Virus update–March trustee hearings cancelled. No rescheduling plan has been announced yet. (Will there be a call-in plan instead??) The Judges here in the Alexandria VA bankruptcy court have invited the lawyers to a conference call on Wednesday. We may know more after that. This announcement applies only to the trustee hearings.  Those are the […] The post Virus update–March trustee hearings cancelled by Robert Weed appeared first on Robert Weed - AE.

   In a case study of what not to do in filing chapter 13 cases, the attorney for the Debtor in In re Chapman, 2020 Bankr. LEXIS 642, Case No. 19-26731-beh, (Bankr. E.D. Wis. 11 March 2020) was sanctioned under Rule 9011 for a portion of the fees incurred by the secured creditor.  A Holly Olm called the law office leaving a message seeking to file a chapter 13 case.  An appointment was scheduled the same day at which she disclosed that the case was actually for her mother, and that a foreclosure sale was scheduled for the next day regarding her mother's home.  Ms. Olm met with a paralegal at the firm, which prepared an emergency petition based on a power of attorney held by Ms. Olm for her mother.   The chapter 13 was filed the same day.  Ms. Olm asserted that her mother (Ms. Chapman) had filed one prior case, yet question 9 of the petition inquiring as to prior filings is answered 'none.'  Neither the attorney nor the paralegal ever spoke to the Debtor, Ms. Chapman prior to filing, nor did they even have contact information for her.  Neither spoke to the Ms. Olm's brother who was supposed to be helping to fund the repayment plan, again having no contact information for him.   Neither the attorney or the paralegal checked the court records to check who filed the prior cases, or to see if it affected the home mortgage.  The bankruptcy was filed as a bare petition, without a plan or schedules, and filed a request to pay the filing fee in installments (a request later denied).  The firm charged $600 for the emergency filing, but the contract provided that continued representation would be dependent on Ms. Olm providing additional information.  While the filing of a bankruptcy normally triggers an automatic stay under 11 U.S.C. §362(a) which prevents further collection actions.  However, as Ms. Olm did not disclose and the firm did not discover that two prior cases had been pending for Ms. Chapman within the last 12 months, resulting in the automatic stay not coming into effect when the last case was filed.  11 U.S.C. §362(c)(4)(A)(ii).  Instead, the debtor would have to file a motion to impose the stay, demonstrating that the filing of the later case is in good faith as to the creditors to be stayed.  11 U.S.C. §362(c)(4)(B).  Upon receipt of an administrative entry in the court docket noting the prior cases, the bank holding the mortgage filed a motion seeking an order that no stay was in effect.  Debtor's counsel filed an objection as well as a motion to continue the stay (apparently misunderstanding the effect of §362(c)(4)(A).  Upon being called by counsel for the bank and discussing the matter, Debtor's counsel withdrew his objection to the bank's objection and withdrew his motion to continue the automatic stay; and the Court signed the order confirming that no stay was in effect.  In the meantime Debtor's counsel filed a motion to impose the stay, to which both the bank and the trustee objected.  While he withdrew the motion a week later, the bank filed a motion for sanctions against both the Debtor and counsel asserting a violation of Rule 9011, Fed. R. Bankr. Proc.  The bankruptcy was dismissed on 15 August 2019 for failure to file the filing fee, but the motion for sanctions remained pending.  After trial the bank withdrew the motion for sanctions against the Debtor. but maintained the motion as to counsel.  At trial Ms. Chapman testified that she had no knowledge of the foreclosure, the sheriff's sale, or the bankruptcy until 23 July 2019 when she first learned that her house payments were not being made, her insurance had defaulted, her property taxes had not been paid, and that multiple foreclosures had been initiated by the bank resulting in multiple bankruptcies.  All the foregoing was attributed to her now estranged daughter, Ms. Olm.    After the death of Ms. Chapman's husband in 2013, she and her daughter decided to pool their resources to stay in the home, and Ms. Chapman gave Ms. Olm a power of attorney and allowed her to take over managing their finances.  Rule 9011 is modeled on Rule 11 of the Fed. R. of Civ. Proc.  Both sections have both a subjective and an objective component.  The subjective asks why the petitioner pursued the litigation: whether it was for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.1  The objective component asks whether the filing was made after reasonable investigation into the law and facts.2  Here the firm not only filed with the expected intent of halting confirmation of a sheriff's sale the following day, but due to its lack of investigation it failed to correct an error in the petition as to prior cases, filed an objection to the bank's motion, and filed a motion to continue the stay, all without having filed schedules.  