Miller, Luring, Venters & Wesner Co., L.P.A. is proud to announce a new office location located in Sidney Ohio. Our Address is 110 E. Poplar St., Suite 7, Sidney, OH 45365. Our local telephone number is (937) 897-9015. We are located directly downstairs from the FABULOUS Murphy’s Pub and right beside Behr Design! I would recommend both places immensely. Well, Murphys for food and drink, and Kevin Behr for his genius graphic design skills. We look forward to representing clients in the Sidney and Shelby county areas in the areas of: Bankruptcy Domestic Relations: Divorce / Disolution / Child Custody Estate Planning Criminal Matters Probate The post New Law Office Opens in Sidney, Ohio appeared first on Chris Wesner Law Office.

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF OHIO WESTERN DIVISION In Re SAVAN THACH Debtor : : : : : : Case No. 19-10514 Chapter 13 Judge Hopkins ORDER DIRECTING ATTORNEYS H. LEON HEWITT, MARY FOSTER, AND JESSICA GOLDBERGER TO APPEAR AND SHOW CAUSE WHY SANCTIONS SHOULD NOT BE IMPOSED Attorneys occasionally need a reminder of the importance of the office they occupy in our justice system and the attendant elevated responsibilities. While still serving as Chief Judge of the New York Court of Appeals, Justice Benjamin N. Cardozo once observed: “Membership in the bar is a privilege burdened with conditions. [A lawyer is] received into that ancient fellowship for something more than private gain. He [or she becomes] an officer of the court, and, like the court itself, an instrument or agency to advance the ends of justice.” People ex rel. Karlin v. Culkin, 248 N.Y. 465, 470–71, 162 N.E. 487 (1928). The This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio. IT IS SO ORDERED. Dated: February 13, 2020 Case 1:19-bk-10514 Doc 54 Filed 02/13/2 02/13/20 11:39:47 Desc Main Document f 16 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 2 of 16 Case No. 19-10514 Court is reminded of Justice Cardozo’s timeless remarks because the attorneys who represent the Debtor, Savan Thach, in this proceeding appear to have forgotten or simply ignored duties associated with becoming an attorney which, fundamentally, are to follow the published rules of the court, applicable legal authorities, and precedent in the quest “to secure the just, speedy and inexpensive determination of every action and proceeding.” Fed. R. Civ. P. 1. Introduction On February 20, 2019, the Debtor filed a Chapter 7 case that was later converted to Chapter 13 by Agreed Order entered June 26, 2019 (Doc. 16). On December 19, 2019, a hearing on confirmation on the Debtor’s Chapter 13 plan was held. At the hearing, the Chapter 13 Trustee, Margaret A. Burks (the “Trustee”), expressed serious concerns about the Debtor’s apparent representation by multiple attorneys. From a review of the docket, the statements of the Trustee, and based upon a colloquy between the Court and the counsel of record for the Debtor in these proceedings, it appears that the Debtor‘s legal representation has passed indiscriminately between two or more attorneys; these attorneys (until recently) appear not to have been regularly associated or partners in the same law firm; and finally, the attorneys’ client (the Debtor) may not have given informed consent to the representation provided or written permission for the attorneys to share fees. The conduct alleged in the Preliminary Findings that follow, if accurate, may constitute multiple serious violations of important provisions of the Bankruptcy Code and Rules, the Ohio Rules of Professional Conduct, and the Local Rules and ECF Procedures. These infractions may warrant sanctions being imposed by this Court against one or more of the 2 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 3 of 16 Case No. 19-10514 attorneys or the law firms involved, including Upright Law, Amourgis & Associates, H. Leon Hewitt, Mary Foster, and Jessica Goldberger. Preliminary Findings ECF Procedure 8(a)1 specifically invokes the provisions of Fed. R. Bankr. P. 9011 and directs: The transmission by a Filer or User to ECF of any document constitutes any required signature of that Filer or User on such document, including the signature on a certificate of service. The Filer need not manually sign a transmitted document. The transmission is the equivalent of a signed paper for all purposes, including, without limitation, the Federal Rules of Bankruptcy Procedure, including Rule 9011, the Bankruptcy Code, and the Local Bankruptcy Rules of this Court. (Emphasis added). The majority of the Debtor’s pleadings have been transmitted using the CM/ECF Filer or User login credentials and electronic signature of attorney H. Leon Hewitt. For example, the petition (Doc. 1), the Statement of Intent (Doc. 4), the Verification of Creditor Matrix (Doc. 5), the Certificate of Creditor Counseling (Doc. 6), Amended Schedules (Doc. 9) and several other documents appear to have been transmitted electronically by Mr. Hewitt. Stunningly, however, at the first confirmation hearing held in the case, Mr. Hewitt stated to the Court that, despite the use of his CM/ECF Filer credentials and electronic signature, and his appearance on behalf of the Debtor at the scheduled hearing, he was, nevertheless, not counsel for the Debtor. Instead, Mr. Hewitt asserted that Ms. Mary Foster is the actual attorney representing the Debtor and that he is simply aiding and providing 1 The Southern District of Ohio Administrative Procedures for Electronic Case Filing can be found on the Court’s website at: https://www.ohsb.uscourts.gov/pdffiles/AdminProcs_Clean. pdf 3 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 4 of 16 Case No. 19-10514 guidance to Ms. Foster. According to Mr. Hewitt, at the time the petition was filed, he and Ms. Foster had been sharing office space and both had been receiving contract work from an entity called Upright Law.2 However, Mr. Hewitt conceded that Ms. Foster and he had not been otherwise regularly associated together or law partners in any firm. Since filing the petition, however, Mr. Hewitt claims that both he and Ms. Foster have discontinued their association with Upright Law. Mr. Hewitt now asserts that both he and Ms. Foster are currently working with the Amourgis & Associates law firm.3 According to Mr. Hewitt, Jessica Goldberger is the managing attorney for the Cincinnati office of Amourgis & Associates. And, also according to Mr. Hewitt, Ms. Goldberger is in charge of 2 A number of other courts have questioned the representation practices of Upright Law. See In re Klitsch, 587 B.R. 287 (Bankr. M.D. Pa. 2018) (counsel affixed e-signatures to documents and filed them without obtaining signatures from their clients); Allen v. Fitzgerald, No. 7:18-cv-00134, 2019 WL 6742996 (W.D. Va. December 11, 2019); In re Blevins, No. 17- 60019-rlj7, 2019 WL 575664 (Bankr. N.D. Texas Feb. 12, 2019) (raising concerns related to potential improper fee sharing); In re Vandesande, No. 16-33708, 2017 WL 474320 (Bankr. N.D. Ohio Feb. 3, 2017) (questioning the exclusion of basic bankruptcy services from Upright Law’s fee agreements); In re Scharf, No. 17-01442-als7, 2018 WL 3863796 (Bankr. S.D. Iowa March 8, 2018) (counsel was unable to demonstrate he had even met his client prior to the meeting of creditors, thus “[t]he facts demonstrate that UpRight provided only minimal representation to Scharf in his bankruptcy case and do not support a conclusion that the fees charged were reasonable.”); In re Cook, No. 14-36424, 2019 WL 6903968 (Bankr. N.D. Ill. Dec. 17, 2019); In re Scott, No. 16-41545-can7, 2018 WL 5905068 (Bankr. W.D. Mo. Oct. 24, 2018); In re Banks, No. 17-10456, 2018 WL 735351, at *17 (Bankr. W.D. La. Feb. 6, 2018) (“The scope of the professional negligence on the part of . . . UpRight in the handling of Banks’ Chapter 7 case is substantial. . . . Banks’ case should have been simple; in fact, UpRight has admitted as much. . . . Due to lack of legal knowledge, skill, thoroughness, preparation, and general negligence on the part of . . . UpRight, Banks has still not received a discharge.”); In re Richard, No. 16-42080-659, 2018 WL 5733508 (Bankr. E.D. Mo. Oct. 10, 2018) (ordering the disgorgement of fees pursuant to 11 U.S.C. § 504); In re White, No. 17- 40093-JJR, 2018 WL 1902491 (Bankr. N.D. Ala. April 19, 2018) (ordering disgorgement of fees and barring UpRight from filing cases in the Northern District of Alabama for eighteen months). 3 Despite this representation, neither of the attorneys are listed on the Amourgis website, while both attorneys still appear on the Deighan Law/Upright Law website. See https://www.amourgis.com/attorneys/; https://www.uprightlaw.com/bk/bankruptcyattorneys. Moreover, a review of the Ohio Supreme Court Attorney Directory shows Mr. Hewitt as being employed by the Hewitt Foster Legal Group, and Ms. Foster is listed as a “solo practitioner.” See https://www.supremecourt. ohio. gov/ AttorneySearch/#/72693/attyinfo; https://www.supremecourt.ohio.gov/AttorneySearch/#/81729/attyinfo. 