually obtains a judgment and then an execution.  You learn that the creditor is seeking to give the sheriff the execution to have him levy against your vacation home and force its sale to satisfy the judgment.  Just before the sale takes place, you sell (transfer) the vacation home to your son for $1.00 to make sure that the creditor cannot take it from you to satisfy the debt.   What you just did is called a “fraudulent transfer” and would most likely be found to fit the definition under Massachusetts law for one type of fraudulent transfer.  The applicable statute reads:

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transferor incurred the obligation:

          (1) with actual intent to hinder, delay, or defraud
          any creditor of the debtor.

. . . .

Mass. Gen. Laws. c. 109A § 5(a).

So what if it is a fraudulent transfer, what does that mean to me, you might ask.  Well the creditor can sue you and your son.  If it is found to be a fraudulent transfer by the court, the sale can be “avoided” or set aside.  That means the court orders that the sale be undone and the property is back in your ownership.  It can place an attachment on the vacation home.  It can enjoin both you and your son from further transfer of the property.  It also may be able to order you to pay punitive damages and possibly attorneys’ fees and costs.  The applicable statute reads:

 . . . .

(1) avoidance of the transfer or obligation to the extent necessary to satisfy the creditor’s claim;

(2) an attachment or other provisional remedy against the asset transferred or other property of the transferee in accordance with the applicable procedure set forth in chapter two hundred and fourteen for actions to reach and apply chapter two hundred and twenty-three for attachments, and chapter two hundred and forty-six for trustee process and in accordance with applicable rules of civil procedure;

(3) subject to applicable principles of equity and in accordance with applicable rules of civil procedure,

(i) an injunction against further disposition by the debtor or a transferee, or both, of the asset transferred or of other property;

(ii) appointment of a receiver to take charge of the asset transferred or of other property of the transferee; or

(iii) any other relief the circumstances may require.

           (b) If a creditor has obtained a judgment on a
           claim against the debtor, the creditor, if the
           court so orders, may levy execution on the
           asset transferred or its proceeds.

Mass. Gen. Laws. c. 109A § 8.

Fraudulent transfers typically surprise people because they do not know this kind of law exists and have not seen anything like it before.  What also tends to surprise and disturb people is that the transferee, the son in our example, can be sued by the creditor.  Typically this evokes a very bad reaction from the son, the person you thought you were helping, being something like “thanks but no thanks, I do not want to be involved.”

A real detriment to the accusation of conducting a fraudulent transfer is the possibility of punitive damages and attorneys’ fees and costs.  The legal question is what “any other relief the circumstances may require” should be interpreted to mean.  Id.  This varies from state to state with the majority of states finding that they can be awarded.  See e.g. Renbolt v. Kern, 2013 Ohio 1359, 2013 WL 1390607 (April 5, 2013).  So usually the threat is there.

In any event, there is a lot at stake with a fraudulent transfer situation.  In the event that you find yourself involved in a fraudulent transfer situation in Massachusetts, feel free to contact this office.