The subsequently filed motion to impose the stay alleges no new information not contained in the motion to continue the stay.  Such belated filing belies the conclusion that counsel had fully investigated and understood the history of Ms. Chapman's bankruptcies.  The Court noted that prior cases can easily be checked on PACER.  While an extensive investigation is not required, a motion to impose the stay should not be filed without adequate support grounding it.  The amount of sanctions under Rule 9011 should be limited to what is sufficient to deter repetition of such conduct or comparable conduct by others similarly situated.3  The court should consider equitable considerations such as whether the conduct was part of a pattern of misconduct, whether counsel is experienced in the area of law, and whether the conduct was willful or negligent.4Given that this did not appear to be part of a pattern of misconduct, and the conduct appears to be negligent based on a sympathetic though untrue story by the daughter, rather than the $4,004.80 fees and costs requested by the bank, the Court awarded sanctions in the amount of 1/3 the bank's reasonable fees, to be determined.  Debtor counsel should always be extra vigilant when client's request emergency filings, doubly so when such emergency filing is for someone other than the person being met with.   1 In re Collins, 250 B.R. 645, 661 (Bankr. N.D. Ill. 2000).↩2 Collins, 250 B.R. at 661 (citing Szabo Food Serv., Inc. v. Canteen Corp., 823 F.2d 1073, 1083 (7th Cir. 1987)).↩3 Divane v. Krull Elec. Co., 319 F.3d 307, 314 (7th Cir. 2003); Fries v. Helsper, 146 F.3d 452, 459 (7th Cir. 1998).↩4 In re Brent, 458 B.R. 444, 462 (Bankr. N.D. Ill. 2011).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

From: CNN PoliticsBy: Eric Bradner and Arlette Saenz, CNN Sat March 14, 2020 (CNN)  Former Vice President Joe Biden says he now backs Massachusetts Sen. Elizabeth Warren's bankruptcy plan, endorsing his former Democratic rival's proposal to repeal portions of a law they had clashed over 15 years earlier.Biden touted his support for Warren's plan as an olive branch to supporters of Vermont Sen. Bernie Sanders in a virtual town hall for Illinois voters Friday night, calling it "one of the things that I think Bernie and I will agree on." He highlighted a portion of Warren's plan that would allow student loan debt to be eliminated in bankruptcy just like other debts. "I'm going to endorse -- I've endorsed -- Elizabeth Warren's bankruptcy proposal, which in fact goes further, allows for student debt to be relieved in bankruptcy, provides for a whole range of other issues that allows us to in fact impact on how people are dealing with their circumstances," Biden said. "So there's a whole range of things we agree on."Biden's move to back Warren's plan shows that, as he moves toward clinching the Democratic presidential nomination and seeks to soothe over tensions from a year-long intra-party battle, the former vice president is taking steps to embrace his former rivals and adopt planks of their platforms -- and is willing to move left to do so.  Warren's team got a heads-up from the Biden camp that he would be endorsing the senator's bankruptcy plan ahead of his public announcement on Friday, a Warren aide told CNN's MJ Lee. The two teams were in touch leading up to the announcement, the aide said. A Biden campaign aide said he would likely say more about his support for Warren's bankruptcy plan in his debate against Sanders on Sunday night.  Biden and Warren's high-profile battle over a 2005 bill that made it more difficult to declare bankruptcy, when he was a Delaware senator and leading advocate of the measure and she was a Harvard professor and vocal opponent, played a key role in inspiring Warren's move into politics.  As a presidential candidate, she used it to highlight her differences with Biden. On the day in April 2019 that Biden entered the race, she said at a rally that Biden had been "on the side of the credit companies."  