In the last case on this blog the court declined to award emotional distress damages, finding inadequate support in the record for them.   Emotional distress damages were awarded, and the award sustained on appeal in Hunsaker v United States, 2019 U.S. Dist. LEXIS 104433, Case #6:16-cv-00386-MC (S.D. Or., 20 June 2019).   Here the court awarded sanctions under 11 U.S.C. 362(k) against the IRS for repeated violations of the automatic stay.  The Hunsakers had filed for relief under chapter 13 on 5 November 2012.  The IRS sent four notices demanding payment of back taxes started 2 December 2013 titled Final Notice and Notice of Intent to Levy.   After each notice counsel for the Debtors notified the IRS.  The 9th Circuit had previously determined that the claim was not barred by Sovereign Immunity.1  In order to receive an award of emotional distress damages the plaintiff must (1) suffer significant harm; (2) clearly establish the significant harm, and (3) demonstrate a causal connection between that significant harm and the violation of the automatic stay (as distinct, for instance, from the anxiety and pressures inherent in the bankruptcy process).2  There is no requirement that the violation be egregious or that there be corroborating evidence, if the circumstances make it obvious that a reasonable person would suffer significant emotional harm.3  The trial court found that the evidence showed the IRS sent the notices, two of which threatened to levy Mr. Hunsacker's social security benefits, and another threatening to levy the state tax refund.  The notices continued after notice from Debtors' counsel.  The court found that the Debtors reasonably believed that if the IRS took the actions threatened, it would jeopardize their chapter 13.  Such finding is supported by Mr. Hunsacker's testimony that he was 'quite shoked' upon receiving the notice, and his belief that the IRS could take the actions threatened.   Further, the evidence supported the credible and significant emotional harm.  Mrs. Hunsacker testified that she experienced day-long migraine headaches, stiffening of her neck, appetite loss, and added anxiety and frustration.  Mr. Hunsacker experiences loss of appetite and extra stress over his wife's harm.  They both feared loss of the social security benefits on top of the loss of income causing the initial bankruptcy filing, rendering their plan unfeasible.  The Bankruptcy Court reduced the request for $4,000 emotional distress damages to $4,000 for both of them.  The District Court found the lower court had applied the correct legal rule and that it's findings were supported by the record, and affirmed the decision.1 Hunsaker v United States, 902 F.3d 963 (9th Cir. 2018) (finding that 11 U.S.C. §106(a) unambiguously waived sovereign immunity for emotional distress damages under 11 U.S.C. 362(k)↩2 In re Dawson, 390 F.3d 1139, 1149 (9th Cir. 2004).↩3 Id. at 1150↩Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703813 870-3100https://hillsboroughbankruptcy.com

“PERSONAL BANKRUPTCY IN 2019” OUTLINE FOR PRESENTATION AT WORLD WIDE LAND TRANSFER122 EAST 42ND STREET, SUITE 620NEW YORK, NY 10168PHONE: (212) 541-6224FAX: (646) 218-4600E-MAIL: JSHENWICK@GMAIL.COM The goal of this presentation is to discuss issues and the law regarding filing for personalbankruptcy in NYS in 2019.1. The process begins with the client preparing three pieces of information:1. A list of assets or property that they own,2. A list of liabilities or who they owe money to and3. An after-tax monthly budget.-With this information and a 45 minute to one-hour consultation with the client, a determination can be made if the client should file for bankruptcy or not, what remedies are available to the client outside of bankruptcy under NYS law and what type of bankruptcy would most help the client.-What is the goal of personal bankruptcy? To allow the client to keep as much property as possible and to discharge (legally wipe out) as much debt as possible or obtain “the fresh start” for the client.2. Types of Personal Bankruptcy.  There are three (3) types of personal bankruptcy:chapter 11, chapter 13 and chapter 7-Chapter 11 is most commonly used to reorganize businesses but is sometimes used by high net worth individuals who have too much debt to qualify for chapter 13.  It is a very expensive process.-Chapter 7 is known as a liquidation and “fresh start.” If you only have credit card debt and exempt assets, you would file a chapter 7 bankruptcy.  You can only file for chapter 7 bankruptcy once every eight years.--Approximately 90 to 95% of our clients file chapter 7 bankruptcy.-Chapter 13 is known as a “wage earner reorganization”–it is a blend of chapter 7 and chapter 11. If you had a house or a car that you wanted to keep, then you would file a chapter 13 bankruptcy.  If your debts were discharged in a prior Chapter 13 case, you cannot receive a discharge in a subsequent Chapter 13 unless it is filed at least two years after the date the first case was filed.3. Median Income and Means Test.  