4 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 5 of 16 Case No. 19-10514 arranging and assigning all attorney court appearances for that firm. On the day of the confirmation hearing, Mr. Hewitt explained that Ms. Foster was unavailable because Ms. Goldberger had sent her to attend a scheduled hearing in a different court. Following the conclusion of the confirmation hearing and after being admonished by the Court of the potential rules violations, Mr. Hewitt filed a Notice Confirming Attorney Representation (Doc. 48) (the “Notice”) seeking to correct his mistakes, but as it turns out the filing only added to the confusion. It states: Now comes Debtor (s) (sic.) Savan Thach who gives notice that he wishes to be represented by attorney H. Leon Hewitt. Prior to this, debtor paid Upright Law who then was referred to Mr. Hewitt’s office. Mary T. Foster had been the attorney handling debtor’s Chapter 13 case but she has since left for another firm. In the interest of continuity, Debtor names Mr. Hewitt as attorney of record. The Law Resolution of this matter requires review of several Bankruptcy Code provisions, Bankruptcy Rules, and ECF procedures which were adopted by this Court and carry the force of law. Among these are 11 U.S.C. §§ 329 and 504, Fed. R. Bankr. P. 2016 and 9011, Ohio Prof. Cond. Rules 1.1 and 1.5(e), and ECF Procedures 8(a) and 8(c). Each may be directly implicated by the conduct of Mr. Hewitt, Ms. Foster, and Ms. Goldberger based upon the record compiled in this case. Section 329 and Rule 2016 Foremost on the list of Bankruptcy Code provisions and Rules potentially violated are 11 U.S.C. § 329 and Rule 2016. Section 329(a), in relevant part, provides: (a) Any attorney representing a debtor in a case under this title, or in 5 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 6 of 16 Case No. 19-10514 connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation. “Section 329 of the Bankruptcy Code not only recognizes the bankruptcy court’s traditional concern for the need to carefully scrutinize the compensation paid to the debtor’s attorney, but also underscores that the court has a duty to do so, sua sponte and even in the absence of objections.” 3 Collier on Bankruptcy ¶ 329.01 (Richard Levin & Henry J. Sommer eds. 16th ed.); see also In re Williams, 304 B.R. 191, 194 (Bankr. N.D. Ohio 2007). Rule 2016 establishes the procedure for filing the statement required by § 329. In pertinent part, Rule 2016 provides: (a) Application for Compensation or Reimbursement. An entity seeking interim or final compensation for services, or reimbursement of necessary expenses, from the estate shall file an application setting forth a detailed statement of (1) the services rendered, time expended and expenses incurred, and (2) the amounts requested. An application for compensation shall include a statement as to what payments have theretofore been made or promised to the applicant for services rendered or to be rendered in any capacity whatsoever in connection with the case, the source of the compensation so paid or promised, whether any compensation previously received has been shared and whether an agreement or understanding exists between the applicant and any other entity for the sharing of compensation received or to be received for services rendered in or in connection with the case, and the particulars of any sharing of compensation or agreement or understanding therefor, except that details of any agreement by the applicant for the sharing of compensation as a member or regular associate of a firm of lawyers or accountants shall not be required. . . (b) Disclosure of Compensation Paid or Promised to Attorney for Debtor. Every attorney for a debtor, whether or not the attorney 6 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 7 of 16 Case No. 19-10514 applies for compensation, shall file and transmit to the United States trustee within 14 days after the order for relief, or at another time as the court may direct, the statement required by § 329 of the Code including whether the attorney has shared or agreed to share the compensation with any other entity. The statement shall include the particulars of any such sharing or agreement to share by the attorney, but the details of any agreement for the sharing of the compensation with a member or regular associate of the attorney’s law firm shall not be required. A supplemental statement shall be filed and transmitted to the United States trustee within 14 days after any payment or agreement not previously disclosed. (Emphasis added). “Federal Rule of Bankruptcy Procedure 2016 is designed to require an applicant for compensation provide the bankruptcy court with sufficient information to allow the court to respond appropriately to the application. The rule also encourages the applicant to comply with the Code and Rules in order to avoid losing any entitlement to compensation.” 9 Collier on Bankruptcy ¶ 2016.01 (Richard Levin & Henry J. Sommer eds. 16th ed.); see also In re Dental Profile, Inc., 441 B.R. 885, 908 (Bankr. N.D. Ill. 2011). “Rule 2016 is part of a statutory and rule-based framework designed to provide fair compensation to persons working in the bankruptcy arena while protecting bankruptcy estates from over-reaching.” Id. The arrangement between Mr. Hewitt, Ms. Foster, Upright Law, and Amourgis & Associates calls into question who the Debtor’s attorney is, and whether any of the compensation he or she has received should be subject to disgorgement. Indeed, the Amended Disclosure of Compensation of Attorney for Debtor form (Doc. 25) shows that Mr. Hewitt was paid $1,225 for his representation of the Debtor before this case was filed, and states he is still owed $2,475.4 The Amended Disclosure, however, appears to contradict 4 The Application attached to the Amended Disclosure of Compensation indicates Mr. Hewitt provided a myriad of services to the Debtor, including an initial client interview, analysis of the Debtor’s financial condition, advising on which chapter of bankruptcy to file under, advising the Debtor of his obligations under the Bankruptcy Code, preparation of the (continued…) 7 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 8 of 16 Case No. 19-10514 several assertions made in the Notice.5 See Doc. 48. Moreover, as noted, Mr. Hewitt, prior to filing the Notice and despite his appearance at the hearing on behalf of the Debtor, disclaimed having possessed any knowledge of the Debtor’s financial affairs, the circumstances surrounding the Debtor’s need to file bankruptcy, chapter choice, or anything about the case. Based on the record presented, several legal questions arise regarding Mr. Hewitt’s conduct and whether he and the other attorneys and law firms involved in this case are in compliance with § 329 and Rule 2016. These are questions Mr. Hewitt, Ms. Goldberger, and Ms. Foster will need to answer. Section 504 A less well known but extremely important provision of the Bankruptcy Code implicated by the law firms’ and attorneys’ conduct in this case is 11 U.S.C. § 504. In relevant portion, § 504 provides: (a) Except as provided in subsection (b) of this section, a person receiving compensation or reimbursement under section 503(b)(2) or 503(b)(4) of this title may not share or agree to 4 (…continued) bankruptcy petition and schedules, preparation of the Debtor’s chapter 13 plan, representation of the Debtor at his § 341 Meeting of Creditors, review of claims, and answering routine phone calls and questions. All of these services are encompassed by this District’s“no look fee” codified in L.B.R. 2016-1(b)(2)(a). See In re Williams, 357 B.R. 434, 439 n. 3 (6th Cir. BAP 2007) (concluding “that ‘no-look’ fees are permissible and should be encouraged in appropriate circumstances”) (citing In re Boddy, 950 F.2d 334 at 338 (6th Cir. 1991) (other citations omitted); see also, Boone v. Derham–Burk (In re Eliapo), 468 F.3d 592 (9th Cir. 2006) (approving issuance of and reliance upon presumptive guideline fees for routine services in chapter 13 cases); In re Cahill, 428 F.3d 536, 541 (5th Cir.2005) (approving the use of a “precalculated lodestar” as a basis for awarding attorney’s fees in “typical” chapter 13 cases); In re Kindhart, 160 F.3d 1176 (7th Cir.1998) (approving use of presumptive fees in routine cases). 