The law, which was heavily backed by the banking and credit card industries, made it harder for Americans to get out of debt by filing for bankruptcy. Supporters of the measure said it would prevent financially irresponsible people from abusing the system, while opponents denounced it, saying it would hurt struggling people by increasing the regulation, documentation and costs of seeking bankruptcy protection. Bankruptcies plummeted after the law took effect, but not for the right reasons, consumer advocates argued. Biden was seen as a leading proponent of the bill at the time, though it was largely backed by Republicans and passed by a GOP-controlled Congress. Biden's campaign has argued he successfully fought for changes to the bill that prioritized child support and alimony in front of lenders and required credit card companies to warn borrowers about their interest rates. The Warren plan targets a series of provisions that she has criticized for years, arguing that they benefit credit card companies and big lenders at the expense of Americans struggling with consumer, household and student debt. Warren's proposal would make the bankruptcy system "simple, cheap, fast, and flexible," she wrote in a Medium post when she unveiled it in January. It would merge the two types of consumer bankruptcy filings -- Chapter 7 and Chapter 13 -- into one, offering filers a "menu of options" for dealing with their unpaid debt. It would eliminate what she termed "burdensome paperwork" that makes bankruptcy more expensive, deterring some from filing. It would reverse the 2005 law's requirement that filers seek pre-filing credit counseling, as well as the additional rules it placed on consumer bankruptcy attorneys. She would also reduce the cost of filing and make it easier for people to keep their homes and cars during bankruptcy. The proposal would make it harder for the wealthy to shield assets in trusts and would crack down on companies that violate consumer financial protection laws while trying to collect on debts. And her proposal would end the ban on shedding student loan debt in bankruptcy. CNN's Gregory Krieg and Tami Luhby contributed to this report.

NYC Cap on Ride-Hail Vehicles Made Permanent from Courthouse News ServiceMANHATTAN (CN) – The New York City Taxi and Limousine Commission voted Tuesday to permanently freeze the number of Ubers, Lyfts and other ride-hailing vehicles that drive here.A one-year cap on such vehicles was set to expire next week. It was first instituted last August after a 39-6 City Council vote.Taxicabs speed down Broadway near the intersection of Seventh Avenue and 42nd street in New York’s Times Square on May 5, 2005. (AP Photo/Kathy Willens)From 12,600 in 2015 to more than 80,000 last year, the number of Uber, Lyft, Via and similar vehicles on the city’s streets has exploded in recent years, according to Taxi and Limousine Commission reported by Bloomberg. More cars mean more of them drive around empty, increasing congestion and emissions.In addition to the vehicle cap, the commission voted Wednesday to reduce the amount of time drivers can spend looking for riders below 60th street in Manhattan. That allotted downtown time will drop to 31% by August 2020, down from its current level of 41%.Uber challenged the cap in court earlier this year, claiming it relied on bogus traffic data. The ride-hailing service said the cap was anti-competitive and “will have a disproportionate impact on residents outside of Manhattan who have long been underserved by yellow taxis and mass transit” in the outer-borough areas where most Uber trips occur.New Yorkers are split on the issue, with some saying the city should instead address other causes of its traffic-congestion crisis, such as by implementing congestion pricing in Midtown Manhattan. The city’s residents are also widely frustrated with the crumbling subway system, which sometimes forces people to find alternate methods of transportation, with the history of race discrimination among yellow cabs, and with the trend of sporadic taxi service in the outer-boroughs.Community groups in the city have fought against the cap, saying it stifles drivers’ abilities to buy rather than lease the cars they use.New York Mayor Bill de Blasio, a contender in the 2020 Democratic presidential primary, weighed in on the decision Wednesday.“For far too long, ride-share apps took advantage of their drivers,” de Blasio said in a statement. “Their wages plummeted and families struggled to put food on their tables. We stood up and said no more. We will not let big corporations walk all over hardworking New Yorkers and choke our streets with congestion. Our caps have resulted in increased wages and families finally have some relief.”Arthur Goldstein, a former attorney for the Taxicab Service Association, called the cap long overdue.“The ride-hailing cap will help to reduce congestion on our streets, but does not adequately address the consequences of nearly a decade of government inaction,” Goldstein, who is with the firm Davidoff Hutcher & Citron, said in an email. “When Uber, Lyft and other app-based companies began flooding the streets with cars, many yellow cab owners who have invested in taxi medallions were deprived of an opportunity to earn a return on their investment. These largely immigrant entrepreneurs who invested in taxi medallions are still suffering. Uber and Lyft continue to operate relatively free from regulations applied to their regulated yellow cab competitors and, with ten of thousands of ride-hailing vehicles remaining on the street, the problem persists.”