Effective May 1, 2019, if a single person in New York State has income in excess of $55,333, then they fail the Median Income Test and they must take the “Means Test” to determine whether they qualify to file for chapter 7 bankruptcy (liquidation of debts). For a family of two, the income threshold for the Median Income Test is $71,343, for a family of three it is $83,887 and for a family of four it is $102,384. Add $9,000 for each individual in excess of four. -To perform the Median Income Test, you need to determine your gross monthly income for the last six months, subtract Social Security and Victims of Terror payments, divide this figure by six and multiply the result by 12. This figure is your annualized current monthly income (CMI). Compare your annualized CMI to the applicable Median Family Income as provided above. If you fail the Median Income Test provided above, then you must take the “Means Test.”-The “Means Test” is an extremely complex test consisting of six pages of calculations! In its simplest form, you take your gross monthly income and subtract certain expenses based on the IRS National Standards, Local Standards and other actual expenses to calculate your monthly disposable income.-This is one of the most complex calculations under the law; it is very difficult to do without a computer program and it is a six to eight-page calculation!-If the majority of a Debtor’s debts are “business debts,” then they do not need to take the Means test, even if their income exceeds the Median Income for their state and family size.4. Chapter 13.  There are several requirements to file a chapter 13 bankruptcy-(a) $419,275 or less of unsecured debt; and (ii) $1,257,850 or less of secured debt; (iii) you most devote all of your disposable income (income after taxes and other living expenses) to the plan; (iv) the plan may range from three (3) to five (5) years; (v) your creditors must get $1 more that they would get in a chapter 7 filing (liquidation analysis and best interest of creditors test); and (vi) as a general rule, if you have a lot of equity in your property and not a lot of disposable income. then it is not possible to confirm a chapter 13 plan.-The Debtor’s attorney must do a liquidation analysis and determine how much the Debtor must pay each month to fund the plan-The Chapter 13 Bankruptcy Trustee receives a 10% commission on each plan payment.5. Exemptions-Debtor may choose NYS or Federal Exemptions. Exemptions are calculated at the time a Debtor files a Bankruptcy Petition with the Bankruptcy Court.-NYS law determines what property is exempt from creditors and what property is not exempt.  Non–exempt property can be reached by your creditors and exempt property can be kept after the discharge. -Common exemptions include up to $1,150 for jewelry, a watch and art;-$1,150 in personal property, bank account or cash (if no homestead exemption is taken); $3,400 for tools of trade, necessary working tools and implements necessary for profession or calling; and-$170,825 of equity for a homestead (or $341,650 in equity for joint debtors).However, debtors can also choose to use a federal exemption scheme instead of the NYS exemption scheme.  We sometimes advise debtors to use the federal exemption scheme when they do not own real estate and have other assets that they need to protect, since the federal “wildcard” exemption can exempt up to $1,325 plus up to $12,575 of any unused federal homestead exemption, for a total of $13,900. 6. Automatic Stay.  When a bankruptcy petition is filed, the automatic stay pursuant to § 362 of the Bankruptcy Code comes into effect-and no creditors can sue you, garnish your wages or restrain your checking or savings account.7. Bankruptcy Trustee.  When a bankruptcy petition is filed, a trustee is appointed to administer the estate, and his or her job is to liquidate the non–exempt assets; most chapter 7 cases are no asset cases.  There are chapter 7 and chapter 13 Trustees. In a chapter 13 case, the trustee will review the plan and related documents and make a recommendation as to whether the plan should be confirmed. If the plan is confirmed, he or she collects the debtor’s payments into the plan and distributes them to creditors.8. Benefits of Bankruptcy. (A) Discharge-the goal of a chapter 7 filing is to get a discharge, which means that all the dischargeable debts listed in the bankruptcy petition are wiped out-it is important to list all creditors on the petition with the correct addresses; and (B) It may improve a person’s creditworthiness. Certain debts such as recent taxes, student loans, fraud and drunk driving awards are non-dischargeable. See section 727 and 523 of the Bankruptcy Code.9. Property of the Estate-(1) tax refunds, (2) causes of action where Debtor is the plaintiff (such as a personal injury lawsuit); and (3) inheritances within 180 days of the filing are subject to the reach of your creditors. -Under the NYS exemption scheme, a personal injury payment up to $8,550 for bodily injury, not including pain and suffering or compensation for actual pecuniary loss, is exempt from the Debtor’s bankruptcy estate.10. Taxes-as a general rule “old” “income taxes” can be discharged. Trust fund taxes such as sales taxes and the employee’s portion of employment taxes (FICA/FUTA) are non-dischargeable.The following conditions all need to be met for taxes to be dischargeable in bankruptcy:(a) The tax year in question is more than three years prior to filing the bankruptcy (counted from last date the return is due for that year, including extensions);(b) The tax in question has been assessed more than 240 days prior to the filing the bankruptcy;(c) The tax return for the year in question was filed at least more than two years prior to the bankruptcy filing (substitute returns don’t count);(d) The tax return was non-fraudulent and there is no showing of willful evasion of payment of a lawful tax; and (e) The claim is unsecured: if secured, the tax is discharged as to the debtor personally (in personam liability) but the lien is still valid as to any property it has attached to (in rem liability).