Need debt relief in PA? Bankruptcy gives you a fresh start debt free and stress free! Can you get a fresh start through debt settlement in Philadelphia? Sometimes. But if you have multiple creditors it will be difficult to negotiate debt forgiveness with each of them.  Filing Chapter 7 bankruptcy or Chapter 13 bankruptcy brings all of your creditors to the table, allowing you to get unsecured debt discharged and renegotiate your secured debt, like your mortgage and your car loan! Concerned about what life will be like after bankruptcy? You needn’t be. Read on to find out what a bankruptcy discharge does for you, how bankruptcy affects your credit, and how you can start over after bankruptcy by renting or buying a house or buying a car. What is a Bankruptcy Discharge? The discharge in bankruptcy is an important part of how you get your fresh start. Your discharge order will provide that most of your unsecured debt, like credit cards, medical debt, and personal loans, is discharged – meaning, you are no longer personally responsible for paying off that debt.  Generally, alimony and child support are exempt from discharge and those obligations remain after the bankruptcy closes.  Student loans are rarely dischargeable. Chapter 7 and Chapter 13 both offer a discharge of unsecured debt, but Chapter 13 offers additional opportunities to: cram down a car loan and pay the car off in your 3- to 5-year plan;strip off a second mortgage and get it discharged as unsecured;get government fines and fees and IRS taxes discharged, under certain conditions;cure mortgage, car loan, or support arrears over your 3- to 5-year plan. How Long Does a Bankruptcy Stay on Your Credit Report? Up to ten (10) years. However in many cases, you can rebuild credit much quicker if you follow the instructions of the attorney who is filing your bankruptcy case. How Can I Improve My Credit Score After Bankruptcy? Again, the fact that you filed a bankruptcy petition will remain on your credit report up to ten years if you filed a Chapter 7 case, and seven years after the date of filing if you filed Chapter 13 and completed your plan, which for most Chapter 13 debtors is two years after receiving a discharge.   Many people who file bankruptcy successfully find that, since they had a low credit score prior to filing because of all their past-due debt, their credit score improves quickly after they receive a discharge because the discharge improved their debt-to-income ratio so dramatically. There are many ways in which you can rebuild your credit without having to wait seven to ten years. How Do I Rebuild Credit After Bankruptcy? The best way to rebuild credit following bankruptcy is to pay all bills in full and on time. And believe it or not, there are credit cards for people with bankruptcies. It is advisable to obtain a credit card with a low limit (like $500 or $1000) to use and pay off in full each month. This helps show your credit-worthiness. Other steps you might consider taking are: Become an authorized user on a card that a close friend or loved one with good credit has.Take out a “credit builder” loan, which is a small loan that is paid off quickly.Get a secured credit card, where you deposit the limit, usually $500 to $1000, and prove credit-worthiness by paying it off in full each month. How Do I Start Over After Bankruptcy? Once you’ve received a discharge of your unsecured debt, and perhaps restructuring of your secured debt, you have the opportunity to evaluate your budget against your income and make what adjustments you need to make to live within your means going forward. With regard to your secured debt, such as a car loan or a mortgage, if you filed under Chapter 7 you had the opportunity to surrender the collateral and get that debt discharged, or to reaffirm the debt and keep the collateral, or keep up with the payments without reaffirming the debt. You might even have been able to redeem the car, or get an affordable mortgage modification.  If you filed under Chapter 13 either you have gotten caught up with loan arrears or restructured the debt. In any case, your attorney will have worked with you to make sure that, with your unsecured debt discharged and perhaps your secured debt restructured, your income is sufficient to pay your expenses going forward. Can I Rent After Bankruptcy? Yes. What you need to do is show potential landlords that you are not a credit risk because the debt obligations you could not meet are now discharged.  Proof of income will likely be required, and some landlords might require a larger security deposit due to your bankruptcy – but you will be able to rent soon. How Soon After Bankruptcy Can I Buy a House? You CAN buy a house after filing Chapter 7 or Chapter 13 bankruptcy, but a waiting period will apply.  