This continues a series on the bankruptcy opinions of Neil Gorsuch, President Trump's nominee for the Supreme Court seat vacated by the death of Antonin Scalia.   One point which is clear is that Judge Gorsuch strongly believes that rules should be followed and is not sympathetic to arguments that procedural failures may be excused.No case illustrates Judge Gorsuch's tendency to strictly enforce the rules better than Blausey v. United States Trustee, 552 F.3d 1124 (10th Cir. 2009).    In that case, he dissented from a majority opinion where he stated "I admire and agree with the court's thoughtful treatment of the merits of the case."  He dissented because he would have dismissed the appeal rather than affirming the rulings of the lower courts.   While the result would be the same, he felt that the procedural deadlines needed to be respected.What was the heinous failure that doomed the court's jurisdiction?   In taking a direct appeal from the bankruptcy court, the debtors obtained a certification from the bankruptcy court but forgot to file a petition requesting permission to appeal with the court of appeals.    The majority ignored this failure and moved to the merits, but not Judge Gorsuch,  Finding that the debtors had conceded that they failed to file the petition, he stated "That concession should end this appeal."   The case involved whether private disability payments should be included in the means test.   The lower courts ruled that they did count and that the debtors' case should be dismissed as an abuse.  Rather than accepting a result he admired and agreed with, he dissented.  It takes a true believer to dissent from a result he agrees with.In five out of ten majority opinions that I read, Judge Gorsuch relied at least in part on failure to properly raise an issue in the appellate process.    This sometimes led to unusual result.   In Loveridge v. Hall (In re Renewable Energy Dev. Corp.), 792 F.3d 1274 (10th Cir. 2015), Judge Gorsuch found that the District Court could refer a case that was filed based on diversity jurisdiction to the bankruptcy court for a report and recommendation.   While this seems contrary to the referral power of 28 U.S.C. Sec. 157, Judge Gorsuch found that the appellant had waived the argument by failing to raise it below.    In LTF Real Estate Co. v. Expert S. Tulsa, LLC (In re Expert S. Tulsa, LLC), 619 Fed.Appx. 779 (10th Cir. 2015)(unreported), he was asked to rule on whether funds in an escrow account were property of the estate. The debtor argued that the funds were fully property of the estate on the petition date.   Judge Gorsuch ruled that the funds were subject to conditions so that they were not fully property of the estate on the petition date.   He reached this result by rejecting "the one argument Expert South has fairly presented in this case."    Having made this ruling, he then went on to explain all the things that the court had not decided, including whether the estate had a contingent interest in escrow funds that could "mature into a current right to possession if the escrow agreement's contingencies are satisfied after the bankruptcy begins."    It is not entirely clear to me why he couldn't have ruled that the estate had some interest in the funds but that it was governed by the terms of the escrow agreement.   Going against this trend, Judge Gorsuch had two opinions in which he showed creativity in ruling upon a dispute.   In a case which presaged Bullard v. Blue Hills Bank, 135 S.Ct. 1686 (2015), Judge Gorsuch considered whether the court had jurisdiction to entertain an appeal from an order denying confirmation of a plan. Woolsey v. Citibank, N.A. (In re Woolsey), 696 F.3d 1266 (10th Cir. 2012).   Judge Gorsuch found, as the Supreme Court would later conclude, that an order denying confirmation of a plan was not a final, appealable order.  However, in this case, Judge Gorsuch found that an order confirming an amended plan had been approved while the appeal was pending.   Thus, there was a final order that could be appealed and the earlier appeal that had been filed prior to the confirmation order was merely premature.   This was a creative way to avoid dismissing the appeal for lack of jurisdiction.   In TW Telecom Holdings, Inc. v. Carolina Internet, Ltd., 661 F.3d 495 (10th Cir. 2011), Judge Gorsuch used a panel opinion to reverse a long-standing Tenth Circuit precedent.   The Tenth Circuit had ruled that the automatic stay did not appeal to an appeal by a debtor of a judgment against it.   Its original ruling was based on Collier on Bankruptcy.   Meanwhile, nine circuits reached the contrary result, finding that an appeal of a judgment against the debtor was a continuation of a proceeding against the debtor and subject to the stay.   Additionally, Collier on Bankruptcy changed its position on the appeal.   In the face of overwhelming opposition to the Tenth Circuit's position, Judge Gorsuch wrote, "Accordingly we overrule this circuit's prior interpretation of Sec. 362(a)(1) . . . ."   Just how did Judge Gorsuch get the authority to overrule his circuit's precedent?   He included a footnote stating that he had circulated the opinion to the en banc court which had unanimously agreed to overrule the precedent.    Thus, rather than mechanically following the prior wrong precedent and waiting for the en banc court to act, he took the initiative to get the whole court on board and fix the erroneous ruling.What do these cases show us?   On the one hand, he has a Scalia-like tendency to accept a bad result when Congress or the litigants messed up.   On the other hand, he can be creative and avoid a bad result when he wants to.    Based on this limited sample of cases, I would recommend that litigants be ultra-careful about preserving error and making the right arguments below.   While Judge Gorsuch may do something surprising, you can't count on it.

