1 June 2012
It depends. There are many factors to address and a thorough evaluation by a quality bankruptcy attorney is necessary. However, one recent opinion issued by a Massachusetts bankruptcy judge is worth taking a look at.
In In re Lawrence the Debtors had two residences, one in Massachusetts and one in Maine. In re Lawrence, 2012 Bankr. LEXIS 1934 at *1, Case No. 11-42045, decided May 2, 2012). Days before their bankruptcy filing, the Debtors claimed that they changed their primary residence from Massachusetts to Maine, and they claimed an exemption in their equity in their Maine house. The bankruptcy trustee objected, and then the Debtors were permitted to change which exemption in the Maine property they wanted to apply. The trustee continued to object. Based on the decision the parties seemed to believe the matter would turn on which residence was the Debtors’ primary residence. It further appears that the parties believed facts that would show which residence was the Debtors’ primary residence would be at issue to decide the matter. The Debtors were prepared to argue that their former vacation home was now really their primary residence, and the trustee was prepared to argue that the Maine property remained just a vacation home.
However, citing many code provisions and bankruptcy decisions, Massachusetts bankruptcy Judge Hoffman found that which residence was “primary” was not the right legal question. Instead he found that the exemption in question would apply to any residence of the Debtors, whether it was their primary residence or not. He stated the Debtors “were entitled to exempt either [residence], but only one [residence].” In re Lawrence, 2012 Bankr. LEXIS 1934 at *7. Thus, the bankruptcy trustee’s objection was overruled and the Debtors were allowed to apply the exemption.
Although this decision appears to be a happy ending for the Debtors, please do not make assumptions that you can keep your second home if you file bankruptcy based on this (one) case. For example, the exemption the Debtors ultimately used in In re Lawrence was not the only one available, which means you may want to use a different one for your situation. (In fact, the Debtors changed their exemption while the case was open.) Also, the exemption used was limited in amount ($21,625 in equity). And, we do not know just what the Debtors gave up with respect to their Massachusetts property (for the benefit of their Maine property). Finally, we do not know exactly how great the practical reality was for the Debtors. It could be that filing bankruptcy (or some other prior decision) was the wrong move and they were scrambling to make the best of a bad decision.
In the event that you are having financial problems and want to know what your creditors can and cannot take from you, or you are contemplating a bankruptcy filing and want to learn more about the possible ramifications, I invite you to give us a call.
Friday, June 1, 2012
Thursday, May 31, 2012
Deciding to represent yourself (pro se) in litigation or bankruptcy is risky business.
31 May 2012
At times people consider representing themselves in a legal matter for various reasons. It could be the price of competent counsel, not knowing an attorney that you trust, or a belief that you can handle the matter on your own, or all or some combination of these or other factors. This blog is written to allow you to consider one item using a somewhat recent political event as an example before making that risky decision.
Do you remember the Monica Lewinsky scandal? Do you remember the suit Paula Jones filed against then President Clinton prior to that? Who could forget these events; they were the significant basis of the investigation of former President Clinton, which lead to President Clinton’s “impeachment.” Do you remember thinking impeachment meant the actual removal of the President from office? Do you remember somewhere along the way in the saga being surprised to learn that impeachment meant something different than you thought. This is because you and most of the rest of the country thought they knew the meaning of impeachment. In fact, it was not even a word they had any question about. They thought they knew the meaning, but we were wrong.
It was learned that impeachment simply meant that a charge (in Clinton’s case, two) is brought against the President by a vote of the House of Representatives, which would cause a trial of sorts to be held in the Senate and presided over by the Chief Justice of the Supreme Court to determine/decide on removal. We all know the rest of the story; President Clinton was “impeached” but not removed from office.
The point here is that there will be a word, or likely many words, which you will think you know the meaning of when approaching a legal matter, but you will be mistaken as to the correct meaning. Instead of learning the correct meaning of a legal word in the safety of your home or office with nothing at stake (like when you learned the correct meaning of “impeachment”) this time, when you are representing yourself in a legal matter, being incorrect will likely have consequences. It may be that you misread a notice from the court or a pleading filed by the opposition. It may be that the realization that you were wrong about the meaning of a word or phrase occurs in open court which throws you off your plan and ruins any chance you had at making a good presentation. It may be that you repeatedly display your ignorance with the whole court room aware that you do not know the meaning of a word or phrase except you, and you leave not knowing why you lost.