If you filed Chapter 7 bankruptcy, you will wait at least two years to be eligible for an FHA mortgage. During that two year period you must show a positive credit history. If you needed to file bankruptcy due to events out of your control, such as medical issues, job loss, death of your spouse, or natural catastrophe, the FHA can reduce the waiting period to one year before buying a house after bankruptcy. VA loans are also subject to the two-year waiting period and a minimum credit score. If you filed Chapter 13 bankruptcy, you can apply for an FHA loan anytime after 12 months, during which you must show you’ve made all of your Chapter 13 plan payments in full and on time. You will also need to seek the permission of the bankruptcy court to purchase a home while in Chapter 13. The Bankruptcy Court will typically grant permission as long as it sees that you are able to make the payments without struggling. If you are seeking a conventional loan, such as those made by lending institutions then sold to servicers Fannie Mae and Freddie Mac, the rules are different.  If you filed Chapter 7 due to mismanagement of your finances, you will need to wait four years before applying for a loan. If you had to file Chapter 7 due to circumstances beyond your control, the waiting period is reduced to two years. If you filed Chapter 13, completed your plan and received a discharge, you will need to wait two years before applying for a conventional loan. If your Chapter 13 case was dismissed and you did not receive a discharge, the waiting period is increased to four years. Those debtors filing multiple bankruptcy cases in the last seven years must wait five years before applying for a conventional loan.  Can I Buy a Car after Bankruptcy? Yes. Again, the rules are different depending upon whether you filed under Chapter 7 or Chapter 13. If you filed Chapter 7 you will need to wait until your case closes to apply for a car loan. But prior to applying for a car loan you should do what you can to improve your credit score. It takes about six months after you receive your bankruptcy discharge to see a bump up in your credit score as the credit bureaus take notice of your improved debt-to-income ratio. And in those months you should be making all of your monthly payments in full and on time.  Once these six months pass, you can start applying for car loans. Be advised that you will be offered a high interest rate or a longer repayment term because you are considered higher-risk having filed bankruptcy. If you have no other choice, take the loan and aim to pay it off a bit early, you will save on interest. Even an extra $50 per monthly payment will help. Another way to save money is to recruit a co-signer with good credit, or simply decide to purchase a less expensive car than you would otherwise. Certified pre-owned cars can be a very good value. If you’ve filed a Chapter 13 petition you will need either need the permission of the Court or the approval of the Chapter 13 Trustee to purchase a car while your case is active, and you will need to show that you can afford the payments as well as the Chapter 13 plan payments and your other expenses. An experienced Fresh Start Attorney in Philadelphia will help you. Do you need to start over? If you are considering debt settlement because you are concerned about the consequences of filing bankruptcy, we can help you decide which is best for your unique financial situation and goals. Your initial consultation with us is free of charge! If you are considering filing bankruptcy because you need a fresh start, but are concerned about your credit and know that you need to buy a car or a home soon, call or email us to schedule your free, no-obligation consultation. We will look at your finances and explain all of your options. Call us at 215-625-9600 to review your specific situation with us – free of charge! The post Philadelphia Bankruptcy Lawyer Helps with Fresh Start After Bankruptcy appeared first on David M. Offen, Attorney at Law.

 https://www.theguardian.com/us-news/2021/oct/02/new-york-city-taxi-medallion-drivers-debt

Having a doctor’s letter included in your Social Security Disability Insurance (SSDI) benefits application could significantly help your claim. Medical professionals, especially your treating physician, add a level of credibility and helps examiners understand how your condition impedes your ability to work. However, not all doctor’s letters are effective. You want to ensure that, if […] The post How Do I Ask My Doctor to Write My Disability Letter? appeared first on .

A common fear people have when discussing the idea of filing for bankruptcy is losing their property, especially their house. Equity is the key factor when determining how your home is handled in bankruptcy. Your equity is the proceeds you would realize if you sold your home after all liens, fees, and other costs were […] The post How Much Equity Can You Have in a Home and Still File For Bankruptcy in Pennsylvania? appeared first on .