Newly minted Supreme Court nominee Neil Gorsuch sat on the Tenth Circuit for ten years.  During that time, he signed on to eleven opinions regarding bankruptcy, which means that he wrote about bankruptcy around once a year.    None of his opinions are particularly well-known.  (In contrast, fellow finalist Thomas Hardiman authored the opinion in Official Committee of Unsecured Creditors vs. CIT Group/Business Credit, Inc. (In re Jevic Holding Corp.), 787 F.3d 173 (3rd Cir. 2015) which is currently before the Supreme Court).    However, these opinions demonstrate his crisp writing style and offer some insights into his judicial thinking.   I am going to look at one of his opinions in depth and follow up with a separate post on his remaining decisions.A Deep Dive Into Renewable Energy DevelopmentIn Loveridge v. Hall (In re Renewable Energy Development Corp.), 792 F.3d 1274 (10th Cir. 2015), Judge Gorsuch lectured a District Judge on the meaning of Stern v. Marshall and its progeny. He wrote:This case has but little to do with bankruptcy. Neither the debtor nor the creditors, not even the bankruptcy trustee, are parties to it. True, the plaintiffs once enjoyed an attorney-client relationship with a former bankruptcy trustee. True, they now allege the former trustee breached professional duties due them because of conflicting obligations he owed the bankruptcy estate. But the plaintiffs seek recovery only under state law and none of their claims will be necessarily resolved in the bankruptcy claims allowance process. And to know that much is to know this case cannot be resolved in bankruptcy court. The bankruptcy court may offer a report and recommendation. It may even decide the dispute if the parties consent. But the parties are entitled by the Constitution to have an Article III judge make the final call. So the district court's ruling otherwise — its decision to send the dispute to an Article I bankruptcy court for final resolution without their consent — violates the Constitution's commands and must be corrected.792 F.3d at 1276-77.    In one paragraph, the judge succeeded in summarizing the facts of the case and the legal reasoning supporting the court's decision.    The case involved a bankruptcy trustee (Mr. Hoffman) who consulted one of his clients (Summit Wind Power, LLC) about leases held by the bankruptcy estate.   He initially concluded that the leases were of no value to the estate and encouraged his client to negotiate its own leases with the non-bankrupt counterparties.  The trustee then realized that he had made a mistake.  As Judge Gorsuch explained:Things got so testy that Mr. Hofmann, yes, brought an adversarial proceeding in bankruptcy court against one client (Summit) on behalf of another (the REDCO estate). Unsurprisingly, Summit responded with state law claims against Mr. Hofmann and his law firm, alleging legal malpractice, breaches of fiduciary duties, and a good many other things besides. Mr. Hofmann, by now irredeemably conflicted, was removed from his post as trustee.How do these unfortunate but hardly uncommon facts yield a dispute of constitutional magnitude? Summit filed suit in federal court against Mr. Hofmann alleging diversity jurisdiction and the right to have the case resolved in an Article III court. Mr. Hofmann replied that the case belonged in and should be resolved by an Article I bankruptcy court. Ultimately, the district court sided with Mr. Hofmann even as it acknowledged some uncertainty about this much and certified its decision for an immediate appeal.792 F.3d at 1277-78.    Judge Gorsuch followed with a very conventional (and correct) reading of Stern v. Marshall and demolished the ex-Trustee's argument that proceedings which are "factually intertwined" with a bankruptcy case could be finally resolved by an Article I judge.In this way, the Court did suggest the source of law generating a claim may inform its categorization as involving a public or private right. But the Court nowhere suggested that any claim "factually intertwined" with bankruptcy may be sent to bankruptcy court for final resolution without consent.We confess we're glad of this. Asking what source of law generated the claim at issue may well raise some questions around the edges — like what about claims pursuing fraudulent conveyances, which find a home in a federal statute but surely implicate longstanding common law rights? ... Still, questions like these aren't a patch on what would be involved if in each case we had to ask whether the plaintiff's claims are "factually intertwined" with a bankruptcy proceeding. If, as Mr. Hofmann submits, our case is "factually intertwined" enough with bankruptcy to warrant its resolution in bankruptcy court — just because a trustee in the bankruptcy happened to generate a conflict of interest with a client outside the bankruptcy — what wouldn't be? What if a trustee and creditor came to blows in the courthouse parking lot over the terms of a proposed reorganization plan? What if a trustee stole from a third person and gave the money to the bankruptcy estate? Couldn't someone plausibly describe disputes like these as at least as "factually intertwined" with bankruptcy as our own?792 F.3d at 1280.    