5 The Notice (Doc. 48) proclaims that the Debtor paid Upright Law, rather than Mr. Hewitt as stated in the Amended Disclosure. Compare Doc. 25 and Doc. 48. The Notice also proclaims that Ms. Foster discontinued handling the Debtor’s case because she left Upright Law for another law firm, even though she and Mr. Hewitt both are now associated with Amourgis & Associates and are being assigned cases and supervised by Ms. Goldberger, the Cincinnati based managing attorney for that firm. 8 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 9 of 16 Case No. 19-10514 share– (1) any such compensation or reimbursement with another person; or (2) any compensation or reimbursement received by another person under such sections. (b) (1) A member, partner, or regular associate in a professional association, corporation, or partnership may share compensation or reimbursement received under section 503(b)(2) or 503(b)(4) of this title with another member, partner, or regular associate in such association, corporation, or partnership, and may share in any compensation or reimbursement received under such sections by another member, partner, or regular associate in such association, corporation, or partnership. (Emphasis added). Given the concessions on the record already made by counsel, it would appear that the compensation sharing exceptions contained in § 504(b) for attorneys regularly associated in a law firm or law partners do not apply. The Court must therefor scrutinize the conduct potentially engaged in by the attorneys under § 504(a). “Section 504 of the Bankruptcy Code prohibits any person receiving compensation or reimbursement of expenses under subsection 503(b)(2) or (b)(4) from sharing such compensation with another person.” 4 Collier on Bankruptcy ¶ 504.01[1] (Richard Levin & Henry J. Sommer eds. 16th ed.); see also In re Fair, 2016 WL 3027264, at *12 (Bankr. N.D. Tex. May 18, 2016) (“Section 504 clearly applies in chapter 13 cases”). The rationale is straight-forward. “Whenever fees or other compensation is shared among two or more professionals, there is incentive to adjust upward the compensation sought in order to offset any diminution to the share of either. Consequently, sharing of compensation can inflate the cost of a bankruptcy case to the bankruptcy estate, and therefore to the creditors.” Id, at ¶ 504.01. Similar to the concerns expressed by the Court under the portion of the Order addressing § 329 and Rule 2016, it also appears on the surface at least that Mr. Hewitt, Ms. Foster, Upright Law, and Amourgis & Associates may have engaged in an unlawful fee 9 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 10 of 16 Case No. 19-10514 sharing arrangement prohibited by § 504(a). Mr. Hewitt’s odd response that he has no knowledge of this case despite pleadings being repeatedly transmitted under his ECF Filer credentials and electronic signature does nothing to advance the interests of the Debtor and needlessly delays these proceedings, inconveniencing not only the Debtor but this Court and the Trustee’s office. The delays created by the anomalous manner in which this case has been handled by the attorneys and law firms raises serious questions about whether they should be compensated at all or have the attorney’s fees substantially reduced. See 11 U.S.C. §§ 329 and 330.6 Instead, it appears from the conduct described in this Order that the attorneys may warrant sanctions being imposed against them. The Court will be especially concerned with whether evidence exists that the joint representation provided by the attorneys inflated the costs to the estate and diminished the return to creditors, in contravention of § 504(a)’s anti-fee sharing provisions. Rule 9011 Courts consider violations of Rule 9011 among the more serious. The nature of these infractions cut to the core of the attorney-client relationship and an attorney’s responsibilities as an officer of the court. Sanctions can be imposed against the attorney who violates the Rule, his or her law firm or a party. Rule 9011, in pertinent part, provides: (a) Signature. Every petition, pleading, written motion, and other paper, except a list, schedule, or statement, or amendments thereto, shall be signed by at least one attorney of record in the attorney’s individual name. A party who is not represented by an attorney shall sign all papers. . . (b) Representations to the Court. By presenting to the court 6 Section 330(a)(4)(B) applies all of the provisions of § 330(a) to debtors’ counsel in chapter 12 and 13 cases. Section 330(a)(2) allows courts to reduce counsel fees upon its own motion or the motion of any party in interest. 10 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 11 of 16 Case No. 19-10514 (whether by signing, filing, submitting, or later advocating) a petition, pleading, written motion, or other paper, an attorney or unrepresented party is certifying that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances,— (1) it is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation; (2) the claims, defenses, and other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (3) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on a lack of information or belief. (c) Sanctions. If, after notice and a reasonable opportunity to respond, the court determines that subdivision (b) has been violated, the court may, subject to the conditions stated below, impose an appropriate sanction upon the attorneys, law firms, or parties that have violated subdivision (b) or are responsible for the violation. (Emphasis added). Fed. R. Bankr. P. 9011 seeks to “deter baseless filings in bankruptcy court and thus avoid unnecessary judicial effort, the goal being to make proceedings in that court more expeditious and less expensive.” 10 Collier on Bankruptcy ¶ 9011.01 (Richard Levin & Henry J. Sommer eds. 16th ed.); see also Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 393 (1990). These prudential tenets appear to have been trampled upon by counsel in this case without regard for or sadly even an awareness of the rules governing the conduct by all attorneys who practice in this Court. As previously mentioned, Mr. Hewitt’s electronic signature upon the various pleadings transmitted in this matter constitute certifications to this Court that he had 11 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 12 of 16 Case No. 19-10514 conducted reasonable investigations into the bases for the relief sought.7 Yet, Mr. Hewitt has admitted that he had performed no such investigation whatsoever at the time any of those pleadings were transmitted. Instead, Mr. Hewitt indicates that he simply allowed another attorney to transmit documents using his ECF Filer credentials and electronic signature, although he had done no investigation of the facts in the Debtor’s case. Then, when appearing in Court, Mr. Hewitt professed to lack any knowledge regarding the facts or circumstances in the case. The manner in which this case has been prosecuted has caused needless expense and a waste of time, not only potentially to the estate, but also as a drain upon finite judicial resources–the very things Rule 9011 is intended to prevent. Ohio Rules of Professional Conduct Having transmitted documents electronically with the Court and then claiming to lack knowledge of legal contentions therein, Mr. Hewitt may have also violated the Ohio Prof. Cond. Rule 1.1.8 That Rule provides: A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. (Emphasis in original). Moreover, if Ms. Foster was not fully capable of representing the Debtor, she too may have violated this Rule. “Competent handling of a particular matter includes inquiry into and analysis of the factual and legal elements of the problem, and use of methods and 7 LBR 9011-4 states: “The transmission by an ECF filer or user to the ECF System of any document constitutes the signature of that filer or user for purposes of Rule 9011.” 