 https://www.cityandstateny.com/policy/2021/09/nyc-and-taxi-drivers-have-very-different-ideas-how-tackle-medallion-debt/185660/

 https://www.cutimes.com/2021/09/29/former-melrose-cu-ceo-alan-kaufman-sentenced-to-prison/

A Reaffirmation Agreement is an agreement that Chapter 7 debtors may sign to reassume personal liability for secured debt and keep the collateral. Most often Chapter 7 debtors will reaffirm debt for their car, boat, rv, or other high-value personal property.  Filing a Chapter 7 bankruptcy petition breaks all contracts the debtor had previously. Signing and filing a Reaffirmation Agreement re-creates the contractual relationship between creditor and debtor. Usually, the debtor must be current on the loan, although debtors’ attorneys have succeeded in rolling small amounts of loan arrears into the balance of the Reaffirmation Agreement.  In many cases, it may not be worth it to reaffirm a debt unless the creditor offers you some benefit such as a lower interest rate. What Does Reaffirm Mean? Normally, a Chapter 7 debtor is discharged of debt and the secured lender can repossess a car or boat or other property (called “the collateral”) once the bankruptcy case closes, or sooner if the lender files a Motion for Relief from the Automatic Stay with the Bankruptcy Court. In many cases, however, the lender will not seek to repossess the collateral if you are up to date on the payments. In order to keep the collateral, a debtor reaffirms the debt by signing a new contract reassuming personal liability for mortgage or car debt. This overrides the discharge and the debtor remains liable for this debt following the entry of the discharge order and the closure of his or her bankruptcy case. You should speak with your lawyer to find out if reaffirmation is right for you. Usually, the terms of the Reaffirmation Agreement will mirror the terms of the original loan, and that is why it may not always be a good idea to sign them. Some debtor’s attorneys have been successful in negotiating more favorable terms, such as a lower interest rate. Reaffirmation Agreements and Bankruptcy Exemptions In order to retain the collateral and sign and file a Reaffirmation Agreement, the attorney for the Chapter 7 debtor must creatively apply exemptions to any equity the debtor has in the collateral to protect the collateral from the seizure and sale by the Chapter 7 Trustee for the benefit of creditors. Is a Reaffirmation Agreement Necessary? Entering into a Reaffirmation Agreement is always wholly voluntary. However, since the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“the Act”) was passed into law, Chapter 7 debtors wishing to retain any collateral securing debt are supposed to file a Reaffirmation Agreement to definitively prevent lenders from repossessing the collateral after the bankruptcy case closes.  Why? Because most secured loans contain a clause providing that filing bankruptcy itself violates the contract between lender and debtor. While this is a point of frequent litigation, from a lender’s point of view the act of filing bankruptcy and a discharge of the underlying debt reduces the lender’s available remedies if the debtor later defaults on payments.  All a lender can do at that point is repossess the collateral and sell it. Most of the time collateral sells at auction for far less than the debtor owns on the loan, but absent a Reaffirmation Agreement the lender can no longer pursue the debtor for any account deficiency because that debt has been discharged, meaning, the debtor no longer is personally responsible to pay that debt. The upshot is, even if a Chapter 7 debtor remains up to date on monthly payments, if the debtor does not sign and file a Reaffirmation Agreement the lender is sometimes free to exercise the right to repossess the collateral under the Act once the bankruptcy case closes and anytime thereafter regardless of whether the debtor is current on payments, or not. This is why you need to discuss the specific facts of your case with your attorney to see if Reaffirmation is appropriate for you. How Long Do You Have to File a Reaffirmation Agreement? A Reaffirmation Agreement must be filed within 60 days after the first scheduled 341(a) Meeting of Creditors. This deadline may be extended by the Bankruptcy Court.  