However, just as he has ruled against the ex-Trustee, the judge slapped down the appellant as well.Still, that's not the end of our encounter with this appeal. It isn't because saying (as we do) that a bankruptcy court may not decide this case without the parties' consent under Stern doesn't necessarily mean it cannot hear the case and offer a report and recommendation about its disposition to a district court. Indeed, as the Supreme Court has recently explained, where (as here) we are faced with a "Stern claim"— a claim the bankruptcy court is statutorily but not constitutionally authorized to decide and for which it has not received the parties' consent to proceed — it's still possible under 28 U.S.C. § 157(c)(1) and consistent with Article III for a bankruptcy court to "hear the proceeding and submit proposed findings of fact and conclusions of law to the district court for de novo review and entry of judgment." Arkison, 134 S. Ct. at 2173. In cases like this, the bankruptcy court may act as a sort of magistrate or special master, an adjunct to the decisionmaker, not the decisionmaker itself — and in this way honor both statutory and constitutional commands. Id. So while Summit is right and the district court erred in sending Mr. Hofmann's case to bankruptcy court for final decision, the district court remains free on remand to refer the case to a bankruptcy court for a report and recommendation.Summit resists this result, fighting even a temporary trip to bankruptcy court for a report and recommendation. For a bankruptcy court to hear a claim as a matter of statutory law, Summit notes, 28 U.S.C. § 157(a) instructs that the claim must "aris[e] under title 11 or aris[e] in or relate[] to a case under title 11," the federal bankruptcy code. And Summit says this requirement isn't met in this case because the parties' fight is so far removed from bankruptcy that it can't be said to "aris[e] under title 11 or aris[e] in or relate[] to a case under title 11." But whatever other problems might attend this line of argument one is by now familiar: it wasn't made before the district court and is therefore another one we may and do decline to resolve in this appeal. See Waldman, 698 F.3d at 917.Not ready to give up quite so easily on its effort to avoid even a short detour from district court, Summit suggests we cannot ignore and must resolve its argument because it implicates the subject matter jurisdiction of the federal courts. But that much it does not — quite — do. The statute Summit invokes, 28 U.S.C. § 157, involves only the allocation of responsibility between the bankruptcy and district court; it does not "implicate questions of subject matter jurisdiction." Stern, 131 S. Ct. at 2607. We acknowledge that § 157(a) shares similar language with 28 U.S.C. § 1334(b) — and we readily accept that statute is jurisdictional: quite expressly it provides district courts with "jurisdiction" over "all civil proceedings arising under title 11, or arising in or related to cases under title 11." So maybe Summit's § 157(a) argument could be transferred to § 1334(b), and maybe the argument could present a successful jurisdictional challenge there. But if it did, it wouldn't be just the bankruptcy court that would lack jurisdiction to hear and report on this case. The district court itself would have no authority to hear the case either for § 1334(b) expressly governs its jurisdiction too.Anxious to remain in federal court — just not ever visit bankruptcy court — Summit shirks from acknowledging this, the full consequences of its argument, and nowhere mentions § 1334(b) in its opening brief or how its argument might apply to that statute. And, happily for everyone, we don't have to address the question on our own motion either, even though it does implicate subject matter jurisdiction. We don't because, whether or not the district court has jurisdiction to decide this case under § 1334(b), everyone acknowledges it clearly has jurisdiction to do just that under § 1332(a) given that the complaint alleges complete diversity of citizenship and a sufficient amount in controversy. See, e.g., Penteco Corp. Ltd. P'ship—1985A v. Union Gas Sys., Inc., 929 F.2d 1519, 1521 (10th Cir. 1991).At the end of the day, then, we are confident that the district court possesses subject matter jurisdiction to hear this case at least under the diversity statute, that Summit is entitled under Stern to have an Article III district court resolve its claims, and that the district court may refer the case to an Article I bankruptcy court for a report and recommendation. Many other questions remain for tomorrow. But resolving this much is enough work for today. The case is remanded to the district court for further proceedings consistent with this opinion. 