Bankruptcy Myth: If married, both spouses must file bankruptcy. If you are married, you have the option of filing bankruptcy singly, so this myth is simply not true. Hence, the only involvement your spouse may have in your bankruptcy will be supplying information and financial documents, like paystubs. Therefore, this may be especially true if the debt was incurred before you were married to your spouse.  Additionally, a spouse’s income will count towards your income for the purpose of income qualification for a Chapter 7 bankruptcy. If there is any debt accrued during the marriage and are community property, a spouse still does not need to necessarily file bankruptcy with you. Community debts will be discharged as to the name of the person filing bankruptcy.   Hence, the other spouse will be protected from the collection on the debt as long as you remain married.  Therefore, only if you get divorced may the creditor on these debts pursue your spouse for payment. Thus, the best idea regarding bankruptcy and your spouse may be to see which is more beneficial; Filing singly or filing bankruptcy jointly. If I File a Chapter 13 Bankruptcy, Does my Spouse Need to File? Much like with a Chapter 7 Bankruptcy, you are allowed to file a Chapter 13 bankruptcy without your spouse. However, please keep in mind, if you are sharing a household with your spouse, you must factor in and include both your income in your bankruptcy even if you file a Chapter 13 bankruptcy alone.  Please do not hesitate to call our Phoenix bankruptcy attorneys or Arizona Debt Relief Team with any questions regarding declaring chapter 13 bankruptcy in Arizona with your spouse. Arizona Bankruptcy Law Offices: Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 637-3427 Email: info@myazlawyers.com Website: https://myazlawyers.com/ Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 610-0132 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 231-2822 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 85392 Office: (623) 469-6603 The post Bankruptcy Myth: If married, both spouses must file bankruptcy. appeared first on My AZ Lawyers.

In the last few months, OneMain has been contacting me about reaffirmation negotiation on car loans. That took me by surprise. With the exception of Ford Credit, I’ve been strongly opposed to reaffirming cars.  Usually you can keep the car without reaffirming. and then give it back when your credit improves. I explain more about […] The post After Bankruptcy, OneMain Offers Car Reaffirmation Negotiation by Robert Weed appeared first on Robert Weed - AE.

  On 23 August 2019 the HAVEN Act was enacted, which among other things, treats VA disability payments similar to social security payments, excluding them from the means test.  The issue coming before the Court in In re Gresham, 2020 Bankr. LEXIS 627, Case No 18-56289 (Bankr. E.D. Mich. 10 March 2020) was whether such change in the law applied to pending chapter 13 cases.  Ms. Gresham filed under chapter 13 on 4 December 2018.  At the time of filing she had regular employment income as well as monthly disability payments from the Department of Veterans Affairs ("VA").   Her case was confirmed on 27 March 2019 requiring payments of $300/mo biweekly toward her chapter 13 plan which provided for a 100% distribution to unsecured creditors.  On 29 October Ms. Gresham  filed a motion to modify the plan to reduce the payments to $250/bi weekly and to reduce the distribution to unsecured creditors based an an amended schedule now deducing $1,789/month of VA disability benefits from disposable income. 11 U.S.C. §101(10A) defines current monthly income ("CMI").  While initially including all sources, it then goes on to exclude certain benefits, such as social security benefits.  The HAVEN Act added VA disability benefits to the benefits excluded from current monthly income.  The Supreme Court determined in Bradley v. School Board of Richmond, 416 U.S. 696, 711 (1974) that a court is to apply the law in effect at the time it renders its decision, unless doing so would result in manifest injustice or there is a statutory or legislative history to the contrary.   Thus, the HAVEN Act would normally apply to any CMI  subsequent to 23 August 2019 absent manifest injustice or contrary legislative history.  The trustee does not identify any manifest injustice that would arise from application of the HAVEN Act to cases pending at the time of its enactment.  Nor does there appear to be any contrary legislative history.  