8 Local Bankruptcy Rule 2090-2 of the United States Bankruptcy Court for the Southern District of Ohio expressly provides that the Ohio Rules of Professional Conduct apply to proceedings in bankruptcy. The Ohio Rules of Professional Conduct can be found on the Ohio Supreme Court website at: http://www.sconet.state.oh.us/LegalResources/Rules/Prof Conduct/profConductRules.pdf 12 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 13 of 16 Case No. 19-10514 procedures meeting the standards of competent practitioners. It also requires adequate preparation.” Ohio Prof. Cond. Rule 1.1, cmt. 5 (emphasis added). Finally, if Ms. Goldberger was aware of the arrangement between Mr. Hewitt and Ms. Foster and sent Ms. Foster to a different court knowing Mr. Hewitt was ill-prepared and lacked the requisite competence to proceed on the Debtor’s case, Ms. Goldberger may also be in violation of the Rule. See Ohio Prof. Cond. Rule 5.1(c)(1) (“A lawyer shall be responsible for another lawyer’s violation of the Ohio Rules of Professional Conduct if . . . the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved. . . .) (emphasis in original). Similar to 11 U.S.C. § 504(a) discussed above, Ohio Prof. Cond. Rule 1.5(e), generally disfavors fee splitting by attorneys from different firms and allows it only under very specific circumstances. Ohio Prof. Cond. Rule 1.5(e) provides in pertinent part: Lawyers who are not in the same firm may divide fees only if all of the following apply: . . . (2) the client has given written consent after full disclosure of the identity of each lawyer, that the fees will be divided, and that the division of fees will be in proportion to the services to be performed by each lawyer or that each lawyer will assume joint responsibility for the representation. (Emphasis added.). No evidence of the client’s written consent has been provided to show that the Debtor agreed to the form of representation that has heretofore taken place. For the same reasons discussed above, Mr. Hewitt and Ms. Foster may have violated Ohio Prof. Cond. Rule 1.5(e).9 9 Even if Mr. Hewitt and Ms. Foster did not violate Rule 1.5(e), they may have violated Rule 1.6(a) which provides, in pertinent part, “A lawyer shall not reveal information relating to the representation of a client, including information protected by the attorney-client privilege under applicable law, unless the client gives informed consent. . . .” (Emphasis in original). Just as there has been no showing that the Debtor agreed to a fee splitting arrangement, there has also been no showing that the Debtor gave his informed consent, prior to the Notice, of Ms. Foster disclosing any privileged information to Mr. Hewitt. 13 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 14 of 16 Case No. 19-10514 ECF Pocedures Finally, as previously mentioned in the Preliminary Findings supra, ECF Procedure 8(c) specifically disallows the activity which Mr. Hewitt admitted to in this case, namely allowing another attorney to transmit documents under his ECF Filer credentials and electronic signature. It provides: No Filer or User may knowingly permit or cause to permit a Filer’s or User’s password to be used by anyone other than an agent specifically authorized by the Filer or User. The activities of Mr. Hewitt, Ms. Foster, Ms. Goldberger, and the Amourgis & Associates and Upright Law firms outlined in this order appear to display a blatant disregard of this procedure and the safeguards it is intended to ensure–namely, that this Court should be aware of who it is that is serving as the attorney of record and providing legal representation to the parties appearing before it. Conclusion Based on the foregoing, IT IS THEREFORE ORDERED that attorneys H. Leon Hewitt, Mary Foster, and Jessica Goldberger shall appear before the Honorable Jeffery P. Hopkins, U.S. Bankruptcy Judge, in Suite #816, Courtroom #2, Atrium Two, 221 East Fourth Street, Cincinnati, Ohio on March 31, 2020 at 10:00 am to SHOW CAUSE why sanctions should not be imposed under Rule 9011 or the Court’s inherent authority to impose sanctions against attorneys deemed to have committed infractions of the rules under 11 U.S.C. § 105. See In re Wenk, 296 B.R. 719 (Bankr. E.D. Va. 2002); In re Boyd, 143 B.R. 237 (Bankr. C.D. Ca. 1992); In re Jerrels, 133 B.R. 161, 164 (Bankr. M.D. Fla. 1991) (“reasonable inquiry includes at least an actual initial contact and conference with the client.”); In re Beinhauer, 570 B.R. 128 (Bankr. E.D.N.Y. 2017) (counsel “cannot 14 Case 1:19-bk-10514 Doc 54 Filed 02/13/20 Entered 02/13/20 11:39:47 Desc Main Document Page 15 of 16 Case No. 19-10514 absolve himself of the duty to conduct a reasonable investigation by affirmatively allowing clients to bring in only the bare minimum of information and them claiming that it is not his fault that he did not have sufficient information to review.”) (citing In re Moffett, No. 10- 71920, 2012 WL 693362, at *3 (Bankr. C.D. Ill. Mar. 2, 2012)). IT IS FURTHER ORDERED that prior to the hearing to SHOW CAUSE, Mr. Hewitt, Ms. Foster, Ms. Goldberger, and their counsel should familiarize themselves thoroughly with the cases and Bankruptcy Code provisions and Rules cited in this Order. Counsel should come fully prepared to discuss the potential violations of these authorities. In addition, not later than seven (7) days prior to the Hearing to SHOW CAUSE, the parties who are the subject of this Order or their attorneys may file any documents, pleadings, or affidavits they deem appropriate in defense of or to ameliorate the conduct described in this Order or to otherwise clarify, complete or correct the record in this case. IT IS FURTHER ORDERED that not later than seven (7) days prior to the Hearing to SHOW CAUSE, the attorneys who are the subject of this Order shall file with the Court a document certifying what corrective measures have been taken to avoid future infractions of the authorities identified in this Order. IT IS FURTHER ORDERED that the Hearing on Confirmation of the Debtor’s Chapter 13 plan shall be continued to the same date and time by separate order. Failure by the attorneys who are the subject of this Order to comply with any of its terms shall result in the imposition of further sanctions by this Court. 15 ase No. 19-10514 Jessica Goldberger Amourgis and Associates 300 E. Business Way, Ste 200 Cincinnati, OH 45241 bk_Cincinnati@amourgis.com Copies to: Default List plus additional parties Mary T Foster 8044 Montgomery Rd., Suite 700 Cincinnati, OH 45236 mtf.fosterlegal@gmail.com 16 Case 1:19-bk-10514 Doc 54 Filed 02/13/ 02/13/20 11:39:47 Desc Main Document f 16 The post Don’t let this happen to You! appeared first on Chris Wesner Law Office.

UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF OHIO EASTERN DIVISION In re: : Case No. 19-53347 : William Sijan : Chapter 7 : Debtor. : Judge Preston MEMORANDUM OPINION AND ORDER GRANTING DEBTOR’S MOTION FOR SUMMARY JUDGMENT DENYING UNITED STATES TRUSTEE’S MOTION TO DISMISS (Doc. #20) This cause came on for consideration of William Sijan’s (the “Debtor”) Motion for Summary Judgment Denying United States Trustee’s Motion to Dismiss (Doc. #20) (the “Motion for Summary Judgment”), filed on October 18, 2019; the United States Trustee’s Response to Debtor’s Motion for Summary Judgment on Issue Concerning Nature of Medical Debts (Doc. 21), filed by the United States Trustee (the “UST”) on November 1, 2019; and the Debtor’s Reply to Response of United States Trustee to Debtor’s Motion for Summary Judgment (Doc. This document has been electronically entered in the records of the United States Bankruptcy Court for the Southern District of Ohio. IT IS SO ORDERED. Dated: February 12, 2020 22), filed on November 8, 2019. The Court having considered the record and the arguments of the parties, makes the following findings and conclusions. I. Jurisdiction The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334 and Amended General Order 05-02 entered by the United States District Court for the Southern District of Ohio, referring all bankruptcy matters to this Court. This matter is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). Venue is properly before this Court pursuant to 28 U.S.C. §§ 1408 and 1409. II. Factual Background and Procedural History The facts relevant to this matter are without serious dispute and may be summarized as follows: In January 2018, the Debtor arrived at the emergency room at Broward Health Medical Center in Florida with a fever and breathing difficulty. There, he was diagnosed with severe pneumonia, and after initially refusing admission to the hospital, the medical care providers informed the Debtor that he would die within hours if not hospitalized. He agreed to be admitted to the hospital and was treated in the intensive care unit (the “ICU”) for a total of six weeks. For two weeks, he was intubated and placed on a breathing machine; he remained in the ICU for another three weeks, and then was isolated for an additional week. Following the ICU stay, the Debtor underwent physical therapy for 10-12 weeks to regain his strength so that he could attempt to return to work. As a result of the ICU stay, the Debtor was billed $300,550.99. The Debtor filed a voluntary petition for relief under Chapter 7 of the Bankruptcy Code on May 21, The schedules reflect total liabilities of $409,527.25, of which $34,193 is described as secured debt and $375,334.25 as nonpriority unsecured debt. The debts consist of 2 an automobile loan ($34,193), credit card debts (approximately $43,248.03), a tax lien ($290), business debt (approximately $6,319.25), and various medical bills (approximately $324,605.97). The medical bills make up nearly three-fourths of the total debt owed; of that, the Debtor owes $300,550.99 for emergency medical treatment. In the Voluntary Petition (Part 6, section 16), the Debtor classified