792 F.3d at 1282-84.  What just happened here?    Judge Gorsuch found that the District Court may refer a Stern claim to the bankruptcy court for a report and recommendation.   That is pretty clear.   However, the Court ducked the question of whether this actually is a Stern claim because the appellant didn't raise that issue before the District Court.   In response to the appellant's claim that subject matter jurisdiction cannot be waived, the Court found that (1) 28 U.S.C. Sec. 157 involves the allocation of authority rather than a grant of jurisdiction and (2) the District Court had diversity jurisdiction.    What Does the Opinion Mean?  If I am reading this opinion correctly, the judge undermined his own ruling.   On the one hand, he properly ruled that Stern v. Marshall  does not allow the Bankruptcy Court to enter a final judgment on a claim that is merely "factually intertwined" with the bankruptcy case absent consent.   However, he then found that a "factually intertwined" case could be referred to the Bankruptcy Court for a report and recommendation because the appellant failed to raise the Sec. 157 issue in the District Court.   He very coyly points out that 28 U.S.C. Sec. 157 and 1334 (b) contain similar language but serve different purposes.   However, the very nature of a Stern claim is that Congress has statutorily authorized the Bankruptcy Court to hear the case but the Bankruptcy Court lacks constitutional authority to enter a final judgment absent consent.   28 U.S.C. Sec. 157 is the statutory authority.  In my opinion, it is extremely disingenuous to say that a claim is a Stern claim which may be referred to the Bankruptcy Court under Sec. 157 solely because the other party failed to argue the scope of Sec. 157 in the Court below.   What the Court should have done is to remand the case to the District Court and left open the question of whether the case could be referred to the Bankruptcy Court.   However, by stating that the District Court may refer the case to the Bankruptcy Court, the Court of Appeals has effectively found that the District Court has the authority to refer cases arising under diversity jurisdiction to the Bankruptcy Court regardless of whether Sec. 157 allows that referral. What Does the Opinion Say About Judge Gorsuch? What can we learn from this opinion?   Judge Gorsuch is a lively writer.  He authored a 22-page opinion without any headings or subheadings which flowed naturally without these guideposts.  I included long segments from the opinion when I could have summarized them simply because I enjoyed reading his prose.   He has the ability to distill the essence of a case very quickly.   His writing is entertaining to read because he can turn a phrase as well as any jurist.   He takes delight in skewering litigants who take indefensible positions.   In fact, he lectured both parties on their arguments. However, I am troubled by the fact that when he got to the bottom line, he skipped over an important issue and gave the District Court more authority to refer than was conferred by Congress.   Granted, he did say that the District Court "may" refer the case which implies that the District Court might say no.   However, to say that the Court "may" do something, you must say that it is permissible.   What was he thinking?   Did he get to the end of an opinion and lose focus?   Was he trying to expand the authority of the District Court to unload matters onto the Bankruptcy Court?  Or was he just being too clever?   Given my brief review, I won't try to answer those questions.   However, I wanted to throw them out there for discussion.This is just one opinion.   I will be back with more later.

Holly Gets Hired After Bankruptcy and Gets a New Company Credit Card Holly was at the end of her rope. She’d been out of work for two years; she kept getting interviews but no offers; and she was feeding partial payments to her creditors, to try to keep them off her back. She believed she was […]The post Holly Gets Hired after Bankruptcy and Gets a New Credit Card by Robert Weed appeared first on Robert Weed.

Holly Gets Hired After Bankruptcy and Gets a New Company Credit Card Holly was at the end of her rope. She’d been out of work for two years; she kept getting interviews but no offers; and she was feeding partial payments to her creditors, to try to keep them off her back. She believed she was […] The post Holly Gets Hired after Bankruptcy and Gets a New Credit Card by Robert Weed appeared first on Robert Weed.