We suggest that you consider how much you have at stake and whether you want to risk the case that could be lost on one shibboleth. (smile)
At times people consider representing themselves in a legal matter for various reasons. It could be the price of competent counsel, not knowing an attorney that you trust, or a belief that you can handle the matter on your own, or all or some combination of these or other factors. This blog is written to allow you to consider one item using a somewhat recent political event as an example before making that risky decision.
Do you remember the Monica Lewinsky scandal? Do you remember the suit Paula Jones filed against then President Clinton prior to that? Who could forget these events; they were the significant basis of the investigation of former President Clinton, which lead to President Clinton’s “impeachment.” Do you remember thinking impeachment meant the actual removal of the President from office? Do you remember somewhere along the way in the saga being surprised to learn that impeachment meant something different than you thought. This is because you and most of the rest of the country thought they knew the meaning of impeachment. In fact, it was not even a word they had any question about. They thought they knew the meaning, but we were wrong.
It was learned that impeachment simply meant that a charge (in Clinton’s case, two) is brought against the President by a vote of the House of Representatives, which would cause a trial of sorts to be held in the Senate and presided over by the Chief Justice of the Supreme Court to determine/decide on removal. We all know the rest of the story; President Clinton was “impeached” but not removed from office.
The point here is that there will be a word, or likely many words, which you will think you know the meaning of when approaching a legal matter, but you will be mistaken as to the correct meaning. Instead of learning the correct meaning of a legal word in the safety of your home or office with nothing at stake (like when you learned the correct meaning of “impeachment”) this time, when you are representing yourself in a legal matter, being incorrect will likely have consequences. It may be that you misread a notice from the court or a pleading filed by the opposition. It may be that the realization that you were wrong about the meaning of a word or phrase occurs in open court which throws you off your plan and ruins any chance you had at making a good presentation. It may be that you repeatedly display your ignorance with the whole court room aware that you do not know the meaning of a word or phrase except you, and you leave not knowing why you lost.
We suggest that you consider how much you have at stake and whether you want to risk the case that could be lost on one shibboleth. (smile)
Friday, May 11, 2012
What does it cost to file bankruptcy in Massachusetts (in attorney’s fees)?
11 May 2012
This is common question posed by a prospective client when they are “shopping” for a bankruptcy attorney to file under chapter 7 or chapter 13, especially by those that put a significant emphasis (often an overemphasis) on price. This post raises one consideration for those that emphasize price when choosing an attorney on a fixed fee basis.
A real low (fixed fee) price may seem attractive because you are used to shopping for a product that is the same from store to store. But that is not the situation when purchasing professional legal services. There is a reason (or many reasons) the price is so low, when comparing fixed fee quotes. I suggest that it is quite likely that in order for the cheapest lawyer to be profitable he will invest less time in a case than other lawyers would and/or he simply cuts corners. As the cheap lawyer operates in this way, the risk of mistake, a mistake that could cost a client (that is you) a loss of rights, property, or funds, increases dramatically.
If such a mistake is made in your case and you are damaged, this may give rise to a legal malpractice case. Pursuing such a case is not an easy task, for one significant reason. It is that, except in the most clear, egregious situation, proving a malpractice case requires an expert to testify on your behalf to argue that the services rendered (or not rendered) by your prior attorney fell below the standard of care. And an expert costs money, a lot of money. So you may have a great case but find yourself unable to pursue it because of the great costs. This is why you should take every step you can to avoid engaging a lawyer that is more likely to make a mistake, and I suggest that means avoiding the cheapest lawyer.
As grandmother used to say, an ounce of prevention is worth a pound of cure. Or as some say, you get what you pay for. This is a consideration for those of you putting too much of an emphasis on price when questioning how much a chapter 7 or chapter 13 bankruptcy costs in Massachusetts.