his debts as primarily “medical.”1 On August 5, 2019, the UST filed its Motion of the United States Trustee to Dismiss Pursuant to 11 U.S.C. §§ 707(b)(2) or 707(b)(3) with Memorandum and Affidavit in Support Thereof (Doc. #15) (the “Motion to Dismiss”). The UST sought dismissal of this case on the basis that the Debtor’s debts are primarily consumer debts, and that a presumption of abuse arises in this case and/or the totality of the circumstances of the Debtor’s financial situation demonstrates abuse. The Debtor argued in his Objection and Response to Trustee’s Motion to Dismiss (Doc. #17) and his Motion for Summary Judgment, that 11 U.S.C. § 707(b) does not apply in this case because the majority of his total debt is not consumer debt as defined under 11 U.S.C. § 101(8), because he did not voluntarily incur the majority of his debt, the emergency medical bills. III. Standard of Review for Motions for Summary Judgment Rule 56 of the Federal Rules of Civil Procedure, made applicable to contested matters by Federal Rule of Bankruptcy Procedure 9014, provides that the Court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). The party seeking summary judgment bears the initial burden of “informing the . . . court of the basis for its 1 The Voluntary Petition (Part 6, section 16) allows debtors to describe their debts as primarily consumer, primarily business or another “type.” 3 motion, and identifying those portions of the [record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548 (1986). See also Fed. R. Civ. P. 56(c)(3). If the movant satisfies this burden, the nonmoving party must then assert that a fact is genuinely disputed and must support the assertion by citing to particular parts of the record. Fed. R. Civ. P. 56(c)(1). The mere allegation of a factual dispute is not sufficient to defeat a motion for summary judgment; to prevail, the nonmoving party must show that there exists some genuine issue of material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S. Ct. 2505 (1986). When deciding a motion for summary judgment, all justifiable inferences must be viewed in a light most favorable to the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Anderson, 477 U.S. at 255. The Sixth Circuit Court of Appeals has articulated the following standard to apply when evaluating a motion for summary judgment: [T]he moving [party] may discharge its burden by “pointing out to the . . . court . . . that there is an absence of evidence to support the nonmoving party’s case.” The nonmoving party cannot rest on its pleadings, but must identify specific facts supported by affidavits, or by depositions, answers to interrogatories, and admissions on file that show there is a genuine issue for trial. Although we must draw all inferences in favor of the nonmoving party, it must present significant and probative evidence in support of its [position]. “The mere existence of a scintilla of evidence in support of the [nonmoving party’s] position will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party].” Hall v. Tollett, 128 F.3d 418, 422 (6th Cir. 1997) (citations omitted). A material fact is one whose resolution will affect the determination of the underlying action. See Tenn. Dep’t of Mental Health & Mental Retardation v. Paul B., 88 F.3d 1466, 1472 (6th Cir. 1996). An issue is 4 genuine if a rational trier of fact could find in favor of either party on the issue. See Schaffer v. A.O. Smith Harvestore Prods., Inc., 74 F.3d 722, 727 (6th Cir. 1996). “The substantive law determines which facts are ‘material’ for summary judgment purposes.” Hanover Ins. Co. v. Am. Eng’g Co., 33 F.3d 727, 730 (6th Cir.1994). In determining whether each party has met its burden, the court must keep in mind that “[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses . . . .” Celotex, 477 U.S. at 323–24. IV. Discussion One of the primary goals of Chapter 7 relief is to offer debtors a “fresh start” through discharge “in exchange for liquidation of the debtor’s assets for the benefit of his creditors.” In re Krohn, 886 F.2d 123, 125 (6th Cir. 1989). The remedy of bankruptcy is intended to relieve honest debtors from indebtedness and provide a “fresh start.” Id. The bankruptcy system balances the goal of providing a “fresh start” with the desire to prevent abuse. In re Hardigan, 490 B.R. 437, 458 (Bankr. S.D. Ga. 2013). For this reason, the Bankruptcy Code includes provisions, such as 11 U.S.C. § 707(b), which is intended to prevent debtors from obtaining Chapter 7 shelter if they have an ability to pay their creditors, and § 727, which is intended to keep unscrupulous debtors from obtaining bankruptcy relief. In re Krohn, 886 F.2d 123, 126 (6th Cir. 1989); Wise v. Wise (In re Wise), 590 B.R. 401, 429 (Bankr. E.D. Mich. 2018) (citing Robin Singh Educ. Servs., Inc. v. McCarthy (In re McCarthy), 488 B.R. 814, 825 (B.A.P. 1st Cir. 2013)); see also H.R. REP. NO. 109-31, pt. 1, at 2 (2005) (stating that the provisions Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 were enacted to deter abuse in consumer bankruptcy filings). 5 A. Dismissal under 11 U.S.C. § 707(b) The Debtor moves for summary judgment denying the UST’s Motion to Dismiss brought under 11 U.S.C. § 707(b)(2) or (3), on the grounds that § 707(b) does not apply. Section 707(b)(1) states in pertinent part: After notice and a hearing, the court, on its own motion or on a motion by the United States trustee . . . may dismiss a case filed by an individual debtor under this chapter whose debts are primarily consumer debts . . . if it finds that the granting of relief would be an abuse of the provisions of this chapter. 11 U.S.C. § 707(b)(1) (emphasis added). A pre-trial conference was held in this matter on September 18, 2019. At the pre-trial, the parties agreed that the debts for the Debtor’s emergency medical treatment are higher than all other types of debts and are the Debtor’s primary type of debt. See In re Hlavin, 394 B.R. 441, 446-47 (Bankr. S.D. Ohio 2008) (stating that “primarily consumer debts” means the aggregate dollar amount of consumer debts exceeds 50% of the debtor’s total liabilities). Thus, the critical determination here is whether the Debtor’s emergency medical debts are considered consumer debts for purposes of 11 U.S.C. § 707(b). B. Definition of “consumer debts” under 11 U.S.C. § 101(8) The term “consumer debt” is defined as “debt incurred by an individual primarily for a personal, family, or household purpose.” 11 U.S.C. § 101(8). The Bankruptcy Code refers to “consumer debt” in various sections. See, e.g., 11 U.S.C. § 1301(a) (staying creditor actions against codebtors to collect consumer debts); 11 U.S.C. § 524(c)(6)(B) (providing that court approval is not required for reaffirmation agreements with an individual debtor not represented by an attorney, to the extent the debt is a consumer debt secured by real property). “[T]here is a 6 natural presumption that identical words used in different parts of the same act are intended to have the same meaning.” Swartz v. Strausbaugh (In re Strausbaugh), 376 B.R. 631, 636 (Bankr. S.D. Ohio 2007) (quoting Atl. Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433, 52 S.Ct. 607, 76 L.Ed. 1204 (1932)). Therefore, to determine the meaning of “consumer debt” for the purposes of applying 11 U.S.C. § 707(b), the Court may look to the use or interpretation of the term “consumer debt” in other contexts within the Code. See IRS v. Westberry (In re Westberry), 215 F.3d 589, 592 (6th Cir. 2000); Strausbaugh, 376 B.R. at 636. The term “consumer debt” must be narrowly construed. See In re White, 49 B.R. 869, 872 (Bankr. W.D.N.C. 1985) (stating that the sparse legislative history on the definition of consumer debt implies that a more narrow interpretation is favored).2 In Westberry, the 6th Circuit Court of Appeals interpreted the term “consumer debt,” as defined in 11 U.S.C. § 101(8), to require “volition.” Westberry, 215 F.3d at 591. That is, the individual must have voluntarily intended to incur the debt for a personal, family, or household purpose. See id. The court posited that debts not incurred voluntarily, such as tax liens and tort judgments, are not classified as consumer debts. Id. The court cited to Marshalek, which asserted that a civil “judgment resulting from a vehicular accident, per se, is not a ‘consumer debt’ . . . . Implicit in the Code’s definition of consumer debt is the element of volition.” In re Marshalek, 158 B.R. 704, 707 (Bankr. N.D. Ohio 1993). In Westberry, the 6th Circuit concluded that the debtor’s tax debt was not “consumer debt.” It reasoned that: (1) tax debt is “incurred” differently than consumer debt, in 2 Many cases cited herein were decided prior to passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (“BAPCPA”). Prior to BAPCPA, § 707(b) permitted the dismissal of a Chapter 7 case filed by an individual with primarily consumer debts if found that the granting of relief would be a “substantial abuse” of Chapter 7. BAPCPA reduced “substantial abuse” to “abuse,” and included a presumption of abuse when the debtor’s current monthly income exceeds the formula in § 707(b)(2). The definition of “consumer debt” remains unchanged, so these cases are still relevant. 