Here at Shenwick & Associates, it is our experience that student loan debt is the fastest growing debt many people are burdened with. As of September 2016, outstanding student loan balances were $1.279 trillion and counting. This month, we're going to take another look at student loan debt, its dischargeability in bankruptcy and other potential tactics debtors can use to cope with it. Earlier this month, the New York Times reportedon an effort by former students of ITT Tech to intervene in its bankruptcy to be recognized as creditors and to resolve their claims against ITT Tech for loan cancellation. As many of our readers are aware, defaulted student loans are generally not dischargeable in bankruptcy except in special circumstances. The debtor must show that: (1) he or she cannot maintain, based on current income and expenses, a minimal standard of living for the debtor and dependents if forced to pay off the student loan; (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 loan; and (3) that the he or she has made good faith efforts to repay the loans. That was the holding in Brunner v. New York State Higher Education Services Corp., 831 F.2d. 395 (2nd Cir. 1987), the leading case on student loans and bankruptcy, and its reasoning has been adopted by most federal appellate courts.However, non-bankruptcy remedies are available under federal and state law for student loan debtors, including loan consolidation, deferment, forbearance or a workout. These solutions may be better for many student loan debtors than bankruptcy. Loan consolidation. Most federal student loans (except private loans) are eligible to be consolidated. However, if your loans are in default, you must meet certain requirements before you can consolidate your loans. Loan consolidation greatly simplify loan repayment by centralizing your loans to one bill and can lower monthly payments by giving you up to 30 years to repay your loans. You might also have access to alternative repayment plans you would not have had before, and you'll be able to switch your variable interest rate loans to a fixed interest rate.Deferment. Deferment is a period during which repayment of the principal balance of your loan is temporarily delayed. Also, depending on the type of loan you have, the federal government may pay the interest on your loan during a period of deferment. The government does not pay the interest on your unsubsidized loans (or on any PLUS loans).Forbearance. If you can't make your scheduled loan payments, but don't qualify for a deferment, your loan servicer may be able to grant you a forbearance. With forbearance, you may be able to stop making payments or reduce your monthly payment for up to 12 months. Interest will continue to accrue on your subsidized and unsubsidized loans (including all PLUS loans).Workout. With the encouragement of federal banking regulatory agencies, some financial institutions that make private student loans offer workouts and loan modification programs. Your lender or servicer should be able to tell you the options available, general eligibility criteria and the process for requesting a workout or modification.For more information about possible solutions to coping with your student loan debts, please contact Jim Shenwick

Nobody sets out with the goal of wanting to file for bankruptcy relief. However, things happen in one’s financial life which can lead to that eventuality. For many, there is an unwillingness to jump in and do what makes financial sense. Many people put off filing with the hope that somehow, someway, either their ship+ Read More The post Hesitating To File Bankruptcy Can Cost You Thousands Of Dollars appeared first on David M. Siegel.

Short sale tax forgiveness has expired. If your house is “under water” you need to read this. The general rule of tax law is that debt forgiveness is income—if I lend you $1,000 and then say you don’t have to pay me back, you’ve made $1,000. And you’re subject to tax on that. That matters […]The post Short sale tax forgiveness has expired by Robert Weed appeared first on Robert Weed.