What Happens When You Reaffirm a Debt? Once a Chapter 7 debtor executes a Reaffirmation Agreement, the lender or the debtor’s attorney files it with the Bankruptcy Court and the Court schedules a Reaffirmation Hearing. What Happens at a Reaffirmation Hearing? A debtor and his or her attorney appear at the courtroom of the judge assigned to the debtor’s Chapter 7 case. The hearing may be in person or held remotely, especially since the onset of Covid-19. The judge will ask the debtor questions about his or her finances in order to determine whether entering into the Reaffirmation Agreement is in the debtor’s best interests. The judge’s primary concern is whether the debtor can realistically afford to make the monthly payments going forward. A Chapter 7 debtor should consider carefully whether the monthly payment is affordable, because if it is not and the debtor fails to make payments, the lender then has the right to foreclose or repossess and also the right to sue for the account deficiency, since the Reaffirmation Agreement overruled a discharge of that debt. In many cases signing a Reaffirmation agreement may not be the best move and you need to discuss the same with your lawyer. What Happens if I Do Not Sign a Reaffirmation Agreement? If you do not sign a Reaffirmation Agreement when the secured creditor sends you one, you run the risk of having the collateral repossessed following the closure of your Chapter 7 Bankruptcy case. What Happens if You Do Not Reaffirm a Mortgage? Probably nothing if you keep current on your mortgage payments. If a debtor reaffirms a mortgage and continues to make monthly mortgage payments, the lender will report the account as current to the credit bureaus. However, as a matter of practice, most mortgage lenders do not send debtors a Reaffirmation Agreement to sign.  There is little risk that the lender will foreclose on the debtor’s property as long as the debtor makes monthly mortgage payments timely and in full. Foreclosure is an expensive procedure for mortgage lenders, so as long as you keep current on the mortgage you should be able to stay in the house. If you do not reaffirm a mortgage and at some point in the future you can no longer afford to make monthly mortgage payments, you can walk away from the property with no personal liability for the mortgage because you received a discharge of that debt. Can I Sell My House if I Did Not Reaffirm? Yes, you can. You are still the record owner of the property, and if you did not reaffirm you are not personally liable for the mortgage. The property could be sold for less than what you owe (short sale) and you would not be liable for the deficiency on your account, but this would require the approval of the mortgage lender. Can I Trade in My Car After Reaffirmation? Yes, you can trade your car in as long as your new loan pays off the balance of your previous loan.   Can I Cancel a Reaffirmation Agreement? Yes, you have 60 days to rescind a Reaffirmation Agreement, if the court approved it but you subsequently changed your mind. Does Reaffirming Help Credit? Yes! The lender will report your loan as current to the credit bureaus. If you do not reaffirm, the lender does not report payments you make in many cases, so making monthly payments without a Reaffirmation Agreement may not help rebuild your credit following your Bankruptcy case. Should I Reaffirm? Can I Reaffirm? If you are considering filing bankruptcy but are concerned about whether you should reaffirm any secured debt, or whether the collateral you want to keep has too much equity to reaffirm, contact an experienced bankruptcy attorney to schedule your free consultation. To be forewarned is to be forearmed! Knowledge gives you power to do the right thing. The post What is a Reaffirmation Agreement in a Chapter 7 Bankruptcy? appeared first on David M. Offen, Attorney at Law.