7 that the indebtedness is involuntary; (2) tax debt, unlike consumer debt, is created for a public purpose; (3) taxes arise from income, while consumer debt arises from consumption; and (4) consumer debt normally involves the extension of credit. Westberry, 215 F.3d at 591. So, this Court must determine whether the Debtor’s emergency medical debts were voluntarily incurred within the meaning of 11 U.S.C. § 101(8) and the 6th Circuit’s interpretation of “consumer debt” in Westberry. C. The Debtor’s emergency medical debts are not consumer debts There is no doubt that most medical debts are considered consumer debts, as most are incurred voluntarily. See In re Martinez, 171 B.R. 264, 267 (Bankr. N.D. Ohio 1994) (finding that the debtors’ medical debts were consumer debts). Medical debts incurred through routine doctor’s visits and cosmetic surgery would be examples of medical debts that are consumer debts. A patient walks into a doctor’s office with a treatment plan, that is usually discussed prior to the visit, and discussions of cost and/or payment plans are tended to before treatment. Moreover, if a patient has past due bills for treatment, the doctor may turn that patient away until her payments become current. This is not so when it comes to emergency medical treatment. Emergency medical services are differentiated from ordinary medical services. Congress viewed emergency medical services differently than ordinary medical services when it enacted the Emergency Medical Treatment & Active Labor Act (“EMTALA”), which requires hospital emergency departments to provide treatment regardless of an individual’s ability to pay. 42 U.S.C. § 1395dd (2011). Similarly, the Florida legislature also enacted a law ensuring that emergency medical services and care are available to the public; section § 395.1041 of the Florida Statutes states, “[T]he provision of emergency services and care . . . [shall not] be based 8 upon, or affected by, the person’s . . . insurance status, economic status, or ability to pay for medical services . . . .” FLA. STAT. ANN. § 395.1041 (West 2017). Broward Health Medical Center was required to treat the Debtor for his pneumonia regardless of his ability to pay, as he was hours from death. The UST argues that the Debtor incurred this debt because he voluntarily consented to treatment. And, indeed he did; however, an act that leads to indebtedness may be undertaken voluntarily but the attendant debt may result involuntarily and is not the type of debt that a debtor would expect to incur in his daily affairs. In re Peterson, 524 B.R. 808, 813 (Bankr. S.D. Ind. 2015) (finding that an intentional tort judgment was not consumer debt because it arose involuntarily); In re White, 49 B.R. 869, 872 (Bankr. W.D.N.C. 1985) (stating that an automobile accident liability was not consumer debt because it occurred incidental to and not first and foremost to achieving a personal aim). As such, the Debtor’s medical debts arising from emergency medical services cannot be included in the limited class of consumer debts within the meaning of 11 U.S.C. § 101(8) that individuals willingly incur in their daily affairs. The UST also argues that medical debts are consumer debts because, by their very nature, they are incurred for a personal purpose, and suggests that civil judgments and tax liens are distinguishable from the Debtor’s medical debts. The UST’s argument is unpersuasive. The fact that this medical debt is not a civil judgment or tax lien (or even business debt) does not mean it per se fits the definition of “consumer debt.” Cf. Peterson, 524 B.R. at 812-13 (“The mere fact that the [civil] [j]udgment is not a ‘business’ debt does not mean it per se fits the definition of a ‘consumer debt.’”). Nearly all debts have some kind of personal, family, or household purpose, even those incurred with an eye for profit (an individual increases his personal wealth for the benefit of his family or household when making a profit or advancing his business), but this does 9 not make it a “consumer debt” as defined in 11 U.S.C. § 101(8). In re Stovall, 209 B.R. 849, 854 (Bankr. E.D. Va. 1997) (stating that taxes are not the only kind of liability that fall into the “interstitial” area of debts that are not consumer debts, but are also not business debts); see also In re Venegas Munoz, 73 B.R. 283, 285 (Bankr. D.P.R. 1987) (finding that professional fees are not consumer debt); In re Alvarez, 57 B.R. 65, 66 (Bankr. S.D. Fla. 1985) (finding tort liability from a car accident was not consumer debt). Although the “consumer debt” requirement of 11 U.S.C. § 707(b) was not at issue, the court in Hiller stated in passing, that it was doubtful a judgment awarded on the basis of unjust enrichment to recover the value of time and money invested to improve the debtor’s property was a consumer debt within the meaning of the Code. In re Hiller, 482 B.R. 462, 469 (Bankr. D. Mass. 2012). Likewise, the Debtor’s emergency medical debt benefitted the Debtor, but because his life was on the line, the service provided cannot be considered consumer simply because saving his life bestowed a “personal” benefit. Furthermore, the Debtor did not voluntarily incur the debt arising out of his emergency medical treatment at Broward Health Medical Center. The Debtor did not intend to have a near death experience and be subjected to six weeks of medical treatment after visiting the emergency room. This is more akin to judgment from a tort action, in which some sort of accident occurs and the debtor is found liable for the unforeseen damages. V. Conclusion For the reasons set forth above, the Court finds that there are no genuine issues of material fact and that the Debtor is entitled to judgment as a matter of law. The debt arising out of the Debtor’s emergency medical treatment at Broward Health Medical Center is not a consumer debt in nature as defined under 11 U.S.C. § 101(8), because he did not voluntarily 10 incur the debt. The Debtor’s Chapter 7 case will not be dismissed pursuant to 11U.S .C. § 707(b) because his debt is not primarily consumer debt. Accordingly, IT IS ORDERED that the Comi hereby GRANTS the Debtor’s Motion for Summary Judgment Denying United States Trustee’s Motion to Dismiss (Doc. #20). The Comt shall enter a separate final order on the Motion of the United States Trustee to Dismiss Pursuant to 11 US.C. §§ 707(b)(2) or 707(b)(3) with Memorandum and Affidavit in Support Thereof (Doc. #15) in accordance with this Memorandum Opinion and Order. IT IS SO ORDERED. Copies to: Default List # 11 The post Emergency Medical Debt NOT Consumer Debt appeared first on Chris Wesner Law Office.

A Troy, Ohio Bankruptcy Attorney Explains Regular Income for Chapter 13 Bankruptcy You’ve made the brave decision to file for bankruptcy, but you know you don’t qualify for Chapter 7. And that’s fine because Chapter 13 is going to allow you to repay your debt and still have the ability to get back on the right financial track. In order to qualify for Chapter 13, you must be able to prove you take in a steady and reliable income. Here, we’ll explain exactly what regular income is when qualifying for Chapter 13.  Chapter 13 Regular Income In the eyes of the bankruptcy court, regular income is compensation you receive for regular work performed as a salaried employee. This is generally consistent income that’s relatively the same amount per pay period. If you’re an hourly employee and you have set hours from pay period to pay period, this would also count as regular income. Child support and some government benefits may also count as regular income, but your Troy, Ohio bankruptcy attorney would be able to provide more information pertaining to your own unique situation. What is Not Considered If you own your business and your main source of income is from that business, it may be difficult to convince the court that qualifies as regular income. Certified financial statements from a CPA may help establish you make a consistent, regular income through your business. Also, if you work on a commission only basis, the court is not likely to consider that regular income. Bonuses and overtime salary are not regular income, either. For more information on Chapter 13 bankruptcy, contact us. The post Regular Income for Chapter 13 Bankruptcy appeared first on Chris Wesner Law Office.