Instead, the legislative history would appear to support application of the law to pending cases given the state congressional intent to 'correct' the Bankruptcy Code's 'obvious inequity' in failing to exclude VA benefits from CMI similar to the exclusion of social security benefits.1   The Judicial Conference policy also supports application to all pending cases, as lines 9 and 10 of forms 122A-1, B-1, and C-1 were all amended  to expressly exclude VA benefits, and the Judical Conference requires use of these Official Forms as of 1 October 2019 in all cases, not just cases filed after passage of the HAVEN Act.  The next question is whether the HAVEN act applies retroactively.  The Trustee cited Landgraf v. USI Film Products, 511 U.S. 244 (1994) for the proposition that there is a presumption against retroactive legislation.  The unsecured creditors possessed a right to rely on the debtor's schedules when the case was confirmed providing for a 100% distribution.  To apply the HAVEN Act retroactively would impair such creditors rights.  Thus, retroactive application of the Act is not permitted.  The final question is whether modifying a confirmed plan as to future payments is in effect a retroactive application of the HAVEN Act.   While §1327(a) of the Code provides that a confirmed plan is binding on the debtor and each creditor, with consequential res judicata effect; §1329(a) provides that a plan may be modified including to increase or decrease the amount of payments.  While the 4th Circuit requires a substantial and unanticipated change in the debtor's financial condition, the 1st, 5th, and 7th Circuits do not require such showing.  The 6th Circuit has held that there is no requirement of an unanticipated or substantial change in circumstances for a plan modification under §1329.  The passage of the HAVEN Act is not a change in the Debtor's income or expenses, but rather a change in the law.  The passage of the HAVEN Act and it's change in the definition of CMI is not something the Debtor or the Trustee could have anticipated at the time of confirmation of the plan.  It is not unfair to Debtor's creditors to apply the HAVEN Act to the computation of CMI going forward, as all creditors were noticed and have not objected.  To require Debtor to continue to pay additional funds to unsecured creditors based on her VA benefits would be contrary to a policy Congress expressly rejected as 'obvious inequity.'  Further, the Debtor could just dismiss the case and file a new case without any issue as to the application of the HAVEN Act.  Thus the Court found that the HAVEN act applies to plan modifications after it's passage as to ongoing payments, but can not apply to affect distribution to creditors prior to its passage.1 165 Cong. Rec. H7215-01, 2019 WL 3307655 (statement of Rep. McBath).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

How to Undo a Tax Sale of Your Home in Philadelphia Homes can be scheduled for tax sales for failure to pay real estate taxes or other municipal liens. How do you get your house back after a Philadelphia tax sale? If your home has been sold at a Philadelphia sheriff sale, you have a number of options to reverse the tax sale. It is possible in many cases to get your property back after it has been sold at a tax sale, but you must carefully follow all the rules to do so. Four Ways You Can Reverse the Tax Sale of Your Home 1. Negotiate Directly with the Purchaser of Your Home. You can contact the person or organization that purchased the property at tax sale and negotiate a buy-back. In some cases, the purchaser will allow you to buy the property back directly from him or her by paying the purchase price plus an additional amount of money to cover costs. If you elect to negotiate directly with the purchaser, make sure that everything is in writing. Having an attorney with you will both protect your interests and protect you from possibly being defrauded. 2. File a Motion to Redeem the Property. Under the Pennsylvania Municipal Claims and Tax Liens Act, if you have the funds you can go to Philadelphia Court of Common Pleas and file a motion to redeem the property. How does this work? You will pay the amount the property was sold for, any costs that the new owner incurred and an additional 10% interest as well as certain other charges. To have the power to redeem the property you must have lived in the house for at least 90 days prior to the tax sale and continue to have lived in the property after the tax sale, and meet certain other requirements as well. In other words, the rules for redemption do not apply if the property is vacant. A motion to redeem must be filed prior to the expiration of the nine-month period to redeem from the time of the acknowledgment of the sheriff’s deed. 3. File an Objection to the Tax Sale or a Motion to Set Aside the Tax Sale. These will do the same thing, procedurally. You can argue that the tax sale must be set aside because you were never given a notice of the sale, or some other procedural deficiency on the part of the sheriff or purchaser. If you win the court could set aside the tax sale. Be advised that setting aside a tax sale is not a simple matter. If you cannot prove that you were not given proper notice or that the sale was otherwise improper, then the sale will be upheld.  