-To discharge taxes client will need to obtain a tax transcript from IRS, which lists the nature of taxes owed and year for which taxes are due11. Student Loans-In the 2nd Circuit and many other circuit courts of appeal, courts follow the Brunner “undue hardship” test (based on Brunner v. New York State Higher Education Services Corp., 831 F.2d 395 (2nd Cir. 1987)), which requires a three part finding for a student loan to be dischargeable in bankruptcy: (1) that the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans.-Recently many judges, law professors and bankruptcy practitioners have started advocating for a more liberal test to discharge student loans other than the Brunner test.12. Exception to discharge under § 523(a)(2)(C)–purchase of more than $725 in luxury goods or services in 90 days prior to filing or cash advances aggregating more than $1,000 in the 70 days prior to filing.13. Other exceptions to discharge under § 523-intentional torts, fraud, defalcation and alimony, maintenance and support for a spouse or child in connection with a separation agreement or divorce decree. 14. Negatives of a chapter 7 Bankruptcy Filing-chapter 7 can only be filed once every eight years and a filing will stay on a credit report for 10 years.15. Reaffirmation Agreement-if you want to retain an asset and money is owed to a creditor with respect to that property, you can file a form with the Bankruptcy Court and reaffirm the debt-which means that you agree to repay the debt as if you had not filed for bankruptcy. The Bankruptcy Judge will review the Reaffirmation Agreement to determine if the Debtor needs to retain or keep that asset (is there a business reason for the reaffirmation?). Example reaffirming a car lease or a car loan for a car that the Debtor needs for business reasons.-You can keep a credit card with a zero balance.16. Credit Rehabilitation-Earn as much as you can, save as much as you can, get a securitized credit card, charge on it, pay it down and then get the credit limit increased.17. Adversary Proceeding-an action in your bankruptcy case by your creditors objecting to your discharge with respect to a debt-potential grounds include fraud, false financial statements or constructive fraud-when was last time the debtor took a cash advance or purchased luxury goods or services?18. Fraudulent Conveyances and Preferences. -A fraudulent conveyance is where you transfer property to a third party without fair consideration, and the statute of limitations under NYS law is six years. -A preference is where one creditor is preferred over another similar creditor, and the key time periods are 90 days (for general creditors) and one year (for creditors that are “insiders” of the debtor-individuals or entities with close relationships to the debtor). 19. Fees and Getting Started-The filing fee for a chapter 7 bankruptcy is $335 and the filing fee for a chapter 13 bankruptcy is $310.20. The Process:-When a potential client contacts us, we schedule an hour-long meeting and ask for the following documents to be brought to the meeting: (1) a list of assets; (2) a list of liabilities; and (3) an after–tax monthly budget. -At the meeting, we review the documents and discuss their finances, debtor and creditor law and pre–bankruptcy planning.  Our goal in a chapter 7 filing is to discharge as much debt as possible (giving the client a “fresh start”) and exempting as many assets as possible from the bankruptcy estate that’s created when their petition is filed.-When the client retains us, we send him or her a link to enter the financial data we need to prepare the bankruptcy petition and information about the mandatory credit counseling course. -We draft the petition, review and review it with the client, and finally electronically file the petition and pay the filing fee.-Shortly after the petition is filed, we receive notice of the § 341 meeting of creditors-We attend the meeting with the client (who must bring an original Social Security card and a current photo ID) to the 341 meeting. -Before the meeting, we prepare the client on how to dress and questions that he or she can expect from the chapter 7 bankruptcy trustee. -Creditors may also attend the meeting and have 60 days from the date of the meeting to object to a discharge of their claim in bankruptcy or the debtor’s discharge.  Our goal is to have the chapter 7 trustee close the case at the end of the meeting, which happens in about 90% of our cases.  Within 60 days after the meeting, the debtor needs to take a post–bankruptcy debtor education course.The process usually takes about two to six months from start to finish.Other Bankruptcy Filing Requirements:1. Have you filed for bankruptcy in the past?  