This is common question posed by a prospective client when they are “shopping” for a bankruptcy attorney to file under chapter 7 or chapter 13, especially by those that put a significant emphasis (often an overemphasis) on price. This post raises one consideration for those that emphasize price when choosing an attorney on a fixed fee basis.
A real low (fixed fee) price may seem attractive because you are used to shopping for a product that is the same from store to store. But that is not the situation when purchasing professional legal services. There is a reason (or many reasons) the price is so low, when comparing fixed fee quotes. I suggest that it is quite likely that in order for the cheapest lawyer to be profitable he will invest less time in a case than other lawyers would and/or he simply cuts corners. As the cheap lawyer operates in this way, the risk of mistake, a mistake that could cost a client (that is you) a loss of rights, property, or funds, increases dramatically.
If such a mistake is made in your case and you are damaged, this may give rise to a legal malpractice case. Pursuing such a case is not an easy task, for one significant reason. It is that, except in the most clear, egregious situation, proving a malpractice case requires an expert to testify on your behalf to argue that the services rendered (or not rendered) by your prior attorney fell below the standard of care. And an expert costs money, a lot of money. So you may have a great case but find yourself unable to pursue it because of the great costs. This is why you should take every step you can to avoid engaging a lawyer that is more likely to make a mistake, and I suggest that means avoiding the cheapest lawyer.
As grandmother used to say, an ounce of prevention is worth a pound of cure. Or as some say, you get what you pay for. This is a consideration for those of you putting too much of an emphasis on price when questioning how much a chapter 7 or chapter 13 bankruptcy costs in Massachusetts.
Friday, May 4, 2012
What should I do if I dispute the amount that I owe to a creditor?
4 May 2012
Well if you live in Massachusetts, you have a new tool to use against a creditor that is collecting the wrong amount. It is 940 Code of Massachusetts Regulations 7.08.
What the new regulation does is require creditors and debt collectors to validate debts that are at least 30 days past due. This means that if a proper dispute is raised, the creditor or debt collector has to provide certain information to support its claim. It further requires a creditor or debt collector to provide a notice to the consumer about this requirement when collecting a debt under such circumstances. The teeth to the regulation are that the debt cannot be collected until it is validated. The theory is that if there is a valid dispute or problem that the validation process will stop the improper collection of the debt. Alternatively, the process will clarify the matter for the consumer, possibly by allowing the consumer to discern exactly what the debt is and how it arose.
The reason that this new regulation is so significant is that the requirement applies to “creditors.” You see, in the debt collection world of law there are generally two kinds of entities, creditors and debt collectors. (There are also debt buyers, but they are more akin to debt collectors for the most part.) These have been defined under the Fair Debt Collection Practices Act (“FDCPA”), which is the federal law governing debt collection and has been fairly unchanged since the 1970’s. Roughly stated, under the FDCPA, a “creditor” is an entity that was originally owed the debt, a “debt collector is not the creditor but is an entity that is in the business of collecting past due debt (usually as an agent of a creditor). The FDCPA only applies to debt collectors and specifically excludes creditors. The FDCPA requires debt collectors to validate debts and this requirement for debt collectors has been long standing and is well known. But, states, so far, have generally regulated the debt collection world with the same distinction as the FDCPA, leaving creditors alone for the most part. Apparently, through this regulation, Massachusetts is the first state to require a “creditor” to validate a past due debt. This is the significance.
If you believe any entity is trying to collect the improper amount or you wish to use this regulation discussed, or any other debt collection law or regulation to your advantage, we suggest that you give us a call to see how we can help.
Wednesday, April 4, 2012
A debt collector is attempting to collect a real old debt, what can I do?
4 April 2012
If you live in Massachusetts, the Attorney General has strengthened protection of Massachusetts consumers with new state regulations for debt collection which may help.
The Massachusetts legislature gives the Attorney General the power to propose and issue regulations governing the collection of debts. The citation of the regulations is 940 CMR 7.00 et seq. and the enabling statute is Mass. Gen. Laws ch. 93A § 2(c). In 2011 the Attorney General proposed changes to the existing regulations for debt collection in Massachusetts and the regulations were indeed revised to the benefit of Massachusetts consumers. There are a number of changes, some notable, one of the most significant concerns the collection of time-barred debt.