This is usually not an easy standard to meet, but an experienced attorney can help you. 4. File a Chapter 13 Bankruptcy Case to Redeem the Property Over Time. You must file your Chapter 13 bankruptcy prior to the expiration of the redemption period. In your Chapter 13 plan, you will redeem your home by paying the amount the property was sold for, any costs that the new owner incurred and an additional 10% as well as certain other charges. You will pay the Chapter 13 Trustee every month, who in turn will pay the purchaser.   You are allowed to include not only the home which was sold at the tax sale, but any other debts that you owe such as credit cards, medical bills, personal loans, income taxes, any mortgage arrears, any arrears on an auto loan, student loans as well as other debts. How to Avoid Sheriff’s Sale in Philadelphia The best approach of all of these is to avoid a tax sale in the first place. How? By dealing with the problem prior to the scheduled sale. You can go into the taxing authority and either 1) pay them up to date if you have the funds or 2) request a repayment plan if you do not have all the funds to pay the tax debt owed on your property.  You can also go to the Court of Common Pleas and formally request a postponement of the sale for good cause. What to Do If Your Home Was Sold at a Philadelphia Tax Sale If your home has already been sold, then you can get your home back after a tax sale in Philadelphia by following the above as a guide and consulting with an attorney who is experienced in helping individuals and families getting their home back after a tax sale. Philadelphia Bankruptcy Attorney David M. Offen has helped many individuals to get their home back after a tax sale. To schedule your free, no-obligation consultation, please call 215-625-9600.   The post How to Reverse a Tax Sale of Your Home in Philadelphia appeared first on David M. Offen, Attorney at Law.

   One of the duties of the US Trustee is to review cases for abuse, including seeking dismissal if a chapter 7 case should have been filed under chapter 13.  Their primary tools for this is 11 U.S.C. 707(b) where the means test reflects income sufficient to fund chapter 13, and 11 U.S.C. §727(a) which provides for dismissal for bad acts or misrepresentations by the debtor.  In the case In re Ibbetson, 2020 Bankr. LEXIS 612, Case #19-21109-PRW (Bankr. W.D. N.Y., 5 March 2020) the debtor filed chapter 7 on 6 November 2019, and the 341 was concluded on 11 December 2019, with a no asset report filed the next day.  The timely filed schedules reflected that the Debtor's primary debts were tax debts rather than consumer debts.  On 6 February 2020 the US Trustee filed a motion to extend the deadline to file complaints under §707(b) and §727(a) by an additional 60 days.  Such deadline was set to expire on 10 February 2020.   The US Trustee, like other entities, has a deadline to file to seek to deny the discharge.  Rule 1017(e)(1) of the Fed. Rules of Bankr. Proc. provides a deadline of 60 days following the date set for the initial 341 to file such a complaint under §707.  Rule 4004(b) FRBP sets a similar deadline for complaints under §727.  Both rules permit an extension of such deadline, but only 'for cause.'  The party seeking such extension has the burden of proof to demonstrate such cause.  The party must establish at least a reasonable degree of due diligence to be granted the extension.1   When such party fails to show that it has diligently prosecuted and investigation of the underlying issues or offered a reasonable explanation explanation of of why that investigation could not be completed within the time allotted, it has failed to meet the burden.2     The Court found that the US Trustee had failed to meet the burden to extend the deadlines in this case.  As to §707(b) the US Trustee appears to concede that Mr. Ibbetson's debts are primarily for income taxes.  Income tax debts do not meet the definition of consumer debts under 11 U.S.C. §101(8) and §707(b) onl applies to cases involving primarily consumer debts (11 U.S.C. §707(b)(1).   As to the request under §727, the cause asserted by the US Trustee is 1) the lack of a staff attorney to investigate,  2) the lack of a response from Mr. Ibbetson's attorney to the letter sent by the US Trustee requesting an extension (but not requesting information), 3) the Assistant US Trustee was out sick for 2 business day, 4) in her absence her staff reviewed the schedules and listed to the recording of the meeting of creditors on February 4, and 5) the Asst. US Trustee met with her staff on 5 February and determined that there were material questions requiring further investigation, and 6) the US Trustee prepared a letter to Debtor's counsel requesting an extension.   