As stated above, a chapter 7 debtor can only file another chapter 7 case eight years after a prior chapter 7 case was filed and if your debts were discharged in a prior Chapter 13 case, you cannot receive a discharge in a subsequent Chapter 13 unless it is filed at least two years after the date the first case was filed.  However, the issue of multiple filings is complex depending on chapters filed and sequencing, so each situation needs to be reviewed individually.2. Have you resided in the district for the last 730 days? Documents Needed:i. Valid NYS Driver’s License or Photo ID with current addressii. Original Social Security Cardiii. Tax Return (last year federal, but bankruptcy trustee may request additional returns)iv. Real Estate-if you own real estate, you need a recent appraisal for the real estate and mortgage statement showing the mortgage balance.v. Last 60 days of pay stubs or payment advices JHS

  A creditor secured by a car that was surrendered on conversion of a case from chapter 13 to chapter 7 came before the court in In re Deemer, 2019 Bankr. LEXIS 1840, case #14-12353-BPC (Bankr. M.D. Ala. 17 June 2019).  Here the secured secured claim was initially valued and scheduled to be paid in a chapter 13 to Santander, but debtor converted the case in August 2017 and noticed the intent to surrender the then-inoperable vehicle.  The claim was owned by NCEP, LLC at the time of conversion.   The discharge was entered on 28 November 2018.  When neither Santander nor NCEP repossessed the car, the court reopened the case on 29 November 2018, and debtor filed a motion for contempt and sanctions.  Following the filing of the request for contempt Debtor received the title to the vehicle from  NCEP on about 14 December 2018.  The Court held the hearing on the motion on 17 January 2019, with additional briefs due in February.  Debtor asserted that NCEP's actions violated the discharge injunction of 11 U.S.C. 524(a) by effectively coercing debtor to remit money in payment of an objection on which the personal liability had been eliminated.  §524(a) provides that (a) A discharge in a case under this title -(2) operates as an injunction against the commencement or continuation of an action, the employment of process, or an act, to collect, recover or offset any such debt as a personal liability of the debtor, whether or not discharge of such debt is waived; ....11 U.S.C. 524(a)(2).    In Taggert v. Lorenzen, 139 S.Ct. 1795, 204 L.Ed.2d 129, 2019 WL 2331303 *2 (2019) the court held that civil contempt was appropriate against a creditor where there is no objectively reasonable basis for concluding that the creditor's conduct may be lawful under the discharge order.  The query is whether the objective effect of a creditor's action is to pressure a debtor to repay a discharged debt.    Support for sanctioning creditors in this situation can be found in the 1st Circuit's decision in In re Pratt, 426 F.3d 14 (1st Cir. 2006) sanctioning a creditor for failing to release the title to the vehicle without full payment of the debt after determining that the vehicle was not worth repossessing.  State law in that case prevented a debtor from junking a vehicle absent a title.  The Deemer facts are similar, with the debtor testifying that she contacted NCEP repeatedly to repossess the vehicle, and was told on at least one occasion that it would release the title for payment of $750.  The Court determined that NCEP's failure to either repossess the vehicle or release the lien was objectively coercive, and therefore violated the discharge injunction.  The delay caused by NCEP along with its request for $750 effectively eliminated Debtor's surrender option, and forced Debtor to retain possession of an inoperable vehicle.  The Court found that NCEP purged itself of contempt upon sending the title to the Debtor in December 2018, but that this did not relieve it of damages for the prior violation.    The debtor requested compensatory and punitive damages.  The court rejected the request for storage fees requested, when there was no evidence that the debtor actually incurred any out of pocket expenses for the storage of the vehicle.  Debtor's counsel failed to elicit testimony from the debtor for her hourly rate and hours missed from work by the debtor for attendance at the hearing, though it appears had such testimony been provided it would have been amenable to awarding such damages.    The court also rejected the requested emotional distress damages for having to 'go around' the vehicle to get into the garage and embarrassment by the vehicle being in her yard, but without medical evidence or other additional testimony to support the claim it failed to meet the requirements that (1) the debtor suffered significant emotional distress, (2) the evidence clearly establishes the significant emotional distress, and (3) the evidence demonstrates a causal connection between that significant emotional distress and the violation of the discharge injunction.1  The Court granted the request for $1,917.50 in attorneys fees and costs despite failure to provide a breakdown of the time expended.  The Court found the hourly rate of $325/hour to be reasonable and computed 5.9 hours spent in prosecuting the contempt motion, and the figures were not disputed by NCEP.  The Debtor had sought $8,320 in punitive damages against NCEP, based on an arbitrary figure of $20/day multiplied by the 416 days required to get the title.  The standard required for an award of punitive damages is 1) whether the award directly serves the complainant rather than the public interest, and 2) whether the contemnor may control the extent of the award.2  As NCEP had already purged itself of contempt by releasing the title, any sanction would be punitive rather than coercive.  As NCEP mailed the title to the Debtor about 11 days after the contempt motion was filed, the Court refrained from imposing punitive damages on the creditor.1 In re McLean, 794 F.3d 1313, 1325-26 (11th Cir. 2015)↩2  In re McLean, 794 F.3d at 1323 ↩ Michael BarnettMichael Barnett, PA506 N Armenia Ave.Tampa, FL 33609-1703www.hillsboroughbankruptcy.com