Involuntary Chapter 7 and Chapter 11 Bankruptcies.  Our bankruptcy laws are often associated with providing relief for debtors.  However, the bankruptcy code also provides tools for creditors to compel unwilling debtors to either liquidate assets, or reorganize their debts in an effort to repay creditors.  11 U.S.C. § 303 of Bankruptcy Code establishes the procedures and circumstances necessary for creditors to file an Involuntary Bankruptcy Petition against a debtor.    Proceeding under section 303 can be a useful tool for creditors who are owed large sums of money by debtors, especially untrustworthy corporate debtors.  However, there are significant risks for the creditor petitioners who file an Involuntary Petition in bad faith.  Section 303 (i) allows the court to dismiss a case and grant judgement against the creditor petitioners in favor of the debtor for costs and reasonable attorney’s fees.  If the court finds that any of the petitioners filed the involuntary petition in bad faith, then the court can grant any damages proximately caused by the filing, i.e. compensatory damages.  The court can even grant punitive damages when the creditor petitioner’s bad faith is particularly egregious.  A worst case scenario situation can be examined with a reading of opinion of In re John Richards Homes Bldg. Co., L.L.C., 291 B.R. 727 (Bankr. E.D. Mich. 2003).  This court awarded compensatory damages of $4,100,000 and punitive damages of $2,000,000 in favor of the debtor who was wrongfully damaged by the creditors maliciously filed involuntary bankruptcy petition.  Nonetheless, if the pitfalls and risks associated with filing an involuntary petition under Section 303 are negated and overcome, eligible petitioning creditors can initiate proceedings under Section 303 by filing a petition and summons with the appropriate U.S. Bankruptcy Court.  Involuntary bankruptcy petitions can only be filed under Chapter 7 or Chapter 11 of the Bankruptcy Code.  Involuntary Bankruptcy petitions cannot be filed against farmers, non-profits; or moneyed businesses such as Banks and Credit Unions, or Insurance Companies.  At least three or more creditor petitioners must have claims that are not subject to a bona fide dispute by the debtor, whose aggregate claims against the debtor total at least $15,775.00.  Once the petition has been filed, the debtor will be given an opportunity to defend against the petition.  After holding a hearing to determine if the petitioning creditors are eligible to proceed under Section 303, the court may order the petitioning creditors to post a bond to indemnify the debtor for such amounts as the court may later allow under Section 303 (i). While there are significant risks involved in filing an Involuntary Petition under Section 303, the advantages can be tremendous.  If a petitioning creditor can fulfill the requirements of Section 303, and prove that their claims against the debtor are undisputed, total costs of litigation can be significantly less than if a creditor were to sue the debtor in state court for damages.  Therefore, if you are a creditor seeking money owned to you by a debtor with significant assets or an ability to reorganize their debt in a way that will enable you to get paid, then consider discussing your options under Section 303 with a skilled attorney. The post Involuntary 7 and 11 Bankruptcy appeared first on Chris Wesner Law Office.

    Claims for early termination of leases are very common in bankruptcy cases.  Generally costs for preparing the property for the next tenant is covered by rental deposits.  Occasionally claims are made for more substantial damage to the premises.  While most of these do not lead to adversary proceedings, a nightmare factual situation resulted in a 523(a)(6) nondischargeability judgment against a debtor in the Wisconsin case of DeWitt v Jacob (In re Jacob), Case #18-26186-beh, Adv #18-02217-beh, 2020 Bankr. LEXIS 354 (Bankr. E.D. Wis., 11 February 2020).   A detailed history of the facts gives a setting to the case.  Mr. DeWitt, the landlord, purchased a renovated home in May 2016, and lived there with two families of tenants: Mr. & Mrs. Jacob  with their two young children and two dogs; and a Ms. Suchocki with her child.  The Jacobs resided in the basement with use of the living room, bathroom, and kitchen on the first floor.  Mr. DeWitt's bedroom was also on the 1st floor.  Ms. Suchocki rented the 2nd floor bedrooms with use of the first floor common areas.  Mr. DeWitt left for a weekend in August 2016 to take care of his parent's home and dog, and remained there for a time when the Jacobs advised him there was a bedbug problem at the house.  When Mr. DeWitt attempted to have the home inspected and treated for bedbugs, the Jacobs denied access to both Mr. DeWitt and the inspectors.  He later saw Ms. Suchocki and Mrs. Jacobs in his bedroom, which they did not have permission to access, while driving by the house.  Mr. DeWitt then had the police assist him in gaining entry to the home on November 2, and found the property filled with clutter and in disarray.   He returned on November 6 with his parents to install a deadbolt lock on his bedroom door to protect his belongings.  The visit was videotaped by him.  Again police had to be called to allow admittance to the property.  Again trash was everywhere, with no clean surface in the kitchen or bathroom, and refuse scattered on the floors and other surfaces.  Widows were covered by fabric or newspapers, though no structural damage was apparent.  In the video both Mr. and Mrs. Jacobs can be heard yelling at Mr. DeWitt.  Mrs. Jacob raises a baseball bat multiple times, and attempts to deny access to anything but Mr. DeWitt's bedroom.  The deadbolt was installed, but Mr. Jacob exclaimed that he would kick the door regardless of the lock.  Both Jacobs claim that Mr. DeWitt could not remove any property from the premises because they believed it was no longer his, and threatened to 'bash his skull in' if he took any other property.  Ultimately Mr. DeWitt leaves without removing any of his personal property.  On December 6, 2016 Mr. DeWitt files an eviction action against both the Jacobs and Ms. Suchocki.  On 4 January 2017 the court ruled in favor of Mr. DeWitt and finding Mr. Jacob's testimony to not be credible, also noting the evidence could support a referral for criminal prosecution.   The Jacobs were removed from the property on 11 January 2017.  Within hours of the eviction Mr. DeWitt took control of the home and took photographs of the interior.   Trash littered the home in poles, covering the floors.  The walls were damages with holes, drawings in crayon and ash, and scorch or burn marks.  Mr. DeWitt's bedroom door had a large crack, over 12" long.  His bedframe was disassembled, and the mattress and bedding badly soiled.  His eyeglasses broken.  His desk in pieces with a portion burned in a barbecue grill on the patio.  The wall of the garage next to the grill was warped from heat damage.  His personal property was strewn about the property.  Ms. Jacob testified she had removed his clothing from his bedroom, put it in trash bags, and taken them to the garage.  Mr. DeWitt testified that the clothes in the bags were wet and bagged with broken glass and razor blades.  Some of Mr. DeWitt's items were missing, including a BlueRay disc player, an ipod, watches, sunglasses, a cell phone, and photographs and sports medals of priceless sentimental value.  Mr. DeWitt obtained a default civil judgment against the the Jacobs and Ms. Suchocki of  $41,525 on 10 July 2017.   The Jacobs filed for relief under chapter 7 on 22 June 2018.  Mr. DeWitt then filed an adversary seeking to declare $15,000 of the judgment as nondischargeable pursuant to §523(a)(6).  The bankruptcy court noted that the plaintiff in a §523(a)(6) action has the burden of proof to show by a preponderance of the evidence that the claim is nondischargeable, ie that it is more likely than not that the debt meets the elements of §523(a)(6).  This subsection requires 1) an injury caused by the debtor 2) willfully, and 3) maliciously.    As applied to tenant damage to premises, damage by caused by dogs, children, or friends can result in a §523(a)(6) judgment if there is a showing that the debtor encouraged the actions.1     Mere failure to maintain the rental property does not give rise to a nondischargeability claim.2   Here the court examined each item of damage in turn to see if it met the requirements for §523(a)(6).  As to the crack in Mr. DeWitt's bedroom door, the court rejected Mr. Jacob's testimony that it must have come from installing the deadbolt, finding the more likely scenario is that he carried out his threat to break into to the room.  The $745.50 damage related to this was found to be nondischargeable.  As to the bags of clothing packed with razor blades and broken glass, given Ms. Jacob's testimony that she removed the clothing from Mr. DeWitt's bedroom, the Court found that packing his clothing in this dangerous manner is willful and malicious.  Given Mr. DeWitt's testimony that he ultimately had to dispose of the clothing because they were heavily soiled and foul-smelling, the court allowed $2,047.49 as nondischargeable based on calculations of replacement cost provided by Mr. DeWitt.  The court also found that $1,196.52 was nondischargeable for damage to the desk and warped siding.  Breaking and burning the desk is not an accidental occurrence, and cannot be done by mere negligence.  Rather it is a hostile reaction to a relationship that had completely deteriorated.  The court did not find in favor of Mr. DeWitt as to the damages for clean-up and restoration of the house and yard.   The disarray in the house from the November and January videos look about the same, and suggest that the tenants never learned how to keep house, and fall between the lines of crudeness and gross negligence, but not up to that of willful and malicious injury.   Nor did the court rule for Mr. DeWitt as to the bedbug inspections and treatment, given the lack of evidence that the Jacobs willfully or malicously invited the bedbugs into the home.   Finally, Mr. DeWitt did not establish that it was the Jacobs rather than Ms. Suchocki that were the cause of the loss of his personal property such as the Blu-Ray plyer, inhaler, and decorative items. The court found that $3,989.51 of the state court judgment was nondischargeable under 11 U.S.C. 523(a)(6).1  O'Brien v. Sintobin (In re Sintobin), 253 B.R. 826, 830 (Bankr. N.D. Ohio 2000). ↩2  In re Merkman, 604 B.R. 122, 130 (Bankr. D. Conn. 2019)(collecting cases)↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://tampabankruptcy.com