The case for The Archdiocese of St. Paul and Minneapolis, No. 15-30125 (Bankr. D. Minn.) has been an extremely contentious one.   The Debtor and the Official Committee of Unsecured Creditors have different ideas on how to compensate sexual abuse claims and have submitted competing plans.    Not surprisingly, both parties objected to the other's disclosure statement.    The orders entered by Judge Robert Kressel show remarkable wisdom about how the disclosure statement process works in the real world.    In ruling upon the Debtor's Disclosure Statement, Judge Kressel wrote:I find that the debtor’s disclosure statement does contain adequate information and there would be virtually no benefit to providing additional information to creditors. Based on my observation of the dynamics in this case, it is extremely unlikely that the unsecured creditors, especially those that have claims for being sexually victimized by employees or associates of the debtor, will base their vote in any way on the information contained in the disclosure statement. Therefore, requiring additional information makes no sense. Order Approving Debtor's Disclosure Statement Dated and Filed December 19, 2016, Dkt. #902 (emphasis added).In ruling upon the Committee's Disclosure Statement, the Court said:I find that the creditors committee’s proposed disclosure statement does contain adequate information and there would be virtually no benefit to providing additional information to creditors. The  objections focus primarily on the confirmability of the creditors committee’s plan–objections which I prefer to address as part of the plan confirmation process. There are objections to various factual statements made in the disclosure statement for which little factual basis is provided. However, because voting for or against the committee’s plan will not be based in any meaningful way on the contents of the disclosure statement, I am inclined to allow the disclosure statement to go ahead as filed.Order Approving Creditors' Committee's disclosure Statement Dated and Filed December 19, 2016, Dkt. #903 (emphasis added)..   When I first started practicing, I would often receive voluminous objections to disclosure statements which would begin "This disclosure statement fails to meet even the minimum standard for adequate information under 11 U.S.C. Sec. 1125" followed by a long list of items claimed to be lacking.   These objections were usually filed by a secured creditor who had already decided to vote against the plan and was simply trying to delay the debtor from proceeding to confirmation.What I find refreshing in Judge Kressel's orders is the recognition that in a highly litigated case, the dueling parties are not going to cast their ballots based on the information in the other side's disclosure statement.   While disclosure statements ensure that all creditors receive a minimum amount of information about a plan, there will be many cases were "requiring additional information makes no sense" and the parties just need to get to confirmation.   This pair of orders shows remarkable common sense.      

   A debtor attorney and debtor were jointly sanctions $5,793.75 in creditor's fees for a bad faith chapter 13 filing in In re: Phillip Wayne Lockhart, Jr., No. 16-32803(1)(13), 2017 WL 187560 (Bankr. W.D. Ky. Jan. 17, 2017).  The debtor has filed chapter 13 after a a state court order holding him in contempt for not paying child support, after the debtor had unsuccessfully petitioned for a modification of the award.  An initial contempt order had required the debtor to pay $500/month in maintenance on the child support arrearage, as well as continued monthly $3,000/month on-going child support.  When the debtor failed to keep the on-going payments current, a second contempt order was entered determining the arrearage to be $225,675 at 12% interest, and requiring a lump sum payment of $25,000, plus $2,000 toward the arrearage, and to resume the $3,000/month on-going support payments, or face 180 days in jail.  Debtor failed to comply with this order, instead filing for chapter 13 relief.  Debtor scheduled priority debts as none.  Debtor's plan provided no distribution to unsecured creditors, and provided a special provision as to child support that Debtor would attempt to negotiate or get the child support decreased in the state court.  At the confirmation hearing the counsel for debtor asserted that the debtor was unable to afford the payments required by the state court, and admitted that the case was filed to allow more time to seek relief from the state court.  Debtor noted meeting with an attorney following a seminar who had no ideas to help him.  The debtor also noted that the state court judge was an 'interim' judge who he believed would be replaced after the next election, and that he hoped the new judge would look on his case more favorably. Rule 9011, is most pertinent to the matter at bar. It reads: (b) Representations to the Court. By presenting to the court (whether by signature, filing, submitting or later advocating) a petition, pleading, written motion or other paper, an attorney or unrepresented party is certifying to the best of the persons'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;In general, courts employ an objective standard in determining whether a filing has been made for an “improper purpose.” The test has been stated as follows:Alan N. Resnick & Henry J. Sommers, COLLIER ON BANKRUPTCY ¶ 9011.04[7][c].In applying the objective test, courts may infer the purpose of a filing from the consequences of the pleading or motion. For example, an improper purpose may be inferred when the effect of a pleading or the motion is to delay the proceedings.Lockhart , 2017 WL 187560, at *2–3.   The court noted that the debtor had not appealed the state court order finding him in contempt.  