According to a recent Business Insider article many  bankruptcies are being driven by student loan debt.  See the link below. Jim Shenwickhttps://www.businessinsider.com/people-filing-for-personal-bankruptcy-carry-student-loan-debt-2019-6

To view an interesting article about proposed City council actions to overhaul the taxi medallion industry please see NY Post article below. Jim ShenwickNew York Post Article on City Council Proposed Overhaul of Taxi Medallion Industry

An excellent article on student loans and bankruptcy. Please review below. Jim ShenwickStudent Loans in Bankruptcy: What’s on the Horizon?

Taxi Drivers to get 10 Million Dollar Break and Lone Safeguards, reported by New York Times on June 12, 2019-IS THIS RELIEF TOO LITTLE TOO LATE!------------------The New York Times reported on June 12th 2019, that's facing ruin, taxi drivers to get 10 million dollar break and lone safeguards.While 10 million dollars sounds like a lot of money, in this author's opinion, that 10 million dollar break & loan safeguard will have little impact or benefit to the average Taxi Medallion owner, who owns an “under water” taxi medallion.The article further stated that Mayor Bill de Blasio announced a separate set of initiatives: The city is eliminating as much as $10 million in fees to taxi medallion owners, and drivers will be able to obtain financial counseling from a new “driver assistance center.”The mayor said that he would extend the city moratorium onapproving additional vehicles from ride-hailing services such as Uber and Lyft for another year.The fee waiver would aid all owners of the city’s 13,500 taximedallions, including large fleets, which operate about half of cabs. It would exempt them from paying $1,100 renewal fees due this year or next.While any waiver of fees would be appreciated by the beleaguered taxi medallion owners, it is this authors opinion that the waiver of $1,100 renewal fees for this year and next year is a drop in the bucket compared to the financial problems facing under water taxi medallion owners.It is this author's experience, that the average taxi medallion ownerowes approximately $500,00 to $600,000 in loans, on a medallionthat is now worth approximately $165,000, based on the latest TL Cdata, so the savings of $1,100 in renewal fees will have little to nofinancial impact on the troubled taxi medallion owner.Additionally, the ability to obtain financial counseling from a newdriver Assistance Center, while admirable is too little and too late formost taxi medallion owners, who owned under water taxi medallions.Moreover, extending the city moratorium on proving additionalvehicles for ride-hailing services has not helped increase the value of existing taxi medallions. Taxi medallions are either continuing to fall or have stabilized at an extremely low price, so the city moratorium has had and will have little impact in increasing taxi medallion values and will provide little relief to taxi medallion owners.These benefits, while providing good PR for the Mayor and goodsound bites will have little impact on under water taxi medallionowners-too little, too late! Jim Shenwick

15 Things You Should Know About a 341 Meeting of Creditors [2019] The Meeting of Creditors is an important step in the bankruptcy process.  It is a meeting that is Federally mandated by the U.S. Bankruptcy Rules and It is also one of the most misunderstood. This post is meant to clarify what a 341 Meeting is, what takes place at the 341 Meeting and to dispel a lot of common misconceptions about how they work. Judging by the questions people ask about 341 meetings, people seem to think they’re going to be very scary and intimidating. As long as you’re going in with a trusted bankruptcy lawyer on your side, there is no reason to be nervous. Here are fifteen things you should know to be comfortable with your 341 meeting for Chapter 7 Bankruptcy cases. 1. You Won’t Be Harassed or Humiliated at a Meeting of Creditors. A 341 meeting means you might have to sit down at a conference table with the Trustee.  Occasionally, meaning in less than one of every thirty cases, there will be a lawyer representing the companies, banks or creditors that you owe money to. This can sound scary, and many people are worried that these people will try to harass them or intimidate them. They won’t. That’s not what a 341 meeting is about. The meeting is a formality to get your bankruptcy case moving along, and the only questions asked will be about your financial assets, to determine if everything has been prepared properly and to make sure that all of your assets have been properly disclosed and listed in your bankruptcy.  