 That article can be found at Jacobin Magazine at  https://www.jacobinmag.com/2021/09/nyc-taxi-cab-medallion-debt-speculative-bubble-values-nytwa-city-hall

 The bipartisan duo of Sen. John Cornyn from Texas and Sen. Elizabeth Warren from Massachusetts have introduced a new bill tackling bankruptcy venue. The Bankruptcy Venue Reform Act of 2021, which can be found here, is the latest attempt by the Senators to level the bankruptcy playing field. The new bill, which is supported by the Commercial Law League of America and a national network of insolvency professionals, expands upon the Senators prior work.A Renewed Sense of PurposeThe bill contains a new set of findings and statement of purpose.(a) FINDINGS.—Congress finds that— (1) bankruptcy law provides a number of venue options for filing bankruptcy under chapter 11 of  title 11, United States Code, including, with respect to the entity filing bankruptcy— (A) any district in which the place of incorporation of the entity is located; (B) any district in which the principal place of business or principal assets of the entity are located; and (C) any district in which an affiliate of the entity has filed a pending case under title 11, United States Code; (2) the wide range of permissible bankruptcy venue options has led to an increase in companies filing for bankruptcy outside of their home district— the district in which the principal place of business or principal assets of the company is located; (3) the practice described in paragraph (2) is known as ‘‘forum shopping’’; (4) forum shopping has resulted in a concentration of bankruptcy cases in a limited number of districts; (5) forum shopping— (A) prevents small businesses, employees, retirees, creditors, and other important stake holders from fully participating in bankruptcy cases that have tremendous impacts on their lives, communities, and local economies; and (B) deprives district courts of the United States and courts of appeals of the United States of the opportunity to contribute to the development of bankruptcy law in the jurisdictions of those district courts; and (6) reducing forum shopping in the bankruptcy  system will strengthen the integrity of, and build public confidence and ensure fairness in, the bankruptcy system.  (b) PURPOSE.—The purpose of this Act is to prevent the practice of forum shopping in cases filed under chapter 11 of title 11, United States Code.  Cracking Down on State of Incorporation and Affiliate Filing Abuses The proposed legislation replaces 28 U.S.C. Sec. 1408, the current venue statute, with a revamped section. The proposal creates separate rules for individuals and entities. As with existing law, individuals may file in the district where their domicile, residence or principal assets have been located for the preceding 180 days or the longest part of the preceding 180 days. An entity other than an individual may file in the district where its principal place of business or principal assets have been located for the prior 180 days or the greater part of the preceding 180 days. An entity may also file in the district where an affiliate that owns or controls 50% of the voting stock of the entity or an entity that is its general partner has a pending case, but only if the affiliate filed in a proper district.    The new rules for entities change two provisions of existing law. First, the state of incorporation is eliminated as a permissible venue. Many U.S. corporations are incorporated in Delaware (or more recently in Nevada) but do not have any physical presence there. Second, the ability to file based on an affiliate's filing is greatly limited. In the recent National Rifle Association case, the NRA created a Texas-based subsidiary, caused that entity to file bankruptcy in Texas and then used that filing to bootstrap the NRA's case into Texas. The NRA case was an example of how a company can manufacture venue under existing law. If the Cornyn-Warren bill were passed, affiliate venue could only be used to allow a filing if the parent company had already filed in a permissible venue.The legislation also adds definitions of principal place of business and principal assets. For a company that files reports with the Securities and Exchange Commission, its principal place of business would be the address contained on its SEC filings absent proof by clear and convincing evidence. The definition of principal assets would exclude cash. In one notorious case, a Russian company transferred funds to the U.S. and then claimed jurisdiction here based on the cash. This legislation would prevent a company from shifting its bank account to the desired forum and then filing based on the transferred cash. There is also a provision which would not allow affiliate filing based on equity ownership if that ownership had changed in the preceding year. New Transfer ProvisionsThe proposal also contains new rules for challenging venue. If a motion to dismiss a case based on improper venue or transfer it is filed, the court must rule upon the motion within fourteen days after it is filed. Additionally, the proponent of venue must establish that its venue is proper by clear and