In order to cure the arrearage and maintain payments the plan payment would need to be about $8,000/month, rather than the $975 proposed.   The bankruptcy court does not have jurisdiction to modify the state court order determining the amount of child support arrearage.   The pleadings and statements in court establish that the filing was a delaying tactic to avoid serving jail time and force additional litigation. Courts considering a request for sanctions under Rule 9011(b), “must consider both frivolousness and improper purpose on a sliding scale, where the more compelling the showing as to one element, the less decisive need be the showing as to the other.”  In re Silberkraus, 336 F.3d 864, 870 (9th Cir. 2003), quoting In re Marsch, 36 F.3d 825, 830 (9th Cir. 1994).  Lockhart 2017 WL 187560, at *4,   2017).  The court found that debtor and counsel violated Rule 9011(b) and found an appropriate sanction for violations in cases filed for improper delay is restitution of the unnecessary litigation expense incurred by the opposing party.    Thus the joint award against debtor and counsel for the fees of $5,793.75.Michael Barnett.  www.tampabankruptcy.com

Annuity Contracts VS. Bankruptcy Law in Arizona Financial planning is difficult, but important. Many people of Arizona don’t understand the importance of saving money for the future, or the concept of financial planning. As lawyers, when we are saying “financial planning,” we are talking about long-term, the future. What are you going to do when retire? You can not just depend on social security. How about the college education of your kids? What if you want to travel the world? How long will your life savings maintain you while you are retire? There are is a lot of unforeseen situations in the future, and a variety of “what if’s.” For those who are prepare financially for the future, who have a financial plan for retirement mostly like obtain an annuity. Here is a what if situation, “What if you need to file bankruptcy, will that include losing your annuity?” My AZ Lawyers has a clarification on that “what if.” What is an Annuity? For those you don’t understand what an annutiy is, here is definiation from investopedia.com: “An annuity is a contractual financial product sold by financial institutions that is designed to accept and grow funds from an individual and then, upon annuitization, pay out a stream of payments to the individual at a later point in time. The period of time when an annuity is being funded and before payouts begin is referred to as the accumulation phase. Once payments commence, the contract is in the annuitization phase.” You open an annuity account with a financial institution. Open the account with x amount of money, maybe with a few payments, and them leave the account alone. You’ll have to let the funds grow, accumulate. After x amount of years, depending on the contract, you’ll be receiving payouts from your annuity account. It’s like a forgotten saving account. Except this forgotten savings account is for the future, like college tuition money for your kids or to keep financially stable during retirement. Here is scenario that builds ups to the “what if” situation. You purchase an annuity 45 years ago, and today it’s worth $200,000. These annuity is your major assets, plus you have a lot of bills and a couple for assets here and there. Now, you barely afford to pay your bills, and so there is a chance that you’ll be filing bankruptcy. Enhance, will filing bankruptcy mean losing the annuity? Bankruptcy Law in Arizona Luckily for you, Arizona has an exemption statute that can save your annuity contract in specific situations, A.R.S. § 33-1126(a)(7). The statute reads as follows: “33-1126. Money benefits or proceeds; exception A. The following property of a debtor is exempt from execution, attachment or sale on any process issued from any court: …. 7. An annuity contract where for a continuous unexpired period of two years that contract has been owned by a debtor and has named as beneficiary the debtor, the debtor’s surviving spouse, child, parent, brother or sister, or any other dependent family member, except that, subject to the statute of limitations, the amount of any premium, payment or deposit with respect to that contract is recoverable or avoidable by a creditor pursuant to title 44, chapter 8, article 1 is not exempt. The exemption provided by this paragraph does not apply to a claim for a payment of a debt of the annuitant or beneficiary that is secured by a pledge or assignment of the contract or its proceeds. For the purposes of this paragraph, “dependent” means a family member who is dependent on the debtor for not less than half support.” Basically the specific situations are: You must the annuity contract for at least two years Must not have been broke when you bought the contract Have one of the specified person’s (surviving spouse, child, parent, brother or sister, or any other dependent family member) listed as the beneficiary **Arizona Title 44, chapter 8, article 1, relates to transfers made while broke or intentionally to defeat creditors. These requirements are not harsh, they are very reasonable. If points one to three are met, there there is chance you’ll keep the annuity. However, if your attentions were as stated in Arizona Title 44, chapter 8, article 1, then there will be complications. My AZ Lawyers recommended you to the properly plan your finances with the appropriate legal advice. The lawyers at My AZ Lawyers are here to help with the legal advice. We know that life is messy, and bankruptcy could be part of that mess. Understanding and being aware of the bankruptcy laws in Arizona is quite the challenge. Consult with a bankruptcy lawyer in Mesa at My AZ Lawyers to understand the regulations of bankruptcy laws. Published By: 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 85392 Office: (623) 499-4222 The post Annuity Contracts VS. Bankruptcy Law in Arizona appeared first on My AZ Lawyers.