The Trustee can also ask about your monthly income as well as your monthly living expenses to determine if you have sufficient monies left over every month to pay towards your debts and should have filed for a Chapter 13 Bankruptcy instead. You don’t need to worry about the meeting beforehand and you don’t need to take Maalox or Mylanta to put your stomach at ease the night before the meeting. 2. You Must Attend the 341 Meeting of Creditors. You have to attend a meeting of creditors to move your bankruptcy forward. This meeting is mandatory.  If you miss it, even if you have everything else in order, there is a very good chance your trustee will move to dismiss your bankruptcy case. The 341 meeting isn’t stressful or long. Many times creditors don’t even show up. Unless you did something that looks suspicious, like running up debts right before filing or suddenly selling valuable property, the whole question and answer session could be over in 15 minutes or less. Many times after the meeting is concluded people will comment – you mean that’s it.  All of my worrying was about that. The Trustee has probably held hundreds, if not thousands of these meetings.  He or she can usually get a good feeling in a matter of minutes if there any any issues with your Bankruptcy filing by looking at your Bankruptcy Petition and listening to your answers. 3. You Will Be Asked to Verify Your Identity. Many people share all or most of their name with others. Census data shows there are over 30,000 living examples for the top four most common combinations; John Smith, Robert Smith, Michael Smith, and Maria Garcia. Bankruptcy will create a legal record, and it is very important that the names be accurate and correct on all paperwork. To do this, your trustee will check your ID against the papers in your bankruptcy case to make sure everything matches exactly including your social security number. To proceed with bankruptcy you will also need a Social Security number or an Individual Taxpayer Identification Number from the IRS.  The trustee wants to make sure that the correct social security number is listed. Otherwise, if a wrong social security number is listed, it will connect to another person. Valid forms of ID for the Trustee at a 341 Meeting of Creditors include:   Driver’s License    State Photo ID    U.S. Passport    Armed Forces ID    DoD ID    Resident Alien Card   Social Security card as proof of social security number   Original w-2 as proof of your correct social security number 4. Chances Are None of your Creditors Will Be There. The U.S. Bankruptcy Court Clerk’s office will send a notice of the scheduling of the meeting to all of your creditors. The meeting of creditors is scheduled by the office of the clerk. The notices come from everyone of the creditors listed in your bankruptcy documents.  The creditors are given the opportunity to attend and ask any valid questions they may have. However, most will not attend. Unless you are trying to discharge a high-value debt, did something apparently fraudulent, or they plan to file a motion challenging your filing you generally should not expect a problem from your creditors. For most consumer bankruptcies, it does not make financial sense for a company to send their attorney to sit and watch you answer questions. It’s totally possible that no creditors might come, and it will just be you, your lawyer, and the bankruptcy trustee at a conference table. 5. The 341 Meeting is Not a Court Hearing. A lot of people are scared about going in front of a judge. They’re worried that their meeting is going to be like a high-stakes scene out of Law and Order. It’s not. The bankruptcy judge isn’t even allowed to be at your meeting. The 341 Meeting is just a formal meeting. It is not a courtroom, and you are not being interrogated or challenged. So you just need to go to your 341 Meeting, answer the questions asked, and get on with your bankruptcy. 6. You Must Tell the Truth. During your 341 Meeting, you will be asked to answer questions under oath. You are swearing that you are going to answer all of the questions truthfully. The only wrong answers to the questions asked is a dishonest answer. The point of the Trustee’s questions (and any posed by any creditors who appear) is to verify that you are aware of the content of your bankruptcy filing, and swear that it is true and correct. Some questions are meant to determine if you have any unexempt assets or if you have made any recent payments that might be reversible by the Trustee. The Trustee will also look to see if you tried to abuse the bankruptcy laws.  An example is where you go on a spending spree just prior to filing for bankruptcy.  There are different rules regarding if you take out a loan or purchase what is considered a luxury item within a certain number of days prior to filing for bankruptcy protection.  If you make these purchases or take out these loans, it may appear that you planned to file for bankruptcy. An example of an improper payment that the Trustee would attempt to uncover is where you have just paid your close friend the full $15,000 that you borrowed from him four years ago and now you have no money left to pay to any other creditors. Be careful and thoughtful with your answers, and don’t guess as to facts you don’t know. Just answer the questions honestly.  