But no showing was made of a reasonable effort to diligently prosecute an investigation.  The US Trustee cites a letter received by their office on 31 January 2020.  While the US Trustee reached out in some manner to the chapter 7 trustee when it received the letter, it did not reach out to Mr. Ibbetson's attorney to investigate the allegations in the letter.  At the minimum a phone call to such attorney would have been an important an necessary first step in such investigation.  The emerging standard in this area is moving away from the liberal standard to one requiring the movant to establish a reasonable degree of due diligence.  Courts examine 1) whether the moving party had sufficient notice of the deadline and information to file an objection; 2) the complexity of the case; 3) whether the moving party has exercised due diligence; and 4) whether the debtor has been uncooperative or acted in bad faith.3   While the letter giving rise to the concern was delivered just 10 days prior to the deadline, all other factors are in favor of the Mr. Ibbetson.  Mr. Ibettson has not been uncooperative or acted in bad faith.  The case is not complex.  The final factor, whether the US Trustee diligently prosecuted and investigation of the issues raised by the mysterious letter tips in favor or Mr. Ibbetson as well.  Primarily due to the failure of the US Trustee to make factual inquiries of Mr. Ibbetson's attorney.  This era of shrinking staffs and the need to do more work with fewer resources exemplifies the need to replace slower methods of communication, such as letters, with less costly and more efficient methods, such as telephone or email.  The US Trustee should not be rewarded for clinging to such outdated methods of communication.  Should the US Trustee find a substantial issue, it still can seek revocation of the discharge under 11 U.S.C. §727(d) and (e) for one year after the discharge is granted.1 In re Bomarito, 448 B.R. 242, 248 (Bankr. E.D. Cal. 2011) (quoting In re Molitor, 395 B.R. 197, 205 (Bankr. S.D. Ga. 2008).↩2 Bomarito, 448 B.R. at 251↩3 In re Nowinski, 291 B.R. 302, 305-06 (Bankr. S.D.N.Y. 2003).↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100mbarnett29@gmail.comhttps://hillsboroughbankruptcy.com

Outstanding debt is higher than ever. The Federal Reserve Bank of New York reports that household debt in the United States has now reached its highest-ever total: more than $14 trillion.Regardless of the debt you’re suffering from, you might not see an end in sight. Is there a chance you can get out of debt without paying?The answer is maybe, depending on a number of factors. Here are some ways you can explore getting out of debt that don’t include paying it.How you can get out of debt without payingDebt might feel homogeneous, but each type is different — so your options will depend on which type you’ve accrued. Before you stop paying, make sure you know the limitations and the long-term ramifications of doing so.How to get out of student loan debt without payingThere are a few different options for getting out of student loan payments. Your loan, job status and sometimes the school you attended all determine what you’re eligible for.Income-driven repayment plans: These revise your monthly payment to 10 to 20 percent of your income for the next 20 or 25 years (depending on the plan). After that, the remaining loan balance is forgiven.Public Service Loan Forgiveness: Available for those who work in the public sector, like employees at the federal, state and local level, and for those who work for a nonprofit organization. After you’ve made 120 qualifying payments while working full time for a qualifying employer, the rest of your Direct Loans will be forgiven.Teacher Loan Forgiveness: Open to teachers who work five consecutive years at a low-income elementary or secondary school and to those who work at an educational service agency. You might qualify for forgiveness of up to $17,500 of your Direct Loans or Stafford Loans.Perkins Loan Cancellation: Teachers, firefighters, law enforcement officers and others are eligible for Perkins Loan cancellation or discharge. Cancellation can happen over the course of five years, while discharge could happen in the event of bankruptcy, death or disability.Closed school discharge: If your school closed while you were attending (or soon after you withdrew), you may qualify to have your federal student loans discharged.Discharge options: You could get your loans discharged in the event of death, permanent disability or — very rarely — bankruptcy.For most options, you’ll need to make qualifying, timely payments each month. However, even