convincing evidence. Under existing law, there have been cases where a motion to transfer venue was filed in the first week of a case but the hearing was not held for months by which time the case was far along and transfer would be made more difficult. Additionally, under existing law, substantial deference is granted to the debtor's choice of forum. The requirement to justify a filing choice by clear and convincing evidence turns this existing law on its head.Easier Access for Governmental AttorneysFinally, the legislation contains a provision requiring the Supreme Court to prescribe rules allowing governmental attorneys to appear in any bankruptcy court, district court or bankruptcy appellate panel without paying a fee or associating local counsel. This has been a priority of many state attorney general's offices which can be required to appear in cases filed on a national basis.The Need for the LegislationAccording to a press release from Sen. Warren's office, over the past twenty years, 70% of companies with assets over $100 million have filed in a district other than the one where the principal office is located. Sen. Warren stated:Wealthy corporations should not be able to run across the country to find a favorable court to file bankruptcy. While they manipulate the system to file for bankruptcy wherever they please, affected communities — like workers, creditors, and consumers — lose. This bipartisan bill will prevent big companies from cherry-picking courts that they think will rule in their favor and to crack down on this corporate abuse of our nation's bankruptcy laws.Sen. Cornyn emphasized the detriment to small businesses.Corporations seeking courts sympathetic to their interests often ‘forum shop,’ tilting the playing field away from small businesses. I urge my colleagues to support this bipartisan, common-sense solution to close this loophole and help restore public trust in our bankruptcy system.The two senators have introduced bankruptcy venue legislation together since 2018. Sen. Cornyn was Texas Attorney General when Enron filed bankruptcy in the Southern District of New York based upon a minor affiliate. His office tried unsuccessfully to bring the case back to Texas where the criminal cases of the Enron executives were pending. Before being elected to the Senate, Sen. Warren taught bankruptcy at several law schools, including the University of Texas and Harvard.The Current EnvironmentFor many years, large cases gravitated to just two districts, the District of Delaware, where many large companies were incorporated, and the Southern District of New York, where many large banks are present. In recent years, the Southern District of Texas and the Eastern District of Virginia have become favored filing sites as well. The Southern District of Texas created a complex case panel consisting of just two judges, Judge Marvin Isgur and Judge David Jones (who I must add are outstanding judges). The Southern District of Texas saw many oil and gas filings, as well as J.C. Penney and Tailored Brands (owner of Men's Wearhouse and Joseph A. Bank). Toys R Us chose the Eastern District of Virginia as the locus for its bankruptcy case. While the transition from a duopoly to a gang of four has brought large case filings to a larger number of bankruptcy courts, they reinforce that under current law, venue remains largely discretionary for large companies while small companies and individuals do not have this freedom. Outside of big bankruptcy cases, forum shopping is condemned as an abuse. Under today's bankruptcy venue laws, forum shopping for large companies has become an entitlement. 

This is the final installment of our investigation into the Michigan elections case and the three forms of sanctions awarded as well as how the same principles apply in Bankruptcy Court. This installment discusses sanctions under the court's inherent authority. The Court’s Inherent Authority The final type of sanction available arises under the Court’s inherent authority. In Chambers v. NASCO, Inc., 501 U.S. 32, 49-50 (1991), the Supreme Court held that courts have an inherent authority to sanction bad faith conduct in litigation. In the Sixth Circuit (where the Michigan elections case was pending), the test is: (i) the claims advanced were meritless; (ii) counsel knew or should have known this; and (iii) the motive for filing the suit was for an improper purpose such as harassment. Opinion, p. 42. An award under the Court’s inherent authority is limited to compensating the opposing party for fees incurred solely because of the misconduct. Prior to awarding sanctions, the court must give the offending party notice that sanctions are being considered and the opportunity to respond. The plaintiffs in the Michigan case argued that the comments to Fed.R.Civ.P. 11 suggested that Rule 11 displaced the court’s inherent authority. However, Judge Payne found that sanctions under Rule 11 could exist side by side with the power to sanction under the Court’s inherent authority. Unlike 28 U.S.C. §1927, which can apply to counsel and to persons admitted to conduct cases, sanctions under the court’s inherent authority may be applied to counsel and parties to litigation. As with section 1927, sanctions under the court’s inherent authority are compensatory rather than punitive, meaning that the opposing party may recover its fees and costs incurred.     