If something was left out of your bankruptcy you should immediately bring it to the attention of your bankruptcy attorney.  Most of the questions that you are asked are just to confirm the information in the Bankruptcy Petition that you already provided to your attorney. 7. Your Trustee Runs the Meeting. Before the 341 Meeting, the bankruptcy Trustee who was appointed to your case by the Bankruptcy Court will review your documents and prepare any secondary questions. At the meeting, he or she will run the meeting. The Trustee will record the meeting, introduce you and verify your identity, and ask questions. The Trustee will also determine what questions you may be asked by any creditors who appear for the meeting of creditors. 8. Trustees Are Required to Ask Standard Questions at the 341 Meeting. Everyone who files for Chapter 7 Bankruptcy will face similar questions from their Trustee no matter what the facts of their case are. These include things like: Did you review your bankruptcy schedules prior to signing? Are your bankruptcy schedules true and accurate? Did you supply this information to your lawyer? Do you have to make any changes to your schedules? Did you list all of your assets on the Schedules? Did you list all of your creditors on the Schedules? Did you list all of your income? Do you have any other sources of income? How did you get the figures for the value of your house or your auto? Have you taken the Financial Management class? Do you have any Life Insurance Policies that you can borrow against? 9. A Trustee Might Ask Other Questions. After working through the required questions, the Trustee may have additional questions that are intended to determine if you have any nonexempt assets that could also be claimed by the Trustee.  He or she may also be trying to find out if there were payments made to creditors or property transfers that happened before filing for bankruptcy. These questions could include: How did you value your home? How did you value your car? Do you have any claims against anyone?  Are you suing anyone? Are you expecting an inheritance? Did you recently sell any property Have you transferred any of your assets? Is the Tax Return that you have supplied a correct copy of your tax return? What is the reason for your filing for Bankruptcy protection? 10. You’re On Your Way To Zero Debt. It should take only a few minutes to ask and answer all the questions during the 341 Meeting of Creditors,  at which point you may finally feel the relief from debt. Typically, a person that files for bankruptcy will not have to face a court or judge. The only face-to-face interaction will be with the Trustee during this Meeting. Most of these 341 Meetings go smoothly if you have given your lawyer all of the information he or she has asked you for. 11. You Will Need to Supply Documents to Your Attorney for Supplying to the Trustee. The Trustee will want to see proof of the value of your assets.  You will need to supply this to your lawyer. Examples of these include bank account statements, real estate values, mortgage balances, auto loan balances, life insurance cash value, stock brokerage statements and other documents which let the Trustee know the value of your assets and the balances owed on any debts. 12. The Trustee Issues a Report of Your Assets. After the Trustee has concluded the 341 Meeting of Creditors, he or she will typically file a report that you have no non-exempt assets and then recommends that the Bankruptcy Court enters an Order which will discharge your debt automatically. Now is the time for a fresh start, a chance to move forward. 13. How to Dress for the Meeting of Creditors. When attending the 341 Meeting of Creditors, you should dress neatly, with the clothing that you have available to wear.  That means you should wear clothing that you own. It does not need to be a suit as many individuals don’t have the money for the same.  Your attorney however, is expected to wear a suit or slacks with a jacket, such as he or she would typically wear in a courtroom even though this is not a courtroom setting.  You should not fret or worry about what to wear. You certainly don’t want to borrow a friend or relative’s expensive clothing and expensive jewelry, when you just listed in your Bankruptcy filing that you do not own any expensive jewelry 14. Can You Ever Be Excused from Attending the Meeting of Creditors if You Are Ill or in the Hospital? If you are very ill, or you cannot get to Court due to a medical issue, there are several options. One is to file a Motion with the Bankruptcy Court asking the Court to permit a next friend – often a spouse or child – to appear on your behalf.  The person you are asking to appear on your behalf will need to appear before the Bankruptcy Court. If the Judge is satisfied that the interests of justice are best served if a next friend such as a spouse or a child appear for you then the Court can enter an Order permitting the same. In some cases, the Court may permit the meeting to be conducted via answering questions known as Interrogatories, however this method is generally not favored by the courts. 15. What to Avoid to Ensure that Your 341 Meeting of Creditors is a Positive Experience. What absolutely not to do at a 341 Meeting of Creditors: Lying to the Trustee.  