Debt Consolidation: Is It Right for You? We all carry a little debt from time to time (or all the time). But at times, our debt becomes unmanageable. Either we weren’t careful with our finances and those balances creeped up on us until we were struggling to pay them all every month, or we run into an obstacle that throws everything into chaos, such as unexpectedly losing a job, getting a divorce, or becoming seriously ill. Fortunately, there are options for getting debt relief, depending on your particular circumstances. It’s important for you to learn about all your options, including meeting with a bankruptcy attorney, to determine whether debt consolidation is right for you. Here are some questions you’ll need to consider: How Much Do You Owe? Do you have two credit cards that have about $1,000 on them together? You likely don’t need to pursue debt consolidation. You can continue paying those off as you are. However, if you want to get your costs down as much as possible, you can apply for a balance transfer, which could have a zero percent interest rate for up to a year or more. Do you have multiple credit cards that have tens of thousands of debt on them? You likely need to look at debt consolidation. You may be able to get a personal or home equity loan, but bankruptcy may be the better option. Talking to a bankruptcy lawyer will help you know how to get the maximum debt relief. How Much Can You Pay? Maybe you have only a few thousand dollars in debt. However, maybe you also recently lost your job and aren’t able to find another. Now you’re living on unemployment compensation that doesn’t even cover your basic living expenses or you have no income at all. Debt consolidation may be necessary to keep yourself out of trouble with your creditors that will only make your situation worse. If you have a good job but you’re just struggling to pay your debts, you may be a good candidate for debt consolidation. Chapter 13 bankruptcy around Mesa can put you on a more affordable repayment plan that will end in just three to five years, and it can discharge some debt at the end of that period. What is Your Credit Score? You may not have many options for debt consolidation if your credit score has already started taking the plunge. Traditional debt consolidation options include applying for a credit card balance transfer, taking out a personal loan or home equity loan, or getting a specialty debt consolidation loan. All of these will lower the amount you pay on your debt (by lowering your interest rate and fees), but all of these require you to have a good credit score to be approved. You can file for bankruptcy no matter what your credit score is. If you qualify, you can file for Chapter 7 bankruptcy in Mesa and get a total liquidation of your unsecured debts, such as credit cards and medical bills. If you can’t qualify for Chapter 7, you can likely apply for Chapter 13 bankruptcy, which will put you on an affordable repayment plan for your debt. Do You Have Any Assets? If your credit is terrible, you may still be able to get a loan to consolidate your debt if you have some collateral, such as a home, a car (that you own, not finance), or some other valuable item. However, you put that item at risk if you end up defaulting on the loan. If you file for bankruptcy in Mesa, you can keep these assets if they do not exceed the exemption limitations. Therefore, if you don’t have much equity built up in your home, for example, you won’t need to worry about the house being sold to satisfy your creditors. You can get debt relief while also keeping those assets. You have options to help you get your debt under control, but you really need to understand the pros and cons as they apply to your situation to know what options are right for you. Talk to a financial counselor and a bankruptcy attorney to get tailored advice about what solutions will work best for your circumstances and your goals. My AZ Lawyers is ready to help if you are thinking of filing for bankruptcy in Mesa, Glendale, Tucson, or Phoenix. We will carefully review your finances to help you understand how bankruptcy may be able to help you. We’ll also explain whether you would get the most benefits from filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy. Our goal is to get you the maximum debt relief possible while experiencing the fewest adverse effects. Call us today to learn more! My AZ Lawyers Mesa Location: 1731 West Baseline Rd., Suite #100 Mesa, AZ 85202 Office: (480) 448-9800 Glendale Location: 20325 N 51st Avenue Suite #134, Building 5 Glendale, AZ 85308 Office: (602) 509-0955 Tucson Location: 2 East Congress St., Suite #900-6A Tucson, AZ 85701 Office: (520) 441-1450 Avondale Location: 12725 W. Indian School Rd., Ste E, #101 Avondale, AZ 8539 The post Debt Consolidation Is It Right for You appeared first on My AZ Lawyers.

By: Andrew KeshnerFrom: Marketwatchhttps://www.marketwatch.com/story/wiping-out-the-nations-student-loan-debt-could-have-unintended-financial-consequences-for-borrowers-2020-02-12

By: Annie NovaFrom: cnbc.comhttps://www.cnbc.com/2020/02/12/student-loan-borrowers-announce-a-strike-refusing-to-pay-their-debts.htm

The Best Way to Use a Credit Card? Treat It Like Cash from New York Times February 12, 2020Fewer people than ever carry cash these days, it seems. Life can seem ultraconvenient when you don’t have to worry about a wad of bills in your pocket (or even a wallet in your pocket, for that matter).But it can hurt people with low incomes when businesses go cashless, it can hurt workers who rely on cash tips and — even if you’re not in either of these groups — it can hurt you because it’s easy to get into financial trouble with credit cards.Studies prove that people spend more when using credit vs. cash, and late payments are on the rise.“You have an out-of-sight, out-of-mind phenomenon with credit cards,” said Amy Bucher, the director of behavior change design at Mad*Pow, a design consultancy group. “Unless they’re checking their credit card balance on a daily basis, most people don’t have an awareness of how much debt they’re in.”But if used responsibly, credit cards are a fast way to build credit without paying a dime of interest. Good credit scores can save you money down the road, typically qualifying you for lower mortgage or auto loan interest rates. Credit card rewards can make things you buy a little cheaper.The good news: Mental tricks, apps and tools can make spending with credit cards similar to cash, giving you the best of both worlds.Editorial note: The assessments of financial products in this article are independently determined by Wirecutter, a New York Times company that reviews and recommends products, and have not been reviewed, approved or otherwise endorsed by any third party.Make credit card purchases feel tactileCash requires you to shop at a physical store, grab your physical wallet and hand over physical money. Giving a cashier a $20 bill in exchange for an $18 item is a tangible transaction. In exchange for a $20, you now have $2 left and a physical bauble.But a credit card looks the same before and after the transaction, obfuscating what was actually given up for that bauble. Add online shopping to the mix, and you might not even think about your credit card or where the money is coming from.Grab a receipt. Beverly Harzog, a credit card expert and consumer finance analyst for U.S. News & World Report, always takes a receipt. “It’s just one more thing to help you keep a grip on reality,” she said. “When they ask if you want a receipt, just say yes so you have that feeling of payment in your hand.”Editors’ PicksWho Needs a Caribbean Yacht When You Can Take the Ferry?52 Places to Go in 2020The Scenic Isle Where the World’s Chaos Comes Home to RoostRemove payment information from your computer. Consumer psychologists refer to creating friction — meaning barriers to doing something — as an effective way to stop an impulse buy. “If you’re sitting on your couch, you’ve had two glasses of wine, you see rain boots on sale, and your credit card information auto-populates, you’re probably going to buy it, because you really only needed to hit two buttons to make that purchase,” Ms. Bucher said. “If you had to get off your couch, pull out your credit card and type in the numbers, that’s friction. You have to commit a little more to make the purchase.” In contrast, digital payments like Apple Pay offer convenience when you’re at the cash register, but they take cash and physical cards out of the equation. If you’re nervous that holding your phone next to the scanner to complete a transaction could turn you into a spendthrift, don’t partake.[Like what you’re reading? Sign up here for the Smarter Living newsletter to get stories like this (and much more!) delivered straight to your inbox every Monday morning.]Set spending limitsYou can’t buy $300 headphones if your wallet contains only $100. But you can if you’ve got a card with a credit limit over $300 (even if $300 exceeds your budget).Let robots count your money. Budgeting apps like You Need a Budget ($84 a year) or Mint (no fee) track balances across all your accounts, giving you a clearer picture of your actual balance even if you have multiple cards and accounts from different banks. Some banks, such as Bank of America, also let you sync other accounts, even if those accounts are with competing banks. Check your balance in the app to ensure your next purchase fits your budget.Try “action planning.” Determine your budget, then implement measures that prevent you from exceeding it. The Uber Credit Card has a feature that lets you create a self-imposed spending limit for certain categories or merchants, which could remove the temptation to stop at Starbucks on the way to work. Other companies, like Discover, allow you to set up alerts if your credit card balance exceeds a certain amount or you near your credit limit.