The Michigan Court did not have difficulty finding that it could award sanctions under its inherent authority. As discussed in the preceding subsections, Plaintiffs’ counsel advanced claims that were not well-grounded in the law, as demonstrated by their: (i) presentment of claims not warranted by existing law or a nonfrivolous argument for extending, modifying, or reversing the law; (ii) assertion that acts or events violated Michigan election law, when the acts and events (even if they occurred) did not; and (iii) failure to inquire into the requirements of Michigan election law. Plaintiffs’ counsel advanced claims that were also not well-grounded in fact, as demonstrated by their (i) failure to present any evidentiary support for factual assertions; (ii) presentment of conjecture and speculation as evidentiary support for factual assertions; (iii) failure to inquire into the evidentiary support for factual assertions; (iv) failure to inquire into evidentiary support taken from other lawsuits; and (v) failure to inquire into Ramsland’s outlandish and easily debunked numbers. And, for the reasons discussed above, Plaintiffs’ counsel knew or should have known that these claims and legal contentions were not well-grounded in law or fact. Moreover, for the reasons also discussed above, the Court finds that Plaintiffs and their counsel filed this lawsuit for improper purposes. Opinion, p. 102. Sanctions Under The Court’s Inherent Authority in Bankruptcy Court When bankruptcy courts award sanctions under their inherent authority, they do so under 11 U.S.C. §105, which allows the court to “issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.”  In re Cochener, 360 B.R. 542 (Bankr. S.D. Tex. 2007), aff’d, Cochener v. Barry, 297 Fed.Appx. 382 (5th Cir. 2008) illustrates sanctions under section 105 in bankruptcy. In the Cochener case, a less experienced bankruptcy attorney recognized that there were problems with a case he was handling and asked a more experienced bankruptcy counsel to step in. Attorney Barry realized that the debtor may have omitted assets from her schedules and that the trustee and the debtor’s ex-husband were both concerned about this. Attorney Barry attempted to extricate the debtor from the case. He filed a motion to dismiss the case in which he asserted that (1) "No creditor in this case would suffer any legal prejudice by its dismissal;" and (2) "The interests of the creditors and Debtor would be better served by the dismissal of this bankruptcy proceeding rather than its continuation and adjudication." This was problematic because creditors would be better off if the trustee discovered undisclosed assets and administered them. Attorney Barry then informed the trustee that he assumed that the continued 341 meeting would be adjourned based on the motion to dismiss. He advised the debtor not to attend the meeting and neither he nor the debtor did attend. They then failed to attend a second continued meeting. When the trustee requested that the debtor appear at a Rule 2004 examination, attorney Barry did not respond. However, when an examination was noticed, attorney Barry responded that the trustee was overreaching by requesting documents on transactions that took place more than one year prior to bankruptcy. In fact, a fraudulent transfer action could be brought under state law for transactions going back four years. The Rule 2004 exam was reset several times. The debtor did not produce documents and did not attend the examination. When the debtor failed to appear, attorney Barry filed a motion to withdraw. At this point, he had been involved in the case for approximately five months. When attorney Barry withdrew, the Trustee filed a response stating that he reserved the right to seek sanctions. Nearly five years later, the Trustee filed his motion for sanctions. At the hearing on motion for sanctions it came out that attorney Barry had been sanctioned twice before in the prior year. The court denied sanctions under Rule 9011 for the reason that the Trustee did not send a safe harbor letter until after it was too late to withdraw the offending pleading. However, the court found that it could award sanctions under its inherent authority. The court found that attorney Barry had engaged in bad faith conduct in five instances: (1) Barry concocted a reason for the Debtor not to attend the continued Meeting of Creditors, and then instructed her not to attend this meeting; (2) Barry himself did not attend the continued Meeting of Creditors; (3) Barry filed a Motion to Dismiss the Debtor's case, which included blatantly false factual and legal contentions, for the purpose of delaying and hindering the Trustee's further examination of the Debtor at the continued Meeting of Creditors; (4) Barry drafted a letter to the Trustee, dated October 17, 2001, grossly misstating the law regarding the allowable reach-back period for fraudulent transfers under the Bankruptcy Code in an attempt to mislead the Trustee and avoid having to produce documents; and (5) Barry instructed the Debtor not to produce the documents requested by the Trustee on June 6, 2001, which both prior counsel to the Debtor (i.e., Hawks) and the Debtor herself had already committed to produce. 