then, not everyone qualifies or receives forgiveness. For instance, less than 1 percent of Public Service Loan Forgiveness applicants were approved and considered eligible.You can’t have a defaulted loan forgiven, but defaulted loans may qualify for discharge, depending on the loan and the program.How to get out of credit card debt without payingIf you have more credit card debt than you can handle, there are a few steps you can take; however, you may want to consider the repercussions.If you stop paying your credit card bill, it gets turned into collections and your credit score tanks. But there’s a statute of limitations for how long creditors can sue you for outstanding credit card debt, which varies from three to 10 years in most states. You could skip payments, but you might be liable for them later. Even at that point, if you are sued for outstanding payment, you most likely wouldn’t win the case.Another route is debt settlement, which is when you settle your debt with the current lender (or collection agency, if it’s reached that point) for less than what you owe. You may not be responsible for your entire credit card debt, but you’d still pay some of it.How to get out of debt through bankruptcyBankruptcy should only be considered if you don’t have any other options. Filing for bankruptcy may sound like you’re starting over, but depending on the route you go, you may still be on the hook for some of your outstanding debt.In a Chapter 7 bankruptcy filing, some of your assets are sold off to pay back debt, meaning you could lose your home and personal property. A few months after filing, your remaining debt will be discharged — although Chapter 7 typically won’t cover things like student loan debt or child support.In a Chapter 13 filing, you get set up on a court-ordered repayment plan. Any remaining debt after a certain time has passed, like five years, might be discharged. This process means you’ll spend even longer paying off your debt, and you’ll also have a bankruptcy filing on your credit report.Depending on the type of bankruptcy you file, a bankruptcy filing could stay on your credit report for up to 10 years, which is why it’s important to carefully weigh your options and your outstanding debt. Debt collectors can’t attempt to collect a debt that was discharged in bankruptcy, and they can’t continue collection activity while the bankruptcy case is pending — but the filing itself will have long-term effects on your financial health.Why not paying off debt doesn’t workYour credit report is a vital part of your financial well-being. Late or missed payments, defaults, collections and bankruptcies not only crush your credit score, but can also hurt your chances of taking out a loan or getting approved for a credit card.Not paying your bills also puts you in a dangerous position with lenders. Avoiding payment means that creditors can sue you for unpaid bills. In some states, you could get your wages garnished or have your assets seized. Even if you aren’t making the payments directly, you’re still paying your outstanding debt.Alternatives to bankruptcyIf you have the chance to avoid bankruptcy, you should take it. Here are some alternatives to consider.Supplement your income: Whatever you need to do to start paying off your debt, do it now. Ask for a raise at work or move to a higher-paying job, if you can. Get a side-hustle. Start to sell valuable things, like furniture or expensive jewelry, to cover the outstanding debt.Ask for assistance: Contact your lenders and creditors and ask about lowering your monthly payment, interest rate or both. For student loans, you might qualify for temporary relief with forbearance or deferment. For other types of debt, see what your lender or credit card issuer offers for hardship assistance. If you have the means, see if friends and family will help you.Take out a debt consolidation loan: If you have many different types of debt, look into consolidation options. Taking out a debt consolidation loan is a way to simplify your finances — putting all of your debt in one place — and potentially pay less interest in the long run.Get professional help: Reach out to a nonprofit credit counseling agency that can set up a debt management plan. You’ll pay the agency a set amount every month that goes toward each of your debts. The agency works to negotiate a lower bill or interest rate on your behalf and, in some cases, can get your debt canceled.The bottom lineIt can feel like it’ll take a lifetime to get out of a huge debt trap. You may skip payments, consider not paying at all or file for bankruptcy. While you might, in certain circumstances, get out of paying your outstanding debt, the likelihood is low. And more often than not, it’s harmful to your financial well-being to avoid paying your outstanding debt.