The regulations added the requirement for debt collectors to make a disclosure when attempting to collect a time-barred debt. Debt is considered time-barred if a legal claim were brought to collect the debt it would be unenforceable because the statute of limitations has expired. A statute of limitations is a law that limits the amount of time a person can bring a legal claim for something. There are statutes of limitations for many types of civil claims. Statute of limitations bring some certainly to life to allow society to know at some point what is done is done.
Specifically, the new regulation adopted makes the attempt to collect time-barred debt an unfair business practice unless a certain, specific disclosure is made. This applies when the communication with the consumer is in writing or is oral. The disclosure states in part “THIS DEBT MAY BE TOO OLD FOR YOU TO BE SUED ON IT IN COURT.” In writing, the disclosure must be made on the first page of any letter. When the communication is oral, the disclosure must be made immediately before or after the first request for payment, or if no request is made, no later than immediately after reference to the debt is made.
Massachusetts is not the first state to raise this type of requirement, but apparently is part of a trend in the law to clamp down on the collection of time-barred debt. While not completely outlawing the practice, this new regulation sure puts a crimp into trying to do it. But even if the disclosure is made and Massachusetts law is complied with, there is some legal authority interpreting the Fair Debt Collection Practices Act, a federal law, which deems the collection of time-barred debt to be a violation of federal law.
So, if a debt collector has attempted to collect a debt that you think may have been time barred, there is more than Massachusetts law that applies; and you may want to give us a call to see if we can help.
If you live in Massachusetts, the Attorney General has strengthened protection of Massachusetts consumers with new state regulations for debt collection which may help.
The Massachusetts legislature gives the Attorney General the power to propose and issue regulations governing the collection of debts. The citation of the regulations is 940 CMR 7.00 et seq. and the enabling statute is Mass. Gen. Laws ch. 93A § 2(c). In 2011 the Attorney General proposed changes to the existing regulations for debt collection in Massachusetts and the regulations were indeed revised to the benefit of Massachusetts consumers. There are a number of changes, some notable, one of the most significant concerns the collection of time-barred debt.
The regulations added the requirement for debt collectors to make a disclosure when attempting to collect a time-barred debt. Debt is considered time-barred if a legal claim were brought to collect the debt it would be unenforceable because the statute of limitations has expired. A statute of limitations is a law that limits the amount of time a person can bring a legal claim for something. There are statutes of limitations for many types of civil claims. Statute of limitations bring some certainly to life to allow society to know at some point what is done is done.
Specifically, the new regulation adopted makes the attempt to collect time-barred debt an unfair business practice unless a certain, specific disclosure is made. This applies when the communication with the consumer is in writing or is oral. The disclosure states in part “THIS DEBT MAY BE TOO OLD FOR YOU TO BE SUED ON IT IN COURT.” In writing, the disclosure must be made on the first page of any letter. When the communication is oral, the disclosure must be made immediately before or after the first request for payment, or if no request is made, no later than immediately after reference to the debt is made.
Massachusetts is not the first state to raise this type of requirement, but apparently is part of a trend in the law to clamp down on the collection of time-barred debt. While not completely outlawing the practice, this new regulation sure puts a crimp into trying to do it. But even if the disclosure is made and Massachusetts law is complied with, there is some legal authority interpreting the Fair Debt Collection Practices Act, a federal law, which deems the collection of time-barred debt to be a violation of federal law.
So, if a debt collector has attempted to collect a debt that you think may have been time barred, there is more than Massachusetts law that applies; and you may want to give us a call to see if we can help.
Tuesday, March 6, 2012
Is the bank required to hold both the mortgage and note to properly foreclose in Massachusetts?
6 March 2012
Described by some as the “note and mortgage defense,” this is the question to be decided by the Massachusetts Supreme Judicial Court (“SJC”), the highest appellate court in Massachusetts, at any time now. The case is titled Eaton v. Federal National Mortgage Ass’n. The initial briefs have been filed, oral arguments have finished, and even the SJC extended its own deadline to issue its decision. Moreover, it asked for supplemental briefs responding to particular questions, which were filed. It is any day now.