That is a federal criminal offense. Hiding assets – i.e., thinking that you are the only one who knows the assets, and there is no way for the Trustee to find out about your vacation home or your secret bank account. Withholding information. If it comes out that you intentionally withheld information from the Trustee, or willfully gave false answers then what was a Bankruptcy proceeding to make your financial life better can then turn into a criminal proceeding. Always tell the truth to your lawyer when filing the Bankruptcy Petition and at the Meeting of Creditors and when answering the Trustee’s questions. Intentionally not listing that you have a stock brokerage account with stocks in it and then lying to the Trustee when he or she asks you if you own any stocks or bonds other than retirement accounts is a crime – something you certainly would wish to avoid. What to do if you inherit property, or you think you will inherit property soon. If you inherit property within six months of the date that you filed a Chapter 7 Bankruptcy Petition you need to let your lawyer and the Trustee know what type of property you have inherited, because any property that you inherit within six months of the date of filing the Bankruptcy becomes property of the Bankruptcy estate.  If you know that someone is leaving you property in their will, and it appears that they will die with in the six months of the filing, you need to let your attorney know this as bankruptcy may not be your optimal solution in that situation. Our experienced Philadelphia bankruptcy attorneys can help you. If you are struggling with debt and curious about your options, call The Law Offices of David M. Offen at 215-625-9600 for a free consultation. Located in Center City, Philadelphia David M. Offen has been helping people get the fresh start they deserve and move forward into a better financial future for more than 20 years, helping over 10,000 individuals and families navigate the path to a better financial life through filing Bankruptcy. The post 341 Meetings of Creditors: 15 Things You Should Know appeared first on Bankruptcy Lawyer in Philadelphia PA | David M. Offen Attorney at Law.

The possibility of losing your home in foreclosure is enough to make any person extremely upset and stressed. However, if you believe that you cannot cure the default of your mortgage, you may have the ability to file for bankruptcy to save your home. While filing for bankruptcy may seem undesirable, it may be your […] The post Does Bankruptcy Stop Foreclosure in New Jersey? appeared first on .

A dismissal is the termination of a court action or case verdict, or the act of voluntarily ending a lawsuit by either party. There can be some confusion surrounding whether or not dismissals appear on background checks. Here, criminal defense attorney Jeffrey Scholnick explains what a dismissal is and whether or not they show up on background checks. What are Grounds for Dismissal? A criminal procedure, or one of its causes of action, can be dismissed if a judge rules that the lawsuit or charge can be legally ended; a dismissal can also occur if a plaintiff settles the case. A dismissal with prejudice can be described as a dismissal in which a conclusion has been reached and cannot be refiled, while a dismissal without prejudice has the possibility of being reopened. In addition, a dismissal with leave means that there is the opportunity to refile, while a dismissal without leave means that there is not an opportunity for a party to refile. Do Dismissals Show Up on Background Checks? Even though your charges may have been dismissed in court, they are not automatically removed from the Maryland Judiciary Case Search. Unless criminal charges have been expunged or sealed, you should be prepared for the possibility that a dismissed case will show up on a background check. Dismissals and not guilty verdicts typically appear on background checks; however, dismissed charged often indicate innocence, as you were not charged guilty under the guidelines of the law, so a dismissed case on your record may not necessarily impede you from employment, housing or other life opportunities. Are There Any Ways Dismissals Can be Cleared From Background Checks? There are a few ways to prevent a dismissal from appearing on your record. Your criminal defense attorney may be able to work out a deal with the prosecutor to prevent you from being charged and developing a criminal record. If you already have a dismissal on your record, there are methods you can follow for potentially sealing or expunging your record so that your dismissal is permanently removed or not visible. Speak to a criminal defense attorney, such as Jeffrey Scholnick, to learn more about this process. Discuss Your Rights with Criminal Defense Attorney Jeffrey Scholnick If you are facing criminal charges, it is essential to have an experienced criminal defense attorney on your side to make certain that your rights are protected and the best outcome is ensured. If you have further questions about the intricacies of dismissals, or if you have been charged with a crime and require a dedicated criminal defense attorney by your side, contact The Law Offices Of Jeffrey Scholnick today.The post What is a Dismissal and Do They Show Up on Background Checks? first appeared on Scholnick Law.