360 B.R. at 574.  The Court awarded sanctions of $25,121.89. This award was affirmed on appeal. How the Cases are the Same and Different The Michigan Elections case and the Cochener case are substantially different. In the Michigan case, the sanctions under the court’s inherent authority largely duplicated the court’s analysis under the other forms of sanctions and related to the pleadings filed in the case. In the Cochener case, sanctions were not available under any other basis and primarily involved conduct outside of court as opposed to filing frivolous pleadings. The Cochener case is particularly tragic because the attorney was trying to extricate the client from the client’s bad deeds. None of the five incidents were particularly egregious in and of themselves. However, as in the Grossman case discussed yesterday, it was the cumulative pattern of conduct which proved sanctionable. The commonality between King v. Whitmer and Cochener was that both cases involved a bad faith attempt to manipulate the court system. While the Michigan case was an attempted assault on democracy, Cochener was more an attempt to blur the lines a little bit which went on too long to be ignored. Conclusion In the ordinary course, attorney conduct is regulated by professionalism and self-interest. Sanctions are available for cases that fall outside the bounds of zealous advocacy, cases in which the judicial process has been misused. Sanctions differ from punitive damages in that they are primarily intended to compensate parties injured by bad faith litigation. The Michigan case involved an attempt to derail democracy while the various bankruptcy examples involved more mundane cases of debtor-creditor relationships gone amuck. The three forms of sanctions may all be appropriate in the same case, as shown by King v. Whitmer, or there may only be a single remedy available as shown in some of the bankruptcy examples. The final question is what should the attorneys have done differently to avoid being sanctioned. The lazy answer is to say they should never have filed frivolous pleadings. However, sometimes even good attorneys show bad judgment. The lesson to be learned from the four cases in this series of posts is that there are frequently moments when the attorney could have stepped aside and blunted the consequences of rash decisions. In King v. Whitmerone such lost opportunity was when the City of Detroit sent its Rule 11 safe harbor letter on January 5, 2021. Some of the attorneys, particularly local counsel, played a small role in submitting the scandalous pleadings. If they had filed a notice with the court disavowing the pleadings filed under their signature (or their signature block) by January 26, 2021, they would not have been subject to sanctions under Rule 11. When the District Court denied the request for preliminary injunction on December 7, 2020 and the self-described mootness date of December 14, 2020 passed, the plaintiffs could have non-suited their claims. Waiting until January after motions to dismiss had been filed was the conduct which led the court to conclude that the attorneys had unreasonably and vexatiously multiplied the proceedings. In re Tayloris a bit more difficult. In that case, the debtor’s lawyer never sent a safe harbor letter (and was in fact sanctioned himself) so that sanctions were initiated on the court’s own initiative. It may be that the firm dealing with a volume lift stay practice didn’t recognize its peril until it was too late. However, it could have at least apologized to the debtor and offered to work with the debtor instead of blaming the black box. The Grossman case is much more obvious. At some time during the four years that the attorney flooded the court with pleadings, he could have just said no. The Cochener case contains a detail I did not discuss above. The Trustee’s counsel contacted attorney Barry on numerous occasions over the years to try to work out a resolution. Maybe attorney Barry didn’t think he had done anything that egregious. Maybe he thought the trustee’s attorney was being a pest. However, with the benefit of hindsight, he most likely could have settled for much less prior to the time the motion for sanctions was filed. Another detail I didn’t mention was that when the trustee finally recovered the debtor’s hidden assets, one of them had been vandalized by the debtor. At that point, the attorney’s instinct for self-preservation might have kicked in and saved himself a lot of trouble down the road. I was going to end with the saying, when you find yourself in a hole, stop digging. However, I think I will close with a different saying: there is no bad situation you can find yourself in which can’t be made worse by doubling down on your original bad decisions. Many thanks to Eliana Jimenez for her editorial assistance with this series and my other recent blog posts.