Many legal practitioners are waiting with bated breath for the decision to be made, especially real estate attorneys, foreclosure attorneys, bankruptcy attorneys, and the few others that practice in what it known as “foreclosure defense “ (like the author of this post). The effect of this decision, if it does rule that a foreclosing party (the “mortgagee,” the entity holding the mortgage, usually a bank) must hold both the mortgage and note to properly foreclose, is predicted by many to be tremendous. Here is the reason.
It has generally been accepted under Massachusetts law that only the mortgagee is required to be held by the foreclosing party (mortgagee). Based in part on what has been exposed about the requirement that the foreclosing party just properly hold the mortgage (to understand that, you must read the Ibanez decision, and maybe the Bevilacqua decision), it is estimated that a requirement on the foreclosing party to hold both the mortgage and the note will put into question the validity of many more thousands of prior foreclosures. It appears that the SJC was concerned too about the magnitude of the effect of ruling both the mortgage and note were required. This author has been informed the particular questions the SJC requested responsive supplemental briefs to answer indicate this concern.
For those hoping to defend against a pending foreclosure this may sound like good news. However, those same people need to keep in mind that this desired possible outcome of the Eaton case may effect their title (right to ownership) in the event a foreclosure occurred on the property to prior owners. This means the dog some people think that they have in this fight, if it wins, may turn around to bite them.
In the event that you seek legal help to defend against foreclosure or otherwise have legal needs concerning maintaining your home, give us a call.
Sunday, March 4, 2012
Can I keep all my assets if I file bankruptcy? (Part 3)
5 March 2012
In prior posts (2 November 2011 and 3 December 2011) we addressed this general topic; whether you can keep all your assets even after you file bankruptcy, which is asked by all those contemplating filing. The focus was on when you would be absolutely sure you would not lose the asset. As we discussed, you can always file (in conjunction with claiming your exemptions) and then see what happens. As long as the assets were properly listed, you can wait until your case closes, the time of certainly. But since ending the discussion there is not responsive (or very fun), we discussed some ways a debtor may attain certainty sooner than when the case closes. One of those ways we discussed was to attempt to exempt “100% of FMV (fair market value)” of an asset, even when the exemption provides a fixed (maximum) dollar amount. We now update and add to our earlier comments on the propriety of making such an exemption claim with a current event.
It is a recent decision of the Bankruptcy Appellate Panel for the First Circuit on this issue titled In re Massey decided on 27 February 2012 (BAP No. MW 11-060). The decision runs through prior decisions from local bankruptcy courts and throughout the country on this issue and concludes “[w]e agree with the consensus which has emerged from the foregoing cases that the Debtors’ exemption claim of “100% of FMV” was facially invalid.” It also rules that an evidentiary hearing in the bankruptcy court, which is typically held after an initial nonevidentiary hearing, was not required or necessary. This means the Bankruptcy Appellate Panel believes the issue can properly be decided without the bankruptcy court having to consider any particular facts. Quite to the point the court concluded there was “no legitimate reason [to claim the 100% of FMV exemption].”
This legal controversy stems from differing opinions on the proper interpretation of Schwab v. Reilly which is an opinion of the United States Supreme Court that discusses the 100% of FMV exemption. 130 S. Ct. 2652, 2668 (2010). Schwab v. Reilly was mentioned in our prior posts; those wanting to delve into this issue in more depth should read it.
Keep in mind, In re Massey, like other decisions issued by the Bankruptcy Appellate Panel, is not binding on other cases. It is also too soon to know whether In re Massey will be appealed to a higher court. However, it indicates that the legal position of claiming “100% of FMV” may not win the day in the end. At this time, although still far from settled and the final tally is not in, so to speak, the position of claiming a 100% of FMV exemption certainly looks an underdog. For those having studied this evolving issue and take the opposing view, In re Massey begs the question why Justice Thomas even discussed the “100% of FMV” exemption claim in Schwab v. Reilly, seemingly as a legitimate legal position to take.
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